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Defending the D.C. Double Dip

August 18, 2022

Defendants in civil negligence matters have long been frustrated by the medical expense “double dip” permitted under DC laws. The “double dip” refers to the practice where plaintiffs are able to get not only one “dip” for the reduced medical expenses actually paid but a second “dip” on top; namely, the additional amount the plaintiff would have paid but for a reduction in charge. Any argument against the “double dip” had long been thwarted by the dreaded collateral source doctrine. In the past ten years, however, several D.C. trial judges have carved out an exception in malpractice actions for medical expenses paid by Medicare/Medicaid. While non-binding, these Orders detailing the logic against a “double dip” have also opened the door for similar Medicare/Medicaid reductions in all D.C. negligence actions.

D.C. Courts have long held that evidence of private insurance is typically deemed inadmissible under the collateral source doctrine. Hardi v. Messanotte, 818 A.2d 974 (D.C. 2003).  The key principle guiding this doctrine is that “a party should receive the benefit of a bargain for which he or she has contracted” through that private health insurance. See Stewart v. Washington Hosp. Ctr. Corp., Case No. 2013 CA 005130 M (D.C. Super. Ct. December 21, 2015), (quoting Hardi, supra, 818 A.2d at 984). For years, D.C. and other jurisdictions have extended this rational to exclude evidence of any reduction in medical expenses obtained by insurance. District of Columbia v. Jackson, 451 A.2d 867 (D.C. 1982).

 Several Judges on the DC Superior Court Bench then began to distinguish Medicare/ Medicaid payments from the type of payments covered under collateral source rule.  “[E]vidence demonstrating the medical costs incurred by Plaintiffs for treatment received from healthcare providers participating in Medicaid and Medicare would be limited to the amount allowed by Medicaid and Medicare, respectively.” Stewart v. Washington Hosp. Ctr. Corp. at 6 (quoting Hardi, 818 A.2d at 985 n.5 and Moorhead v. Crozer Chester Med. Ctr., 765 A.2d 786, 787-90 (Pa. 2001) (abrogated on other grounds by Northbrook Life Ins. Co. v. Commonwealth, 949 A.2d 333 (2001)); See also, Acker v. Specialty Hosp., Case No. 2011 CA 5701 M (D.C. Super. Ct. July 9, 2013) and Brunson v. Capitol Med. Ctr., LLC, Case No. 2009 CA 5930 M (D.C. Super. Ct. April 15, 2013).

Some of the factors focused on can be unique to malpractice actions (e.g., where the defendant/HCP contracted with Medicare/Medicaid and was obligated to accept the reduced amount as to defendant’s charges).  However, the courts analysis also considers factors ultimately germane to all negligence actions.  For example, judges have noted that as opposed to private insurance (which is purchased by a plaintiff and whose rights are merely contractual), Medicare/Medicaid is obligated by statute to pay for services rendered when a health care recipient’s financial situation entitles him or her to payment.

More importantly, several Judges have raised the fundamental unfairness of the “double dip.” In Acker v. Specialty Hosp., Judge Cordero determined “the application of the collateral source rule would, in this case, result in a double payment by the alleged tortfeasor” because the reduction of bills is “not based on a contract between a third party and Plaintiff.” Id. at 4 (citing Hardi, 818 A.2d at 985) (Emphasis added).

Judge Epstein in Brunson v. Capitol Med. Ctr likewise found “the measure of reasonable and customary medical expenses …  is the amount actually paid by Medicaid on the patient’s behalf,” Id. at 6. Anything else would be a windfall for the Plaintiff:

The collateral source rule does not require that tortfeasors pay the highest charge that could be considered reasonable, and it does not permit a patient covered by Medicaid to recover damages for medical services in excess of the amount by paid Medicaid and pocket the windfall. Id. at 7.

Most recently, Judge Pasichow agreed with Judges Epstein and Cordero, concluding that the adjusted price paid by Medicare/Medicaid constitutes the admissible costs for medical bills. See Hill v. Capital Digestive Care, LLC, Case No. 2018 CA 004998 M (D.C. Super Ct. May 21, 2020) (“although the initial medical bill presented by the health care provider was higher, this Court concurs with recent Superior Court decisions by Judge Anthony Epstein and Judge Laura Cordero in 2013 and Judge Michal L. Rankin in 2019 finding that the fair and reasonable value of medical services rendered is the adjusted price paid by the health insurance provider.”)(citing Brunson, supra, Acker, supra, and Levine v. Walker, Case No. 2017 CA 00029 (D.C. Super. Ct. 2019)).

While the cases discussed above were medical negligence actions, the analysis would apply to any personal injury case involving medical bills as part of the claimed damages.  Given the above, we recommend that all Defendants be vigilant in challenging the claimed past medical expenses and request that the court reduce the past expenses to what was actually paid.  At a minimum, this should be done to preserve the issue for appeal.