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Patchett v. Lee

Supreme Court of Indiana

October 21, 2016

Mary K. Patchett, Appellant (Defendant Below),
v.
Ashley N. Lee, Appellee (Plaintiff Below).

         Interlocutory Appeal from the Hamilton Superior Court 1, No. 29D01-1305-CT-004116 The Honorable Steven R. Nation, Judge

         On Petition to Transfer from the Indiana Court of Appeals, No. 29A04-1501-CT-00001

          Attorneys for Appellant Karl Mulvaney Jessica Whelan Bingham Greenebaum Doll LLP Indianapolis, Indiana Robert F. Ahlgrim, Jr. State Farm Mutual Automobile Insurance Company Indianapolis, Indiana

          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, Indiana

          Attorney for Amicus Curiae American Tort Reform Association Bradley J. Buchheit Tucker Hester Baker & Krebs, LLC Indianapolis, Indiana

          Attorneys for Amicus Curiae Indiana Legal Foundation Mary Nold Larimore Jenny R. Buchheit Derek R Molter Ice Mller LLP Indianapolis, Indiana

          Attorneys for Appellee Daniel G. Foote Tabor Law Firm, LLP Indianapolis, Indiana

          Attorneys for Amicus Curiae Indiana Trial Lawyer Association Joseph N. Williams Riley Williams & Piatt, LLC Indianapolis, Indiana

          Slaughter, Justice.

         In 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.

         Factual and Procedural Background

         Mary 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.

         The 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.

         Lee 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 damages."

         The 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.

         Standard ...


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