Subverting the Burden of Proof for Medical Expenses: Plaintiffs’ Reliance on Wisconsin Statutes § 908.03(6m)(bm)

WDC Journal Edition: Spring 2010
By: Kara M. Burgos, Moen Sheehan Meyer, Ltd.

The proper measure of damages for medical treatment rendered in a personal injury action is the reasonable value of medical treatment reasonably required by the injury.[i] The Wisconsin Supreme Court has explained that, "while the actual amount paid for medical services may reflect the reasonable value of the treatment rendered, the focus is on the reasonable value, not the actual charge. In other words, 'this is a recovery for their value and not for the expenditures actually made or obligations incurred.'"[ii] "The value of medical services made necessary by the tort can ordinarily be recovered although they have created no liability or expense to the injured person. . . ."[iii] Thus, the fact-finder determines the reasonable value of medical treatment rendered, which is not necessarily the amount actually paid or the amount billed for the treatment.[iv]

Further, as a rule of damages, "the collateral source rule denies a tortfeasor credit for payments or benefits conferred upon the plaintiff by any person other than the tortfeasor." [v] In other words, "[t]he tortfeasor who is legally responsible for causing injury is not relieved of his obligation to the victim simply because the victim had the foresight to arrange, or good fortune to receive, benefits from a collateral source for injuries and expenses."[vi]Accordingly, an award of damages cannot be limited to or reduced by a collateral source payment.[vii]

It is generally accepted that a plaintiff has the burden of establishing that the amount claimed for doctors, hospital, nurses and other medical expenses is the reasonable value of the services made necessary by the defendant's fault. The law in Wisconsin has been that a physician must establish necessity of the medical treatment furnished and the reasonableness of charges for that treatment.[viii] This is so because medical necessity and reasonableness of medical charges are beyond the ken of lay persons.[ix]

The Wisconsin legislature has altered some of these long-held principles by Wisconsin Act 2009 Act 28. How far did their change go? Passed in June, 2009, effective July 1, 2009, the following is a portion of the act as it relates to proof of medical expenses:

SECTION 3285gb. 908.03 (6m) (title) of the statutes is amended to read:

908.03 (6m) (title) HEALTH PATIENT HEALTH CARE PROVIDER RECORDS.

...

SECTION 3285gh. 908.03 (6m) (bm) of the statutes is created to read:

908.03 (6m) (bm) Presumption. Billing statements or invoices that are patient health care records are presumed to state the reasonable value of the health care services provided and the health care services provided are presumed to be reasonable and necessary to the care of the patient. Any party attempting to rebut the presumption of the reasonable value of the health care services provided may not present evidence of payments made or benefits conferred by collateral sources.

This applies to bills incurred after the effective date. The general rule is that an amendment to the statutes takes effect when it is enacted and will not be considered retroactive "'unless a contrary intention is expressly stated or necessarily implied.'"[x] In this case, it is clear, from a reading of the Act itself, that there was no express intention of applying the bill retroactively.

There is little legislative history available on the Act itself but it clearly mirrors several other jurisdictions.[xi] Some other jurisdictions have not codified but judicially recognize the presumption. All jurisdictions adopting this approach make the presumption rebuttable. Tennessee mandates defense counsel provides notice of the same prior to trial.[xii]

Is this a free for all for Plaintiffs' bar in meeting their burden of proof? Will plaintiff's lawyers use the bills, records as the only evidence needed to prove their client's case?[xiii] Not if defense counsel provides the trial court with good reason. There is a distinct difference in terminology between necessary treatment, and by way of extension expenses, and treatment that was necessitated by an accident. The former does not involve cause; the latter does. The statutory presumption relates to treatment being found necessary by one's proscribing provider - the presumption does not relate to the fundamental issue of whether or not the accident necessitated treatment. The burden of proving that element remains with plaintiff. This analysis is consistent with those jurisdictions which have similar statues. [xiv] However, there is also authority for the opposite interpretation.[xv] Wisconsin defense counsel needs to encourage trial courts not to overturn the long line of precedent involving causal connections between accident and injuries.

