IN THE DISTRICT COURT OF BECKHAM COUNTY STATE OF OKLAHOMA. CLIENT, ) Plaintiff, ) v. ) Case No. CJ ) DEFENDANT, ) Defendant.

Transcription

1 IN THE DISTRICT COURT OF BECKHAM COUNTY STATE OF OKLAHOMA CLIENT, ) Plaintiff, ) v. ) Case No. CJ ) DEFENDANT, ) Defendant. ) PLAINTIFF'S RESPONSE TO DEFENDANT'S SECOND MOTION IN LIMINE INTRODUCTION Plaintiff was hurt when Defendant pulled in front of a motorcycle on which she was a passenger. The current motion is Defendant s second attempt to limit Plaintiff s medical damages to the amounts paid by her coverage with Indian Health Services (IHS). In an almost identical second Motion in Limine, Defendant has again asked this Court to exclude evidence of amounts "written off" by Plaintiff's healthcare providers. Without citing any additional legal precedent, Defendant claims deposition testimony from Plaintiff and from her surgeon fulfill the second sentence of 12 O.S , which says a Defendant who wants to limit medical damages to amounts paid instead of amounts incurred has to get a signed statement... that the provider... will accept the amount paid as full payment of the obligations.... The depositions do not satisfy the statutory mandate and so nothing has changed and the Court s previous ruling remains correct. Since section does not apply, Oklahoma s collateral source rule prevents any discussion of Indian Health Services, including discussion of the contractual discounts it gets for guaranteed, prompt, volume, payment to its contracted providers. The Court should deny the Motion in Limine because: (1) the second sentence requirement of 12 O.S has not been satisfied; (2) the collateral source rule applies

2 to allow the incurred bills, and; (3) to grant the motion the Court would have to apply an unconstitutional interpretation of the statute. Plaintiff incorporates by reference her successful Response to Defendant s First Motion in Limine, and in this second response focuses on Defendant s new argument. RESPONSE TO DEFENDANT S ADDITIONAL FACTS CONCERNING TESTIMONY OF DR. WEST AND PLAINTIFF: 1. Southwest Orthopedic and Reconstructive Specialists has a contract to provide services with Indian Health Services. This is likely true, but is immaterial. 2. The contract with Indian Health Services is similar to the contract they would have to treat Medicare and Medicaid patients. The parties have never seen the contract and so none can say how similar it might be to Medicare or Medicaid, but we know providers commonly contract with health reimbursement systems including Indian Health Services with the goal of exchanging negotiated discounts for fast, efficient, guaranteed payment from a greater number of patients. 3. He accepts whatever is paid under the contract and they don t bill the patient for anything else. Perhaps, but again, immaterial. As stated above, providers commonly contract with health reimbursement systems including Indian Health Services with the goal of exchanging negotiated discounts for fast, efficient, guaranteed payment from a greater number of patients. 2

3 4. Southwest Orthopedic and Reconstructive Services has received payment from Indian Health Services under the contract and has written off any remaining balance. Dr. West cannot speak for the billing department because Dr. West treats patients. He does not perform OCOM s billing. (West Depo. 9:20-21; 12:15-16) (Exhibit A). Also, Defendant s Exhibits 2 and 3, the bills are not signed statement[s] showing that the medical provider will accept the amount paid as full payment of the obligations. The legislature requires more of a defendant trying to wire around the collateral source rule than simply putting the bills into evidence. Finally, there is no evidence the discounts are written off. Rather, the provider provides and bills for services. IHS then satisfies the full billed amount by payment of a lesser discounted amount. The discounts are not illusory write offs as Defendant would have the Court believe, but are instead the quid pro quo for both IHS referring a certain volume of patients as well as for IHS providing a source of guaranteed, prompt, payment. The discounts are thus a benefit or payment conferred on Plaintiff by virtue of her qualification for IHS services (more on the basis for that below). The discounts are thus compensation from a source other than Defendant, and, as such, subject to the collateral source rule. 5. OCOM has received payment from Indian Health Services under the contract and has written off any remaining balance. See above. 6. Based upon the bills provided by Southwest Orthopedic and Reconstructive Specialists and OCOM, Dr. West testified that it is his opinion that Plaintiff s 3

