Mary K. Patchett, Appellant (Defendant Below),
Ashley N. Lee, Appellee (Plaintiff Below).
Appeal from the Hamilton Superior Court 1, No.
29D01-1305-CT-004116 The Honorable Steven R. Nation, Judge
Petition to Transfer from the Indiana Court of Appeals, No.
Attorneys for Appellant Karl Mulvaney Jessica Whelan Bingham
Greenebaum Doll LLP Indianapolis, Indiana Robert F. Ahlgrim,
Jr. State Farm Mutual Automobile Insurance Company
Attorneys for Amicus Curiae Indiana Health Care Association
Lucy R. Dollens Edward L. Holloran Grant R Krevda Quarles
& Brady LLP Indianapolis, Indiana
Attorneys for Amicus Curiae Defense Trial Counsel of Indiana
Jon M. Pinnick Angela J. Delia Rocco Michael F. Mullen
Schultz & Pogue, LLP Indianapolis, Indiana, Donald B.
Kite, Sr. Of Counsel Wuertz Law Office, LLC Indianapolis,
Attorney for Amicus Curiae American Tort Reform Association
Bradley J. Buchheit Tucker Hester Baker & Krebs, LLC
Attorneys for Amicus Curiae Indiana Legal Foundation Mary
Nold Larimore Jenny R. Buchheit Derek R Molter Ice Mller LLP
Attorneys for Appellee Daniel G. Foote Tabor Law Firm, LLP
Attorneys for Amicus Curiae Indiana Trial Lawyer Association
Joseph N. Williams Riley Williams & Piatt, LLC
Stanley v. Walker, 906 N.E.2d 852 (Ind. 2009), we
interpreted Indiana's collateral-source statute to permit
a defendant in a personal-injury suit to introduce discounted
reimbursements negotiated between the plaintiff's medical
providers and his private health insurer, so long as
insurance is not referenced. Today, we hold the rationale of
Stanley v. Walker applies equally to reimbursements
by government payers. The animating principle in both cases
is that the medical provider has agreed to accept the reduced
reimbursement as full payment for services rendered. The
reduced amount is thus a probative, relevant measure of the
reasonable value of the plaintiff's medical care that the
factfinder should consider.
and Procedural Background
Patchett admits she drove her car negligently into oncoming
traffic in 2012, striking Ashley Lee's vehicle and
causing Lee injuries that required medical treatment. Lee
sued and sought damages that would "fully and fairly
compensate her". Patchett admitted she was liable for
the accident and generally agreed Lee received necessary
medical treatment for her resulting injuries. But Patchett
contested the reasonable value of Lee's medical care, so
the parties prepared for a trial on damages.
parties agreed that Indiana Evidence Rule 413 allowed Lee to
introduce her accident-related medical bills totaling $87,
706.36 as evidence those charges were reasonable. The parties
disagreed, however, whether Patchett could introduce evidence
that Lee's providers accepted a reduced amount as payment
in full. Specifically, because Lee was enrolled in the
Healthy Indiana Plan (HIP), a government-sponsored healthcare
program, her providers, as HIP participants, accepted
HIP's prevailing reimbursement rates of $12, 051.48 in
full satisfaction of those charges- an 86-percent discount
from the amounts billed.
moved before trial to prevent the jury from hearing the
reduced HIP rates. Patchett objected, but the trial court
granted Lee's motion. In addition to finding that the HIP
payments are subject to the collateral-source statute and not
permitted by Stanley, the court excluded the HIP
amounts under Evidence Rule 403, because it found HIP's
reduced rates would only confuse the jury. The court
certified its order for interlocutory appeal, observing that
"whether [Patchett] may prove the reasonable value of
[Lee's] medical expenses by introducing evidence of the
discounted payments made to her medical providers through HIP
is of critical importance to the jury's determination of
Court of Appeals accepted jurisdiction and affirmed.
Patchett v. Lee, 46 N.E.3d 476 (Ind.Ct.App. 2015).
The court concluded Stanley was limited to
"evidence of 'discounted amounts' arrived at as
the result of negotiation between the provider and an
insurer". Id. at 487. Because the reduced HIP
amounts "were not calculated based upon market
negotiation", the court held they are "not
probative of reasonable value" and were properly
excluded. Id. Patchett then sought transfer, arguing
the courts below erred in finding Stanley v. Walker
inapplicable to HIP discounts. We grant transfer, thus
vacating the Court of Appeals opinion, and reverse.