A plaintiff cannot use the presumption to prove that his injuries were causally related.[xvi] He cannot state that "I was injured. I treated. Here are my bills, they are reasonable and necessary." Missing from the equation is expert testimony relating the treatment to the accident. If that is proven, then the presumption allows a jury to consider the resulting expenses as reasonable and necessary. A defendant is still afforded an opportunity to rebut the presumption. How? By expert testimony from the defense.[xvii] The nature of an accident and its causal connection to an injury is a constant theme in defense practice.

How will trial courts address the issue of the presumption? Tennessee provides some guidance in that area. The following is a pattern jury instruction from Tennessee:

T.P.I.-CIVIL 14.12 Medical Bill Presumption

[In this case, some medical bills have been introduced in evidence. Because these bills do not exceed [a certain sum established by law], you shall presume these expenses were reasonable and necessary].

USE NOTE

This instruction should be used following T.P.I.-Civil 14.01 when the plaintiff has met the requirements of T.C.A. § 24-5-113. The statute creates "prima facie evidence" and a "prima facie presumption" of the necessity and reasonableness of medical bills not exceeding $4,000.00 paid or incurred for which a copy is attached as an exhibit to the complaint. The meaning of this statute is that absent contrary evidence presented by the defendant, the plaintiff is entitled to a finding of reasonableness and necessity, without providing other evidence to that effect. See generally Mathews v. Cumberland Chevrolet Co., 640 S.W.2d 582 (Tenn. App. 1982), apparently construing "prima facie evidence" in T.C.A. § 24-5-111 to shift the burden of both production and persuasion to the defendant.

Thus, this instruction should not be used if the defendant has introduced evidence contradicting either the reasonableness or necessity of the medical bills. While it is not clear from the statute, these instructions assume that the statute shifts only the burden of production. Therefore, if the defendant presents evidence to rebut the statutory presumption, then only T.P.I.-Civil 14.01, which leaves the burden of persuasion on the plaintiff, should be used.

It is likely defense counsel will encounter these issues in the upcoming year. Pay close attention to the date the services were rendered and bills invoiced. This ACT is not retroactive. The Courts will necessarily determine how far the presumption was meant to go.


[i] Koffman v. Leichtfuss, 2001 WI 111, ¶¶ 25, 27, 246 Wis. 2d 31, 630 N.W.2d 201.

[ii]Koffman, 2001 WI 111, ¶ 27 (quoting McLaughlin v. Chi., Milwaukee, St. Paul & Pacific R.R. Co.,31 Wis. 2d 378, 395, 143 N.W.2d 32 (quoting 22 Am .Jur. 2d Damages § 207 (1965))). Wis JI-Civil 1756 (2007) states that a plaintiff should be compensated for "the sum of money ... [that] has reasonably and necessarily been incurred from the date of the accident ... for the care and treatment of the injuries sustained by (plaintiff) as a result of the accident."

[iii] Koffman, 2001 WI 111, n. 6 (quoting Restatement (2d) Torts § 924, comment f).

[iv] Koffman, 2001 WI 111, ¶ 56 (quoting Thoreson v. Milwaukee & Suburban Transp. Co., 56 Wis. 2d 231, 245, 201 N.W.2d 745 (1972)).

[v] Lagerstrom v. Myrtle Werth Hospital, 2005 WI 124, ¶ 32, 285 Wis. 2d 1, 700 N.W.2d 201 (2005); see also Koffman, 2001 WI 111, ¶ 29 (citing Payne v. Bilco Co., 54 Wis. 2d 424, 433, 195 N.W.2d 641 (1972)) (The collateral source rule prevents any payments made on the plaintiff's behalf or gratuitous benefits received by the plaintiff from inuring to the benefit of a defendant-tortfeasor.).

[vi] Ellsworth v. Schelbrock, 2000 WI 63, ¶ 7 n. 7, 235 Wis. 2d 678, 611 N.W.2d 764.