4 payment obligations to those facilities have been fully satisfied and that Southwest Orthopedic and Reconstructive Specialists and OCOM are not looking to Plaintiff to pay anything beyond the amounts paid by Indian Health Services. As set out above, Dr. West s deposition testimony does not satisfy 12 O.S (A) s requirement of the signed statement from the provider agreeing it will accept the amount paid. In fact, to the extent the deposition constitutes any statement with respect to , it is not a signed statement (Dr. West waived the right to read and sign. (West Depo. 67:6-11) (Exhibit A). 7. Plaintiff has testified that all of her medical bills have been paid by Indian Health Services and that there are no outstanding bills that she is personally obligated to pay. Plaintiff s belief about payment has no bearing on the requirements set out in 12 O.S Plaintiff does not pay anything for the benefits provided by Indian Health Services and the benefits are provided to her solely based upon her status as a Native American. Though Plaintiff does not pay a monthly premium for her health services, those services are not provided without consideration. Indian Health Services is a benefit born of treaties between the United States and various Indian Tribes, in which the United States agreed to provide such services in exchange for Native Americans giving up their land: The cessation of most of the lands in the United States by the Indians, codified in hundreds of treaties, forms the basis for the Government s provision of health care to Indians. Many treaties identified health services as part of the Government s payment for Indian land. Indian treaties were contracts between the Federal 4

5 and Tribal Governments. Indian Tribes gave up their land in return for payments and/or services from the U.S. Government. (IHS Gold Book (2005) 1-11)(Exhibit C). This makes Plaintiff s IHS benefits more like Medicare or private insurance (subject to the collateral source rule even under Defendant s cases) and less like charitable Medicare treatment. ARGUMENTS & AUTHORITIES PROPOSITION I: THE NEW EVIDENCE PRESENTED BY DEFENDANT DOES NOT SATISFY 12 O.S The Court should deny this Second Motion in Limine because Defendant has still not complied with the second sentence of As shown in the incorporated response, the circumstances here are distinguishable from the cases Defendant cites. 1 Defendant still demands the benefit of 12 O.S , but has yet to comply with the statutory mandate. The statute says Defendant only gets the benefit of the statute if it provides a signed statement from the medical provider accepting the "amount paid" as "full payment : A. Upon the trial of any civil case involving personal injury, the actual amounts paid for any doctor bills, hospital bills, ambulance service bills, drug bills and similar bills for expenses incurred in the treatment of the party shall be the amounts admissible at trial, not the amounts billed for expenses incurred in the treatment of the party. If, in addition to evidence of payment, a signed statement acknowledged by the medical provider or an authorized representative that the provider in consideration of the patient's efforts to collect the funds to pay the provider, will accept the amount paid as full payment of the obligations is also admitted. 2 Defendant purports to satisfy the requirements of the second sentence by presenting 1 Plaintiff s Response to Defendant s First Motion in Limine p O.S (A) (Emphasis added). 5

6 oral deposition testimony of a single doctor (and that of the Plaintiff). 3 That does not satisfy the statute. Neither deposition is a a signed statement acknowledged by the medical provider or an authorized representative that the provider in consideration of the patient's efforts to collect the funds to pay the provider, will accept the amount paid as full payment of the obligations is also admitted. Plaintiff s deposition is signed, but she is not a medical provider or an authorized representative. Dr. West works for a provider (though not the only provider), but he has no connection with OCOM s billing department. His statement, moreover, is not signed and so fails the statutory mandate. There are no Oklahoma State or Federal decisions which interpret the second sentence of 12 O.S , and certainly nothing suggests an oral statement in a deposition fulfills the requirement. However, Walsh v. United States, from the Northern District of Oklahoma, suggests that a plaintiff s deposition testimony is not reliable evidence regarding the source and state of payments to her medical providers. 4 Walsh involved a malpractice suit between a Native American who filed under the Federal Tort Claims Act against the United States. The U.S., as Defendant, argued that because the Plaintiff s medical bills were already paid from the general funds of the federal government, there were no collateral sources, and the collateral source rule should therefore not apply. The Defendant offered as evidence the deposition of the Plaintiff himself, who testified that he believed his bills would be tak[en] care of by the Cherokee Nation. 5 Walsh held that regardless of the collateral source rule, the evidence offered from Plaintiff s deposition, even combined with the government s proof 3 Defendant's Second Motion in Limine p Walsh v. United States, 2009 U.S. Dist. LEXIS 27238, 12 (N.D. Okla. Mar. 31, 2009). 5 Walsh v. United States, 2009 U.S. Dist. LEXIS 27238, 12 (N.D. Okla. Mar. 31, 2009). 6

