As a result of an accident caused by the negligence of Denny Defendant, Paula Plaintiff received medical treatment.  The medical bills for the treatment that she received totaled $100,000.  Paula, however, had insurance, and her insurance company paid only $40,000 of the amount billed, while her health care providers “wrote off” the disallowed $60,000 in charges. 

Plaintiff subsequently filed a lawsuit against the defendant seeking damages for her injuries, including the medical expenses that were incurred.  Pursuant to the collateral source rule that is followed in most American jurisdictions, including Maryland, Virginia, and the District of Columbia, the defendant cannot claim that he is not liable to the plaintiff for the medical expenses she incurred because those expenses were paid by her medical insurer.  But can the defendant claim that the amount of medical expenses that he should be liable for is the $40,000 that was actually paid to the plaintiff’s health care providers in full and final payment for the services that they provided, or should the plaintiff be able to recover the full $100,000 billed?  Courts in recent years have been considering variations of this question.  This article will provide an overview on how Maryland, Virginia and the District of Columbia have addressed this issue. Generally, a plaintiff in these three jurisdictions can seek the full amount of the medical bills identified as damages, including amounts written off, although an exception to this rule exists in Maryland medical malpractice cases.

District of Columbia

In Hardi v. Mezzanotte, 818 A.2d 974 (D.C. 2003), the injured plaintiff received treatment that resulted in medical bills totaling $209,000.  Plaintiff’s medical insurer paid $102,000 of these bills, and the remaining $107,000 was written off by the health care providers.  Nevertheless, in a subsequent personal injury suit, the District of Columbia Court of Appeals found that the plaintiff could claim the entire $209,000 in medical expenses as damages.  Most recently, in Shell v. Rock Creek Nursing Center, Inc., 2014 D.C. Super. Lexis 3 (2014), bills totaling $57,000 were submitted by a hospital for treatment of injuries sustained by a nursing home resident.  The hospital, however, accepted $10,000 from Medicare as full payment of the bills and wrote off the remaining $47,000.  In a subsequent lawsuit, a Superior Court judge held that the plaintiff could seek damages for the medical expenses that had been written off by the hospital pursuant to a Medicare reimbursement formula.  Both the Hardi and Shell courts, however, specifically noted that they were not considering whether the defendants could challenge the fairness and reasonableness of the amounts billed by the providers by introducing evidence that they accepted the reduced amounts as payment in full for the bills. 

Maryland

In Maryland, the general rule is that a plaintiff can recover the full amount of his or her medical bills (including amounts written off) if the plaintiff presents competent evidence (typically expert testimony) that those bills are fair and reasonable.  Conversely, a defendant is not permitted to introduce evidence that portions of the bills were written off without presenting competent evidence that the amount actually paid by the medical insurer was fair and reasonable.  Brethren Mutual Insurance Co. v. Suchoza, 212 Md. App. 43 (2013).

An exception to this general rule exists in Maryland medical malpractice cases.  In medical malpractice actions, a statute provides that where medical bills have been paid, only the amounts actually paid can be recovered in an action against a health care provider.  In such cases, the jury is not informed that parts of medical bills have been paid and the balance written off.  Rather, amounts written off are subtracted from the jury’s award by the court at the conclusion of trial.  Lockshin v. Semsker, 412 Md. 257 (2010).

Virginia

In Virginia, a plaintiff can recover the full amount of his or her health care provider’s medical bills even though only a portion of those bills were paid by a medical insurance carrier and the balance written off.  Acuar v. Letourneau, 260 Va. 180 (2000).  Furthermore, a defendant cannot introduce evidence of the amount actually paid by a health insurance carrier in order to establish the reasonable value of the medical services provided.  Radvany v. Davis, 262 Va. 308 (2001).  While Acuar and Radvany involved private health insurance, the United States District Court for the Western District of Virginia has ruled that the Virginia Supreme Court would probably find that the amount of medical bills written off by medical care providers can be recovered by plaintiffs even where those bills were paid by Medicaid, and not by private health insurance.  Wright v. Smith, 641 F. Supp. 2d 136 (W.D. Va. 2009)