[vii] 2 Dan B. Dobbs, The Law of Torts § 380, at 1058 (2001)(explaining the collateral source rule as follows:

In many cases, the injured plaintiff receives some compensation for injuries from sources that have nothing to do with the defendant. The plaintiff's own insurance, job benefits, or donations by friends may all operate to reduce the plaintiff's loss. The traditional rule is that compensation from "collateral sources" is none of the defendant's business and does not go to reduce the defendant's obligation to pay damages, either in negligence or in strict liability cases).

[viii] Lautenschlager v. Hamburg, 41 Wis. 2d 623, 630, 165 N.W.2d 129, 132 (1969).

[ix] See Netzel v. State Sand & Gravel Co., 51 Wis. 2d 1, 7, 186 N.W.2d 258, 262 (1971) (holding that expert testimony is required when matter not within realm of ordinary experience); Dean Medical Center, S.C. v. Frye, 149 Wis. 2d 727, 733, 439 N.W.2d 633, 635 (Ct. .App.,1989).

[x] Dallmann v. Dallmann, 159 Wis. 480, 486, 149 N.W. 137 (1915) (emphasis added).

[xi] See Miss. Code Ann. § 41-9-119:

Evidence of necessity and reasonableness. Proof that medical, hospital, and doctor bills were paid or incurred because of any illness, disease, or injury shall be prima facie evidence that such bills so paid or incurred were necessary and reasonable;

Ohio Revised Code § 2317.421:

Admissibility of medical or funeral bills as prima-facie evidence of reasonableness. In an action for damages arising from personal injury or wrongful death, a written bill or statement, or any relevant portion thereof, itemized by date, type of service rendered, and charge, shall, if otherwise admissible, be prima-facie evidence of the reasonableness of any charges and fees stated therein for medication and prosthetic devices furnished, or medical, dental, hospital, and funeral services rendered by the person, firm, or corporation issuing such bill or statement, provided, that such bill or statement shall be prima-facie evidence of reasonableness only if the party offering it delivers a copy of it, or the relevant portion thereof, to the attorney of record for each adverse party not less than five days before trial;

Tennessee Code Annotated § 24-5-113:

Bills; health care and treatment. . . . (a)(1)Proof in any civil action that medical, hospital or doctor bills were paid or incurred because of any illness, disease, or injury may be itemized in the complaint or civil warrant with a copy of bills paid or incurred attached as an exhibit to the complaint or civil warrant. The bills itemized and attached as an exhibit shall be prima facie evidence that the bills so paid or incurred were necessary and reasonable.

(2) This section shall apply only in personal injury actions brought in any court by injured parties against the persons responsible for causing such injuries.

(3) This prima facie presumption shall apply to the medical, hospital and doctor bills itemized with copies of bills attached to the complaint or civil warrant; provided, that the total amount of such bills does not exceed the sum of four thousand dollars ($4,000).

(b)(1) In addition to the procedure described in subsection (a), in any civil action for personal injury brought by an injured party against the person or persons alleged to be responsible for causing the injury, if an itemization of or copies of the medical, hospital or doctor bills which were paid or incurred because of such personal injury are served upon the other parties at least ninety (90) days prior to the date set for trial, there shall be a rebuttable presumption that such medical, hospital or doctor bills are reasonable. . . .;

Va. Code Ann. § 8.01-413.01:

Authenticity and reasonableness of medical bills; presumption. A. In any action for personal injuries, wrongful death, or for medical expense benefits payable under a motor vehicle insurance policy issued pursuant to § 38.2-124 or § 38.2-2201, the 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 the trial.

[xii] Tennessee Code Annotated § 24-5-113:

Bills; health care and treatment

...

(2) Any party desiring to offer evidence at trial to rebut the presumption shall serve upon the other parties, at least forty-five (45) days prior to the date set for trial, a statement of that party's intention to rebut the presumption. Such statement shall specify which bill or bills the party believes to be unreasonable.