7 of discounted medical bills, was insufficient evidence to grant the government s motion in limine. 6 The court reasoned that testimony of perceived medical billing practices was insufficient to delineate actual Indian Health Services (IHS) practices. 7 So it is here. Defendant s deposition testimony does not satisfy the mandate of 12 O.S PROPOSITION II: THE COLLATERAL SOURCE RULE MANDATES THAT PLAINTIFF RECOVERS HER FULL MEDICAL EXPENSE Defendant s second proposition is effectively identical to its First Motion. The court has already ruled in Plaintiff s favor. Plaintiff refers the Court to the incorporated response in that regard. Plaintiff offers the following by way of additional argument and authority: A. Plaintiff s Incurred Charges Are Not Illusory Defendant again portrays the health insurance discounts as "illusory" charges that no one ever owes or pays. Putting aside for the moment that the collateral source rule does not require payments, the discounts are not illusory. First, when Plaintiff accepted Dr. West s treatment, she guaranteed full payment to OCOM: I agree that in consideration for the medical care I receive from the Hospital, its employees, agents, designees, or independent contractors. [sic] I guarantee full payment for all charges by the Oklahoma Center for Orthopaedic Multi-Specialty Surgery Hospital or by other providers of medical care, for such are, subject only to restrictions imposed by the Medicare or State Medicaid Programs, or by any third party payor Thus it is incorrect to say Plaintiff was never legally obligated. She was. Regardless, the collateral source rule applies whether or not the Plaintiff is legally obligated. We know 6 Id. at 11-12, Id. 8 OCOM Admission Contract (Exhibit B). 7

8 that is so because the rule applies to benefits paid by a workers compensation carrier. 9 Yet a worker injured on the job cannot be liable for those medical expenses. The only source of recovery for the medical providers is the workers compensation carrier. 10 Second, OCOM had the option of filing a physician s lien in the full amount of the bill incurred by Plaintiff. 11 Had it done so, it would have been entitled to payment of the full billed amount that is the incurred medical expense (contrary to Defendant s claim, a medical expense is incurred when treatment is rendered, not when the bill is paid 12 ). So why does a provider such as OCOM opt for the lower payment from IHS? That is the quid pro quo. IHS gets medical services for its members at a reduced rate and OCOM gets guaranteed hassle-free prompt payment. OCOM also gets the benefit of volume. Rather than treat one patient at full price, it gets (ideally) more patients at a lower price. There is nothing illusory, thus, about the IHS discount. The discount is satisfied (or paid ) by the prompt guaranteed payment. The only question then is whether the payment, and/or the associated discount is compensation... from a collateral source wholly independent of the wrongdoer. 13 If so, which it is, then Plaintiff recovers from Defendant the whole loss [without regard to whether that loss] has been wholly or partly indemnified... by 9 Denco Bus Lines v. Hargis, 229 P.2d 560, 564 (Okla. 1951). 10 Romero v. Workers Compensation Court, 1993 OK 150, 863 P.2d 1251; Thomas v. Okla. Orthopedic & Arthritis Found., Inc., 1995 OK 47, 903 P.2d Blatchford v. Alaska Native Tribal Health Consortium, 645 F.3d 1089 (9 th Cir. 2011) (provider may file lien in third-party case rather than bill Indian Health Services). 12 Becker v. Cent. Health and Life Co. of Omaha, 431 N.W.2d 354, 355 (Iowa 1988) (overruled, other grounds); also, Am. Indem. Co. v. Olesijuk, 353 S.W. 2d 71 (Ct. App. Tex. 1961); Graham v. Reserve Life Ins. Co., 161 S.E.2d 485 (N.C. 1968); Nahom v. BCBS of Ariz., 885 P.2d 1113, (Ct. App. Ariz. 1994). 13 Denco Bus Lines v. Hargis, 229 P.2d 560, 564 (Okla. 1951). 8

