Massachusetts Lawyer Alert: Admissibility of Medical Expenses Affected by New SJC Ruling -- July 2010

Trial Judge Improperly Limited Evidence to Amounts Paid by Insurer

The Supreme Judicial Court, affirming an earlier opinion of the Appeals Court, has reversed a Superior Court judge and ordered a new trial in a case where the judge improperly restricted evidence of medical expenses. While the SJC has affirmed the statutory right to have medical bills admitted under G.L. c. 233, Sec. 79G, the court did open the door to rebuttal. The decision will have a significant effect on the presentation of evidence in personal injury cases.

The case on appeal arose from a motor vehicle accident. The trial judge, over objection of plaintiff's counsel, refused to allow evidence of the medical expenses pursuant to G.L. c. 233, Sec. 79G, even though the bills had been properly authenticated. The plaintiff was forced into a stipulation regarding what had actually been paid by MassHealth, the Massachusetts Medicaid program. This was substantially less than the actual bills from the providers (approximately $16,000 instead of approximately $112,000). After reduction for comparative negligence and personal injury protection set-off, the judgment for the plaintiff was $28,556.60. Plaintiff appealed.

The SJC analyzed both the statutory framework for the admissibility of the bills as well as the collateral source rule which ordinarily prohibits the admission of evidence of payments from collateral sources. The court did not hesitate to conclude that the legislature had constructed a clear exception to the hearsay rule, and that properly certified bills should be admitted into evidence without regard to what was actually paid. The court also affirmed the basic principles of the collateral source rule, which by design is intended to reduce tortious conduct. The court noted that the rule may at times provide a windfall to an injured plaintiff, but, more important, it should never provide a savings to a negligent defendant.

Nevertheless, the court opened the door for further evidence on the reasonableness of the medical expenses. The court indicated that a defendant may call representatives of medical providers to inquire about the range of payments the provider would accept for particular services. The court left it to the various trial courts to fashion appropriate jury instructions for this new evidentiary experience.

In a thoughtful concurrence, Justice Cowin pointed out the problems with the half-step taken by the majority. Among other things, jurors are largely aware of the presence of medical insurance, though they are not routinely instructed about it. She suggested a better solution would have been to open up "all evidence that bears in any way on the determination of the reasonable value of medical services.

The case is Law v. Griffith, SJC-10463 (July 20, 2010). The full text of the opinion is available by clicking here.

Practice Point

The problem that will no doubt develop, as pointed out in the concurrence, is protracted discovery and extended evidence at trial over the amounts of medical bills. There is an important opportunity here, and the door is at least pushed open a little by Justice Cowin, to ask the court for very clear instructions on the possibility of liens. Practitioners should ask the court to instruct the jury that there has been no direct evidence of payment of bills, and it is not the jury's job to make adjustments for any payments that may (or may not) have been made; it is the job of the court and the parties after trial. Such an instruction will help prevent juries from making adjustments on medical expenses based upon their assumptions that bills were paid by third party providers

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