by Catherine Rutherford
Introduction
Under Louisiana law, medical expenses incurred alongside litigation are presumed to be reasonable if causally linked to the accident.[1] Medical bills in Louisiana do not need to appear reasonable to be admitted into evidence as true, reasonable, and correct.[2] Despite practitioners contending that victims must provide evidence that the hospital expenses incurred were reasonable,[3] Louisiana courts neither regularly require this evidence from plaintiffs nor regularly allow defendants to admit contradictory evidence of unreasonable expenses for the truth of the matter.[4]
Under Louisiana law, a tortfeasor must pay for all medical treatment the victim receives, including overtreatment or unnecessary treatment.[5] The only exception is if the victim incurs treatment in bad faith.[6] Similarly, if a tort victim has been overcharged for causally related and presumptively necessary medical treatment, the tortfeasor is liable for those absent a showing of bad faith by the victim.[7]
Unreasonable medical bills burden not only individuals, but also the judicial system—ultimately resulting in windfalls to healthcare providers and plaintiffs at the expense of defendants.[8] Currently, parties in Louisiana are generally unable to introduce expert testimony to evaluate, substantiate, or refute the reasonableness of medical billing pursued alongside litigation. Healthcare providers continually make errors in medical billing such as “unbundling” of services, uncoded items, and duplicate charges or charges for services not received.[9] Trial judges who allow medical billing expert testimony into evidence to refute these mistakes and unreasonable costs are continuously reversed by appellate courts who conclude that it is reversible error when a trier of fact fails to award the full medical expense amount—without regard to errors in the bill.[10]
I. Medical Billing is Too Complex to be Presumed Prima Facie Reasonable and Correct
Medical coding is the process of taking a healthcare provider’s chart notes and converting them into the proper record-tracking and billing codes.[11] When a code is entered into a patient’s chart and then transferred to an invoice, a corresponding price is automatically generated and calculated on the bill.[12] A database provides the hospital with the “standard” charges for each good or service at the facility.[13] The term standard is misleading because the prices listed are routinely at least five to ten times more than the average reimbursement amount that hospitals accept from insurers for provided medical care.[14] Chargemaster prices are simply made up by the provider primarily for the purpose of future leverage when negotiating with private health insurance providers.[15] In practice, hospitals receive the chargemaster prices from fewer than five percent of patients.[16]
Often when there has been injury resulting from an auto accident or some other indication of possible litigation, facilities flag patients and render services as potentially covered by third-party liability (TPL) payers.[17] In the TPL context, healthcare facilities have a much higher chance of receiving all or a substantial portion of the heightened chargemaster prices because potentially liable insurance companies have deeper pockets than most private citizens.[18] The promise or potential of the full collection amount will incentivize hospitals to use liens to ensure a patient does not recover via settlement or judgment until the facility’s exorbitant bill is fully paid.[19]
Courts have found that reasonableness of past medical expenses can be established through testimony of someone with knowledge of the services provided and the usual and customary charges for such services who can testify that the medical bills in question are reasonable and fair.[20] These factors may be established through a treating healthcare provider with knowledge of pricing, an employee of the facility with knowledge of billing practices, or a medical billing expert.[21] A medical coding and billing specialist may act as a liaison between the medical industry and the legal community as an expert witness.[22]
Experts estimate that nearly 80% of medical bills contain errors.[23] Figuring out and deciphering the correctness of a bill can be difficult due to the potential combinations of diagnosis and procedure codes found on invoices.[24] A patient could owe thousands of dollars more due to a single incorrect code on a single bill.[25] Errors in billing can be nearly impossible to recognize without the assistance of a professional.[26]
II. Medical Billing Experts in Louisiana
When medical billing expert testimony is permitted in Louisiana, the evidence is allowed for impeachment purposes only and cannot change the damage award amount.[27] In Louisiana, appellate courts routinely find reversible error when a trier of fact fails to award full medical expense amounts that the plaintiff incurred due to the defendant’s negligence.[28] Under Louisiana law, a tortfeasor must pay for all medical treatment a victim receives—including overtreatment, unnecessary treatment, or error-filled bills—unless the victim incurs treatment in bad faith.[29] Similarly, if a tort victim has been overcharged for causally related and presumptively necessary medical treatment, the tortfeasor is liable for those expenses absent bad faith.[30]
Currently, to establish proof of the reasonableness or unreasonableness of medical expenses, courts require expert testimony; however, Louisiana state courts are hesitant to admit the testimony for purposes of changing damage awards.[31] Louisiana law has failed to allow litigants to introduce expert testimony to evaluate, substantiate, or refute the reasonableness of medical billing evidence. In Louisiana, litigants can easily establish evidence proving the causal link between the accident and injuries sustained and reasonableness of medical treatment pursued alongside litigation, but they are prohibited from introducing expert testimony that would invalidate the reasonableness of the price of the medical treatment. Unreasonable medical bills burden not only individuals but also the judicial system, ultimately causing windfalls to healthcare providers at the expense of litigants.