9 insurance. 14 There is clear Oklahoma Supreme Court precedent that tells us the contractual discounts are subject to the collateral source rule in Blythe v. University of Oklahoma. 15 Blythe involved a workers compensation claim. The injured worker in that case had health insurance that paid some of her prescription costs. She then claimed she was entitled to payment from the workers compensation carrier for those same prescription costs already paid by her health insurance. The Supreme Court agreed, citing a statute from Title 85 (section 45) that says (emphasis added): no benefit, saving, or insurance of the injured employee, independent of the [workers compensation act] shall be considered in determining the compensation or benefit to be paid under this act. The Supreme Court holds that this statute, which excludes from consideration insurance benefits and discounts ( savings ), is synonymous with ( mirrors and is the same ) the common law collateral source rule: 85 O.S. 45 has been the law since its enactment in The language of that statute is clear and unambiguous on its face. Case law generated since that time indicates that this statute has been construed consistently with its plain meaning, and this Court has accordingly refused to consider benefits, saving or insurance of the injured employee, independent of [the Workers Compensation Act]... in determining the compensation or benefit to be paid under this act. 85 O.S. 45(A). While this section of The Workers Compensation Act has never been expressly labeled the collateral source rule, the meaning and application of the statutory provision clearly mirrors that common law damages rule in the context of workers compensation awards and/or benefits. Whether 45(A.) is literally derived from the common law collateral source rule or not, the application of both the rule and the statute is the same albeit applied in different tribunals operating under distinct compensation schemes. Under both the collateral source rule and under the terms of the Workers Compensation statutory provision, 14 Id. 15 Blyth v. University of Oklahoma, 2003 OK 115, 82 P.3d

10 compensation is determined without any reduction for the amount of any benefits the injured party received from his or her health insurance carrier. Stated another way, under both the collateral source rule and statutory scheme, no credit or set-off is given to the liable party for the amounts previously paid by the injured party s health insurance carrier. Despite the lower courts refusal to do so, we recognize that we are constrained to apply the terms of the statute. The collateral source rule, to the extent it is codified in 85 O.S. 45(A.), is applicable to Claimant s claim for prescription reimbursement in this workers compensation action. As another case puts it: A tortfeasor owes for damages properly determined and may not profit from his injured party s insurance contract. 16 In other words, the collateral source rule is broadly construed in Oklahoma. All benefits derived from a plaintiff s insurance run to the plaintiff rather than to the wrongdoer. Plaintiff s Indian Health Services are a benefit born of treaties between the United States and the Indian Tribes in which Native Americans traded their lands for future medical benefits. Part of the benefit conferred to Plaintiff by virtue of those treaties is the savings or discount IHS obtains by virtue of its contractual relationship with her medical providers. That benefit is wholly unconnected from Defendant and thus subject to the collateral source rule. B. That There May be a Windfall Does Not Negate the Collateral Source Rule Defendant next asserts that the creation of a windfall should bar application of the collateral source rule (citing the rule mandating that compensation should be equal to the injury sustained. ) 17 Courts and commentators have long contemplated the possibility that the collateral source rule creates a windfall for Plaintiffs, but consistently reason that it is best 16 Weatherly v. Flournoy, 1996 OK CIV APP 109, 929 P.2d 296, Midland Valley RR v. Barton, 129 P.2d 1007 (Okla. 1942). 10