[xiii] Plaintiffs bar courted legislators' approval of the bill as merely a codification of Hanson. In Hanson v. American Family, 2006 WI 97, ¶ 25, 294 Wis. 2d 149, 716 N.W.2d 866, the Wisconsin Supreme Court reiterated the rule for awarding damages for injuries aggravated by subsequent medical malpractice or mistake. This rule was first established more than one hundred years ago in Selleck v. City of Janesville, 100 Wis. 157, 164, 75 N.W. 975 (1898), and has been followed since. See Fouse v. Persons, 80 Wis.2d 390, 397, 259 N.W.2d 92 (1977). As the Hanson court explained: "The Selleck rule has been a part of Wisconsin case law since 1898. This rule essentially states that when a tortfeasor causes an injury to another person who then undergoes unnecessary medical treatment of those injuries despite having exercised ordinary care in selecting her doctor, the tortfeasor is responsible for all of that person's damages arising from any mistaken or unnecessary surgery."

[xiv] See Lindsey v. Miami Dev. Corp., 689 S.W.2d 856 (Tenn. 1985) (Itemizing and attaching bills under T.C.A. § 24-5-113 constitutes prima facie evidence that the charges were necessary and reasonable. However, a plaintiff must also establish that the charges were incurred as a result of the defendant's negligent conduct.)

[xv] Before the enactment of Section 41-9-119, the common law was that medical expenses, where claimed as an element of damage, required proof connecting the bills for such medical expenses with the injury or disease sued on, together with proof that the charges for the medical expenses claimed were reasonable. Bryan Bros. Packing Co. v. Grubbs, 251 Miss. 252, 168 So.2d 289 (1964). The purpose of the statute was to simplify the procedure for proving medical expenses where claimed as an element of damages. It permits a party to introduce bills for medical expenses which have been paid or incurred, upon the testimony of the party that the bills were incurred or paid because of the illness, disease or injury sued on and makes the bills prima facie evidence that the treatment was necessary and the charges therefor were reasonable.

[xvi] In an unpublished opinion, the Second District Court of Appeals seemed receptive to this argument; it was also decided after the passage of the Act. " We conclude the circuit court erred by expanding Hanson to relieve a plaintiff from proving causation when "some" injury is conceded.Although Hanson requires a tortfeasor to pay for unnecessary or negligent treatment if reasonable care is used in selecting medical providers, Hanson did not expand the Selleck rule to eliminate the requirement that claimed past medical expenses be related to the accident." Hach v. American Family Mut. Ins. Co., 2010 WI App 19, __ Wis. 2d __, __ N.W.2d __ (unpublished).

[xvii] McCay v. Jones, 354 So.2d 1095, 1100-1102 (Miss. 1978) ("However, the statute does not cut off the right of a defendant to controvert the presumption established by introduction of such bills."); see also Wright v. Smith, 641 F. Supp. 2d 536, 540-541 (D.Va., 2009) ("Thus, the McMunn court held that where a defendant objects to the introduction of medical bills, indicating that the defendant's evidence will raise a substantial contest as to either the question of medical necessity or the question of causal relationship, the court may admit the challenged medical bills only with foundation expert testimony tending to establish medical necessity or causal relationship, or both, as appropriate.") (citing McMunn v. Tatum, 379 S.E.2d 908, 914 (Va. 1989)).

[1] Koffman v. Leichtfuss, 2001 WI 111, ¶¶ 25, 27, 246 Wis. 2d 31, 630 N.W.2d 201.

[1]Koffman, 2001 WI 111, ¶ 27 (quoting McLaughlin v. Chi., Milwaukee, St. Paul & Pacific R.R. Co.,31 Wis. 2d 378, 395, 143 N.W.2d 32 (quoting 22 Am .Jur. 2d Damages § 207 (1965))). Wis JI-Civil 1756 (2007) states that a plaintiff should be compensated for "the sum of money ... [that] has reasonably and necessarily been incurred from the date of the accident ... for the care and treatment of the injuries sustained by (plaintiff) as a result of the accident."

[1] Koffman, 2001 WI 111, n. 6 (quoting Restatement (2d) Torts § 924, comment f).