Healthcare facilities are growing more notorious for either fraudulent or negligent billing behavior.[32] While patients are unaware, medical invoices may be improperly coded and subject to upcoding,[33] duplicate billing,[34] or unbundling.[35] Fraud and negligence aside, the chasm between the price charged and price paid is significant.[36] The use of chargemaster prices to calculate the value of medical expenses in litigation is inappropriate because it is based on arbitrary pricing and leads to excessive judgments.[37] Similarly, the Hospital Price Transparency Rule and the public’s desire for transparency demonstrate the regulatory awareness of the problems with the reasonableness of the costs of medical care.[38] Other jurisdictions frequently admit expert testimony that a patient’s medical bills are excessive.[39] Although Louisiana courts purport to admit evidence regarding the reasonableness of medical billing, Louisiana jurisprudence rejects that assertion.[40]
For example, in Thomas v. Chambers, the defendants attempted to introduce medical billing expert testimony to assist the jury in determining whether the plaintiff’s medical bills were reasonable.[41] The court held the medical billing expert’s testimony was not admissible if used for the purpose of suggesting to the jury that the past medical expenses should be reduced because the billing amounts were unreasonably high for the treatment received.[42] However, the court did permit the medical billing expert to testify for impeachment purposes so that she could assist the jury in understanding that the treating physician billed over $60,000 for injections when the services were only approved at $8,000.[43] Allowing this information to go to the jury and still awarding the full $60,000 in medical expenses provides a windfall to either the physician or plaintiff at the defendant’s expense.
III. Moving Forward
Louisiana courts should clarify and quash confusion regarding the admissibility of expert testimony evidencing the reasonableness of incurred medical expenses at trial.[44] Louisiana legislators should enact a new provision in the Louisiana Revised Statutes to include a reasonableness clause regarding all past medical expenses. Currently, Louisiana does not have a statute clearly defining how the courts should approach the presumption of reasonableness of medical billing or the admissibility of expert testimony. Further, because medical billing expert testimony is unable to affect a plaintiff’s damage award, it is currently unclear how a defendant would be able to prove the award is unreasonable for the purposes of reducing the award; therefore, a definition of reasonableness would assist the parties, judges, and juries.
The new statute should read as follows:
A. Authenticity of bills for medical services provided and the reasonableness of the charges of the health care provider shall be rebuttably presumed upon identification by the plaintiff of the original bill or a duly authenticated copy and the plaintiff’s testimony (i) identifying the health care provider, (ii) explaining the circumstances surrounding his receipt of the bill, (iii) describing the services rendered, and (iv) stating that the services were rendered in connection with treatment for the injuries received in the event giving rise to the action. The presumption herein shall not apply unless the opposing party or his attorney has been furnished such medical records at least twenty-one days prior to trial.[45]
B. Testimony from medical billing experts may be used to rebut the presumption of reasonableness of the charges of health care providers. Medical billing expert testimony may be used to reduce the damage awards even absent bad faith on behalf of plaintiff. Both plaintiff and defendant may hire a medical billing expert.
C. In the event a damage award is reduced based on the unreasonableness of past medical bills, healthcare providers are prohibited from collecting amounts a court has found to be unreasonable.