11 that the windfall run to the injured party rather than to the injury causing tortfeasor. 18 Since the collateral source rule always creates a windfall, the windfall alone is not sufficient reason to prevent the rule. The rule Defendant cites from Mildland Valley RR v. Barton that compensation should be equal to the injury sustained 19 has nothing to do with the collateral source rule and certainly does not negate the rule. Nor does the case even involve a claimed windfall. That rule simply has no bearing in the current issue as the collateral source rule teaches that the benefit of Plaintiff s health insurance, including the discounts Plaintiff obtains under that contract, are part of the injury sustained and thus run to Plaintiff rather than to Defendant. C. Defendant s Eastern District Case is Inapplicable Here The main case cited by Defendant, Compton v. Hale, with little discussion, applies an overly narrow construction of the collateral source rule, applicable if at all, only to Medicaid payments. 20 Compton relies on a law review comment. Judge Eagan, from the Northern District Federal Court holds the opposite of Compton. 21 Judge Eagan found the weight of authority supports Plaintiff s argument that the collateral source rule bars any reference to Am Jur 2d Damages 405; Rest, 2d Torts 920A, cmt b ( it is the position of the law that a benefit that is directed to the injured party should not be shifted so as to become a windfall for the tortfeasor ). Pipkins v. TA Operating Corp, 466 F. Supp.2d 1225 (D. N.M. 2006) ( Avoiding a windfall to a tortfeasor is preferable even if a Plaintiff thereby receives an excessive recovery in some circumstances ); Lopez v. Safeway Stores, Inc., 129 P.3d 487 (Ariz. Ct. App. 2006) (Any windfall arising from the collateral source rule should benefit the Plaintiff, and not the tortfeasor). 19 Defendant's Second Motion in Limine p Compton v. Hale, 2012 U.S. Dist. LEXIS , 5 (E.D. Okla. 2012). 21 Simpson v. Saks Fifth Avenue, 2008 U.S. Dist. LEXIS (N.D. Okla.). 11

12 amounts written off by a hospital under a contract with Medicare. 22 She held as she did because Oklahoma decisions generally apply the collateral source rule broadly in favor of a plaintiff and exclude evidence of an alternative or collateral source that would lessen a plaintiff s damages. 23 She noted the Moorhead case, from Pennsylvania, cited by Defendant here, has been heavily criticized... and [there is no case] showing that Oklahoma applies a similar rule. 24 As Judge Eagan noted, the national trend is to include contractual discounts in the collateral source rule. 25 The court in Pipkins v. TA Operating Corp. faced the same situation. That Defendant tried to exclude evidence and prevent recovery of medical expenses written off or adjusted by Medicare. 26 The court applied New Mexico s collateral source rule, and 10 th circuit precedent, and rejected the argument that the discounted amounts were illusory. 27 Instead, the court likened contractual discounts between the hospital and providers to gratuitous health services provided by hospitals, and reasoned: the health care provider, out of goodwill, waives the plaintiff s financial liability that arises out of the provision of medical services.... [while similarly;] in the case of contractual write offs, the medical care provider waives the write off amount as required by the contractual agreement between the provider and the plaintiff s insurance carrier Id. 23 Id. 24 Id. 25 Pipkins v. TA Operating Corp., 466 F.Supp.2d 1255, 1260 (D.N.M. 2006); Kenney v. Liston, 2014 W.Va. LEXIS 633, fn. 46 (holding with a majority of jurisdictions which have considered the question, and listing 21 different state decisions); Martinez v. Milburn Enters., 290 Kan. 572, (Kan. 2010) (following 22 jurisdictions). 26 Pipkins, 466 F.Supp.2d at Id. at Pipkins, 466 F.Supp.2d at