[1] Koffman, 2001 WI 111, ¶ 56 (quoting Thoreson v. Milwaukee & Suburban Transp. Co., 56 Wis. 2d 231, 245, 201 N.W.2d 745 (1972)).

[1] Lagerstrom v. Myrtle Werth Hospital, 2005 WI 124, ¶ 32, 285 Wis. 2d 1, 700 N.W.2d 201 (2005); see also Koffman, 2001 WI 111, ¶ 29 (citing Payne v. Bilco Co., 54 Wis. 2d 424, 433, 195 N.W.2d 641 (1972)) (The collateral source rule prevents any payments made on the plaintiff's behalf or gratuitous benefits received by the plaintiff from inuring to the benefit of a defendant-tortfeasor.).

[1] Ellsworth v. Schelbrock, 2000 WI 63, ¶ 7 n. 7, 235 Wis. 2d 678, 611 N.W.2d 764.

[1] 2 Dan B. Dobbs, The Law of Torts § 380, at 1058 (2001)(explaining the collateral source rule as follows:

In many cases, the injured plaintiff receives some compensation for injuries from sources that have nothing to do with the defendant. The plaintiff's own insurance, job benefits, or donations by friends may all operate to reduce the plaintiff's loss. The traditional rule is that compensation from "collateral sources" is none of the defendant's business and does not go to reduce the defendant's obligation to pay damages, either in negligence or in strict liability cases).

[1] Lautenschlager v. Hamburg, 41 Wis. 2d 623, 630, 165 N.W.2d 129, 132 (1969).

[1] See Netzel v. State Sand & Gravel Co., 51 Wis. 2d 1, 7, 186 N.W.2d 258, 262 (1971) (holding that expert testimony is required when matter not within realm of ordinary experience); Dean Medical Center, S.C. v. Frye, 149 Wis. 2d 727, 733, 439 N.W.2d 633, 635 (Ct. .App.,1989).

[1] Dallmann v. Dallmann, 159 Wis. 480, 486, 149 N.W. 137 (1915) (emphasis added).

[1] See Miss. Code Ann. § 41-9-119:

Evidence of necessity and reasonableness. Proof that medical, hospital, and doctor bills were paid or incurred because of any illness, disease, or injury shall be prima facie evidence that such bills so paid or incurred were necessary and reasonable;

Ohio Revised Code § 2317.421:

Admissibility of medical or funeral bills as prima-facie evidence of reasonableness. In an action for damages arising from personal injury or wrongful death, a written bill or statement, or any relevant portion thereof, itemized by date, type of service rendered, and charge, shall, if otherwise admissible, be prima-facie evidence of the reasonableness of any charges and fees stated therein for medication and prosthetic devices furnished, or medical, dental, hospital, and funeral services rendered by the person, firm, or corporation issuing such bill or statement, provided, that such bill or statement shall be prima-facie evidence of reasonableness only if the party offering it delivers a copy of it, or the relevant portion thereof, to the attorney of record for each adverse party not less than five days before trial;

Tennessee Code Annotated § 24-5-113:

Bills; health care and treatment. . . . (a)(1)Proof in any civil action that medical, hospital or doctor bills were paid or incurred because of any illness, disease, or injury may be itemized in the complaint or civil warrant with a copy of bills paid or incurred attached as an exhibit to the complaint or civil warrant. The bills itemized and attached as an exhibit shall be prima facie evidence that the bills so paid or incurred were necessary and reasonable.

(2) This section shall apply only in personal injury actions brought in any court by injured parties against the persons responsible for causing such injuries.

(3) This prima facie presumption shall apply to the medical, hospital and doctor bills itemized with copies of bills attached to the complaint or civil warrant; provided, that the total amount of such bills does not exceed the sum of four thousand dollars ($4,000).