Subsection “A” explicitly stating that the presumption of reasonableness is rebuttable implies the allowance and admission of medical billing experts and other experts to refute the contents of medical expenses. This will allow both defendants and plaintiffs to admit evidence regarding the reasonableness of the medical expenses. While cutting unreasonable expenses from the equation is an obvious win for defendants, plaintiffs would also benefit from medical billing expert reports because after settlement, plaintiffs can present proof of unreasonable charges to healthcare facilities to negotiate reductions of unpaid bills.[46]
The language in Subsection “B” would grant defendants the opportunity to dispute medical bills for reasons beyond bad faith. Medical expenses do not need to be incurred in bad faith for the charges to be unreasonable.[47] This would allow expert testimony to be used for more than just impeachment purposes. If medical expenses are found to be unreasonable, the burden should then shift to the other party to prove that the expenses are reasonable in nature.[48]
The purpose of subsection “C” of the proposed statute is to incentivize healthcare providers to either charge more reasonable rates or be more careful when billing so as to avoid errors. If the defendant could avoid paying unreasonable rates, then both the plaintiff and healthcare provider could become more careful selecting the rates used and coding the services while treating. Incorrect and unreasonable expenses in billing is a nationwide problem,[49] so each party in litigation should try to stymie the effects of unfair awards.
Additionally, the judiciary may be able to adopt a bright-line test for determining reasonableness if an appropriate case came before it. Some factors to consider in the creation of this test are: (1) customary charges for similar services rendered by similarly situated healthcare providers; (2) cost-to-charge ratios reported to Medicare; and (3) the amounts the provider accepts as payment in full for identical care.[50] These factors may assist the fact finder in determining if medical bills presented represent a reasonable amount.
Despite growing awareness of unreasonable chargemaster rates, Louisiana has failed to address and account for the widening gap between charged and paid medical billing.[51] The time has come to stop the free flow from unreasonable medical damage awards in litigation. Except for healthcare providers, everyone loses when all medical bills are assumed reasonable simply because a causal link to the injury sustained exists.[52] Judges should turn to the legislature for guidance and change on the admissibility of medical billing expert testimony.
[1] Brightman v. Reg’l Transit Auth., 543 So. 2d 568, 570–71 (La. Ct. App. 4th Cir. 1989) (“When a plaintiff alleges that he incurred medical expenses and that allegation is supported by a bill, unless there is sufficient and contradictory evidence or reasonable suspicions that the bill is unrelated to the accident, it is sufficient to support the inclusion of the item in the judgment.”).
[2] See generally Rodrigue v. Nat’l Ins. Co., No. 20-2267, 2021 WL 3284254 (E.D. La. July 2, 2021).
[3] Russ M. Herman & Joseph E. Cain, Louisiana Personal Injury §12:37 (2021).
[4] See generally Collins v. Benton, 470 F. Supp. 3d 596, 596 (E.D. La. 2020).
[5] Rodrigue, 2021 WL 3284254, at *3.
[6] Id.
[7] Lair v. Carriker, 574 So. 2d 551, 553 (La. Ct. App. 3d Cir. 1991); see also Beasley v. Yokem Toyota, 767 So. 2d 149, 158 (La. Ct. App. 2d Cir. 2000).
[8] See generally Steven I. Weissman, Remedies for an Epidemic of Medical Provider Price Gouging, 90 Fla. Bar J. 22, 23 (2016).
[9] Thomas N. Osran, Medical Bills in Illinois – What’s ‘Fair and Reasonable’?, 104 Ill. Bar J. 30, 33 (2016).
[10] See generally, Gunn v. Robertson, 801 So. 2d 555, 564 (La. Ct. App. 5th Cir. 2001); Yee v. Imperial Fire & Cas. Ins. Co., 25 So. 3d 872, 877 (La. Ct App. 2d Cir. 2009); Revel v. Snow, 664 So. 2d 655, 661 (La. Ct. App. 3d Cir. 1995).
[11] Kelsey Tressler, What Is a Medical Coding and Billing Specialist?, Ultimate Med. Acad. (Aug. 5, 2021, 1:01 PM), https://www.ultimatemedical.edu/blog/what-is-a-medical-coding-and-billing-specialist/ [https://perma.cc/525Y-7JSM]. This Blog Post attempts to provide a brief overview of the medical billing and coding processes to provide insight into the intricacies contained within the field.
[12] Id.
[13] Weissman, supra note 8, at 23. Medical care facilities maintain a price list for the goods and services they provide to customers. Some facilities maintain their own list within an on-site database; other facilities outsource this herculean task to an external vendor that specializes in invoicing medical goods and services. George A. Nation III, Hospital Chargemaster Insanity: Heeling the Healers, 43 Pepp. L. Rev. 745, 746–47 (2016). These price lists are typically called “chargemaster” price lists. Weissman, supra note 8, at 23. The lists go by different names, including “chargemaster price lists,” “list prices,” or “billed charges.” George A. Nation III, The Valuation of Medical Expense Damages in Tort: Debunking the Myth that Chargemaster-Based “Billed Charge” Are Relevant to Determining the Reasonable Value of Medical Care, 95 Tul. L. Rev. 937, 943 (2021) [hereinafter Nation, The Valuation of Medical Expense Damages in Tort].