13 The Pipkins court determined since the gratuitous benefits were collateral to the tortfeasor, the tortfeasor should not receive the windfall. 29 Other courts likewise apply the collateral source rule to gratuitous services. 30 These courts follow the logic that a tortfeasor should [not] profit by any gratuity extended to the victim, 31 and the Plaintiff should not be deprived of the advantage that the gratuitous service confers onto them. 32 Finally, with respect to these Oklahoma federal cases, even Judge White, in Compton, acknowledges his rule applies only to Medicaid benefits for which the Plaintiff has given no consideration and would not apply to Medicare discounts. 33 That same reasoning forms the basis for all of Defendant s Medicaid discount cases (Nanda, McAmis, and Bozeman). Additionally, in none of Defendant s cases had the patient/plaintiff guarantee[d] full payment for all charges, as did Ms. Pewo here. As set out above, IHS is more akin to Medicare, rather than Medicaid since it is given as consideration for the treaties under which the United States gained Indian lands. Like the Medicare cases, the collateral source rule does encompass the payments and discounts obtained for Ms. Pewo under her coverage with Indian Health Services. 29 Id. at Burke v. Byrd, 188 F. Supp. 384 (N.D. Fla. 1960) (involved US Air Force officer who was gratuitously offered his entitled treatment); Arambula v. Wells, 72 Cal. App. 4th 1006, 1008 (Cal. App. 4th Dist. 1999) (applied the collateral source rule to gratuitous payments (including moneys to cover lost wages) by family or friends to assist tort victims through difficult times ); see Rest. 2d Torts 920(A) cmt. (c) ("the fact that the doctor did not charge for his services or the plaintiff was treated in a veterans hospital does not prevent his recovery for the reasonable value of the services.") Am Jur 2d Damages Rest. 2d 920(A) cmt. (b). 33 Compton v. Hale, 2012 U.S. Dist. LEXIS , 5 (E.D. Okla. 2012). 13

14 PROPOSITION III: 12 O.S VIOLATES OUR CONSTITUTION 12 O.S violates the special law provision in the Oklahoma Constitution. Article 5, 46 says: The Legislature shall not, except as otherwise provided in this Constitution, pass any local or special law. It then sets out 28 categories in which special laws shall never be applicable. 34 The 28 areas include restrictions for [r]egulating the practice or jurisdiction of, or changing the rules of evidence in judicial proceedings or inquiry before the court. 35 A statute is a special law where a part of an entire class of similarly affected persons is separated for different treatment. 36 Our Constitution s framers manifest intent was that all persons under the same conditions and in the same circumstances be treated alike and that the legislature be prohibited from tampering with limitations by fashioning special acts. 37 The vice of special acts is that they create preferences and establish inequality. 38 Section artificially separates personal injury plaintiffs into two classes: those who have health insurance and those who do not. Applying section would mean a Defendant is less liable for inflicting harm on someone with insurance coverage than if the same Defendant had committed the very same wrong on any other tort victim. Such an application would run contrary to our constitution. 34 Reynolds v. Porter, 1988 OK 88, 26, 760 P.2d 816, Okla. Const. Art. V, Grant v. Goodyear Tire & Rubber Co., 2000 OK 41, 5, 5 P.3d 594, Reynolds, 1988 OK 88, 19, 760 P.2d at Id. 14

15 CONCLUSION As with Defendant s First Motion in Limine, Defendant does not satisfy the requirement of 12 O.S. section because he does not have signed statements from the medical providers agreeing to accept the amount paid as full payment. Thus, the core purpose behind the collateral source rule mandates that this Court not confer Plaintiff s collateral benefits, including the savings or discounts to Defendant tortfeasor. Finally, 12 O.S violates the special law provision in the Oklahoma Constitution. For these reasons, this court should once again deny Defendant s Motion in Limine, and allow into evidence the full amount of Plaintiff s medical bills and prohibit discussion of IHS discounts or write offs. REX TRAVIS, OBA #9081 rextravis@travislawoffice.com PAUL KOURI, OBA #20751 paulkouri@travislawoffice.com PO BOX 1336 Oklahoma City, OK Telephone: (405) facsimile: (405) Attorneys for Plaintiff CERTIFICATE OF SERVICE This is to certify that on the 24 th day of June 2014, the above and foregoing instrument was mailed to: Thomas P. Manning, Jordan Sutherland, Angela Allies & Associates, 9400 N. Broadway Extension, Ste 500, Oklahoma City, OK and Scott Pruitt, Oklahoma Attorney General, 313 N.E.. 19 th St. Oklahoma City, Ok REX TRAVIS 15