(b)(1) In addition to the procedure described in subsection (a), in any civil action for personal injury brought by an injured party against the person or persons alleged to be responsible for causing the injury, if an itemization of or copies of the medical, hospital or doctor bills which were paid or incurred because of such personal injury are served upon the other parties at least ninety (90) days prior to the date set for trial, there shall be a rebuttable presumption that such medical, hospital or doctor bills are reasonable. . . .;

Va. Code Ann. § 8.01-413.01:

Authenticity and reasonableness of medical bills; presumption. A. In any action for personal injuries, wrongful death, or for medical expense benefits payable under a motor vehicle insurance policy issued pursuant to § 38.2-124 or § 38.2-2201, the 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 the trial.

[1] Tennessee Code Annotated § 24-5-113:

Bills; health care and treatment

...

(2) Any party desiring to offer evidence at trial to rebut the presumption shall serve upon the other parties, at least forty-five (45) days prior to the date set for trial, a statement of that party's intention to rebut the presumption. Such statement shall specify which bill or bills the party believes to be unreasonable.

[1] Plaintiffs bar courted legislators' approval of the bill as merely a codification of Hanson. In Hanson v. American Family, 2006 WI 97, ¶ 25, 294 Wis. 2d 149, 716 N.W.2d 866, the Wisconsin Supreme Court reiterated the rule for awarding damages for injuries aggravated by subsequent medical malpractice or mistake. This rule was first established more than one hundred years ago in Selleck v. City of Janesville,100 Wis. 157, 164, 75 N.W. 975 (1898), and has been followed since. See Fouse v. Persons, 80 Wis.2d 390, 397, 259 N.W.2d 92 (1977). As the Hanson court explained: "The Selleck rule has been a part of Wisconsin case law since 1898. This rule essentially states that when a tortfeasor causes an injury to another person who then undergoes unnecessary medical treatment of those injuries despite having exercised ordinary care in selecting her doctor, the tortfeasor is responsible for all of that person's damages arising from any mistaken or unnecessary surgery."

[1] See Lindsey v. Miami Dev. Corp., 689 S.W.2d 856 (Tenn. 1985) (Itemizing and attaching bills under T.C.A. § 24-5-113 constitutes prima facie evidence that the charges were necessary and reasonable. However, a plaintiff must also establish that the charges were incurred as a result of the defendant's negligent conduct.)

[1] Before the enactment of Section 41-9-119, the common law was that medical expenses, where claimed as an element of damage, required proof connecting the bills for such medical expenses with the injury or disease sued on, together with proof that the charges for the medical expenses claimed were reasonable. Bryan Bros. Packing Co. v. Grubbs, 251 Miss. 252, 168 So.2d 289 (1964). The purpose of the statute was to simplify the procedure for proving medical expenses where claimed as an element of damages. It permits a party to introduce bills for medical expenses which have been paid or incurred, upon the testimony of the party that the bills were incurred or paid because of the illness, disease or injury sued on and makes the bills prima facie evidence that the treatment was necessary and the charges therefor were reasonable.

[1] In an unpublished opinion, the Second District Court of Appeals seemed receptive to this argument; it was also decided after the passage of the Act. " We conclude the circuit court erred by expanding Hanson to relieve a plaintiff from proving causation when "some" injury is conceded. Although Hansonrequires a tortfeasor to pay for unnecessary or negligent treatment if reasonable care is used in selecting medical providers, Hanson did not expand the Selleck rule to eliminate the requirement that claimed past medical expenses be related to the accident." Hach v. American Family Mut. Ins. Co., 2010 WI App 19, __ Wis. 2d __, __ N.W.2d __ (unpublished).

[1] McCay v. Jones, 354 So.2d 1095, 1100-1102 (Miss. 1978) ("However, the statute does not cut off the right of a defendant to controvert the presumption established by introduction of such bills."); see also Wright v. Smith, 641 F. Supp. 2d 536, 540-541 (D.Va., 2009) ("Thus, the McMunn court held that where a defendant objects to the introduction of medical bills, indicating that the defendant's evidence will raise a substantial contest as to either the question of medical necessity or the question of causal relationship, the court may admit the challenged medical bills only with foundation expert testimony tending to establish medical necessity or causal relationship, or both, as appropriate.") (citing McMunn v. Tatum, 379 S.E.2d 908, 914 (Va. 1989)).