[14] Nation, The Valuation of Medical Expense Damages in Tort, supra note 13, at 943.
[15] Id.
[16] Id.
[17] Id. at 940.
[18] Id.
[19] Id. Even if a plaintiff-patient has private or governmental health insurance, some facilities have an internal policy of not submitting the patient’s medical expenses to the health insurance provider. Id. at 943. This practice is often done in hopes of recovering the full amount from a tortfeasor or his or her liability insurer. Id.
[20] Osran, supra note 9, at 32.
[21] Id.
[22] Tressler, supra note 11.
[23] Stephanie Booth, Up to 80% of Hospital Bills Have Errors. Are You Being Overcharged?, healthline (May 21, 2019), https://www.healthline.com/health-news/80-percent-hospital-bills-have-errors-are-you-being-overcharged [https://perma.cc/TQM5-JRJS]. See also, Osran, supra note 9, at 31 (citing Jessica Silver-Greenberg, How to Fight a Bogus Bill, Wall St. J. (Feb. 19, 2011, 12:01 AM ET), http://wsj.com/articles/SB10001424052748703312904576146371931841968 [https://perma.cc/9GRQ-U9JA]). One common error in medical billing is the “unbundling” of medical charges. Id. at 33. Unbundled services are those broken into their component parts and billed separately to increase medical expenses. Id. Unbundled charges or services frequently constitute fraudulent behavior. Office of Public Affairs, Baton Rouge Doctor Sentenced to Prison for Fraudulent Billing Scheme, The U.S. Dep’t of Just. (May 17, 2019), https://www.justice.gov/opa/pr/baton-rouge-doctor-sentenced-prison-fraudulent-billing-scheme [https://perma.cc/4QRS-AB3B] (Defendant admitted submitting false claims and falsifying records indicating minor surgical procedures occurred on days subsequent to office visits for nearly a decade.); Education & Outreach, Health Care Billing Errors and Fraud, AARP, https://www.aarp.org/health/health-insurance/info-05-2012/health-care-billing-errors-and-fraud.html [https://perma.cc/RB6T-5NAV] (last visited Oct. 31, 2022) (Unbundling is illegal, but it can increase profits.). Occasionally facilities charge for items without codes, which may mean the item should not be billed separately. Osran, supra note 9, at 33. For example, “routine supplies” such as dressings, sponges, and similar items are typically not supposed to be billed separately but frequently are. Id. These items appearing on a bill without a corresponding code indicates the items should not have a standalone price. Id. Another common error is a facility charging for a service that was not actually given, or alternatively, a duplicate charge. Id. Duplicate billing can occur a number of ways including when healthcare facilities (1) charge more than once for the same service; (2) fail to check to see if a procedure has already been billed; (3) bill both insurance, either private or governmental, and the patient at the same time; or (4) bill across time for the same procedure, treatment, or testing that the patient received in order to receive the maximum amount allowed per day. Matt Moneypenny, Everything You Need to Know About Duplicate Billing, Etactics (July 3, 2019), https://etactics.com/blog/duplicate-billing [https://perma.cc/MH79-PN36]. Frequently, confusion about medical billing codes deter patients from carefully checking for duplicate billing or other medical billing errors, such as a charge for unreceived treatments, especially if their health insurer is paying. The ambiguity of codes makes it difficult to understand the charged services, and patients frequently lack the incentive to double check the correct nature of every single bill. Id. A third error occurs when a healthcare provider “upcodes,” or bills for a procedure or treatment that is more complicated and expensive than the procedure or treatment that actually took place. Education & Outreach, supra note 23. For example, group therapy sessions could be billed as individual sessions, or a lower priority ambulance ride could be coded as if it were emergency life support transportation. Id. These small alterations in billing codes significantly increase the amount providers are paid. Id.
[24] Booth, supra note 23.
[25] Id.
[26] Id.
[27] See generally Rodrigue v. Nat’l Ins. Co., No. 20-2267, 2021 WL 3284254, at *1 (E.D. La. July 2, 2021).
[28] See generally Gunn v. Robertson, 801 So. 2d 555, 564 (La. Ct. App. 5th Cir. 2001); Yee v. Imperial Fire & Cas. Ins. Co., 25 So. 3d 872, 877 (La. Ct. App. 2d Cir. 2009); Revel v. Snow, 664 So. 2d 655, 661 (La. Ct. App. 3d Cir. 1995).
[29] Orgeron v. Prescott, 636 So. 2d 1033, 1041 (La. Ct. App. 5th Cir. 1994).
[30] Lair v. Carriker, 574 So. 2d 551, 553 (La. Ct. App. 3d Cir. 1991); see also Beasley v. Yokem Toyota, 767 So. 2d 149, 158 (La. Ct. App. 2d Cir. 2000). Examples of bad faith include seeking treatment after recovery for the sole purpose of increasing the damage award or exaggerating the collision’s impact and the extent of injuries; however, disagreement with a course of treatment does not constitute bad faith. See generally Bass v. Allstate Ins. Co., 750 So. 2d 460, 468 (La. Ct. App. 2d Cir. 2000); Hamilton v. Wild, 917 So. 2d 695, 699 (La. Ct. App. 2d Cir. 2005); Vines v Wood, 785 So. 2d 126, 131 (La. App. 3d Cir. 4/4/01).
[31] See generally Collins v. Benton, 470 F. Supp. 3d 596, 596 (E.D. La. 2020).
[32] Alia Paavola, Healthcare billing fraud: 11 recent lawsuits, settlements, Becker’s Hosp. Rev. (Nov. 2, 2021), https://www.beckershospitalreview.com/legal-regulatory-issues/healthcare-billing-fraud-11-recent-lawsuits-settlements.html [https://perma.cc/443M-L4Y6] Booth, supra note 23. See also Osran, supra note 9, at 31 (citing Silver-Greenberg, supra note 23).
[33] Education & Outreach, supra note 23.
[34] Osran, supra note 9, at 33.
[35] Id.
[36] Id. at 34 (citing George A. Nation III, Determining the Fair and Reasonable Value of Medical Services: The Affordable Care Act, Government Insurers, Private Insurers and Uninsured Patients, 65 Baylor L. Rev. 425, 431 (2013)).
[37] Nation, The Valuation of Medical Expense Damages in Tort, supra note 13, at 957.
[38] See generally Jeff Lagasse, Just 5.6% of hospitals are compliant with price transparency rule, Healthcare Fin. (July 19, 2021), https://www.healthcarefinancenews.com/news/just-56-hospitals-are-compliant-price-transparency-rule [https://perma.cc/LG2P-UDX2].
[39] Osran, supra note 9, at 33.
[40] Herman & Cain, supra note 3, at §12:37; see also La. Rev. Stat. § 9:2800.27 (2021); Rodrigue v. Nat’l Ins. Co., No. 20-2267, 2021 WL 3284254, at *1 (E.D. La. July 2, 2021); Collins v. Benton, 470 F. Supp. 3d 596, 603 (E.D. La. 2020).
[41] Thomas v. Chambers, No. 18-4373, 2019 WL 8888169, at *12 (E.D. La. Apr. 26, 2019).
[42] Id.
[43] Id. at *14.
[44] This Blog Post does not purport to tackle issues relating to the reasonableness of care or treatment sought or rendered in connection with litigation but instead focuses solely on the reasonableness of the cost of care based on factors, which includes the geographical region, cost bundling, and improper charges.
[45] Va. Code § 8.01-413.01 (2022).
[46] Osran, supra note 9, at 33.
[47] See supra discussion Part II.
[48] The reader should take note that the reasonableness of the expenses is in question at this point—not the reasonableness of the medical treatment.
[49] Booth, supra note 23; see also Alia Paavola, supra note 32.
[50] Osran, supra note 9, at 34.
[51] See discussion supra Part I regarding unreasonable billing through chargemaster price lists.
[52] Brightman v. Reg’l Transit Auth., 543 So. 2d 568, 570–71 (La. Ct. App. 4th Cir. 1989) (“When a plaintiff alleges that he incurred medical expenses and that allegation is supported by a bill, unless there is sufficient and contradictory evidence or reasonable suspicions that the bill is unrelated to the accident, it is sufficient to support the inclusion of the item in the judgment.”).