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Proving the Value of Present and Future Medical Bills
Under Howell and Corenbaum:
How to Establish "Negotiated Rate Differentials" in
Medicare, Kaiser and Other Lien Cases
STARTING PREMISE
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Corenbaum v. Lampkin (2013) 215 Cal. App. 4th 1308, 1325-1326.
“Damages for past medical expenses are limited to the lesser of (1) the amount paid or incurred for past medical expenses and (2) the reasonable value of the services.”
WHO ARE WE? WHY ARE WE INTERESTED IN THIS TOPIC
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• Tami Rockholt, RN, BSN (Rockholt & Associates)
• Seana B. Thomas, Esq. (Law Office of Seana B. Thomas)
• David Rosenbaum (McDowall Cotter, APC)
WHERE TO LOOK FOR SOURCES
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Case Law Statutes
PERTINENT CASES
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• Howell v. Hamilton Meats & Provisions (2011) 52 Cal. 4th 541
• Corenbaum v. Lampkin (2013) 215 Cal. App. 4th 1308
• State Farm Mutual Automobile Ins. Co. v. Huff (2013) 216 Cal. App. 4th 1463 (a Hospital Lien, hospital’s “bill itself was based on the District's standard charges and thus “is not an accurate measure of the value of medical services.”)
PERTINENT CASES
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• Luttrell v. Island Pacific Supermarkets, Inc. (2013) 215 Cal. App. 4th 196, 206 (Howell applies to Medicare and Medi-Cal payments)
• Dodd v. Cruz (2014) Cal. App. LEXIS 118 (Discovery permissible if reasonably calculated to lead to the discovery of admissible evidence relating to the amount of medical expenses Dodd actually incurred)
• In Re Avandia Marketing, 2011 U.S. Dist. LEXIS 63544, (E.D. Penn. 2012) (Medicare Advantage plans have same rights as Medicare)
PERTINENT LIEN STATUTES
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• MEDICARE: 42 USC 1395 Y (B)2; 42 C.F.R. 411.20, Et. Seq
• HMO’S: Civil Code Section 3040 • WORKERS Compensation: Cal. Labor
Code Sec. 3852-3862 • HOSPITALS: Cal. Civil Code Sections
3045.1-3045.6 • MEDI-CAL: Welfare & Instit. Code Sec.
14124.71-.791
“REASONABLE VALUE”
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An Expert’s World
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EXPERT OPINION
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A qualified expert may opine on the reasonable value of medical services based on matter, “whether or not admissible, that is of a type that reasonably may be relied upon. (Evid. Code, § 801, subd. (b).)”
Dodd v. Cruz, 2014 Cal. App. LEXIS 118 (Cal. App. 2d Dist. Feb. 5, 2014).
CHARGEMASTER
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HCPCS CODES
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• Level I – CPT codes from the AMA • Level II – Non-physician services,
like ambulance, DME, prosthetics, injections
• Level III –Local codes, obsolete
CPT VS. ICD-9/10 CODES
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• What is a CPT code? • CPT modifier • CPT for Out patient care
• What is ICD-9 (ICD-10)?
• How do they Compare?
IMPORTANT REFERENCES
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201X HCPCS Level II 201X CPT – Professional Edition 201X ICD-9-CM
“USUAL AND CUSTOMARY”
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• Context4 Healthcare Usual: Customary & Reasonable Fee database
• How does “Usual and Customary” compare to “Reasonable Value”
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Howell Application Part C & D
Medicare Pricing
HOWELL’S APPLICATION
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Because Luttrell's liability to medical providers for their past medical services is limited to the amounts Medicare and Medi-Cal actually paid, Luttrell's recovery from Island Pacific for past medical services must be limited to those amounts actually paid.
Luttrell v. Island Pacific Supermarkets, Inc. (2013) 215 Cal. App. 4th 196, 206.
A, B, C, D’S OF MEDICARE
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Part A • Inpatient
Hospital, Hospice, Home Health and Skilled Nursing Facility (SNF)
Part B • MD’s • Misc Med Care
Part C • Medicare+Choice • Medicare
Advantage • Medi-gap • “MAO”s
Part D • Rx Meds
MEDICARE PART “C” & “D”
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• Paid by Medicare to provide benefits • Avandia: Howell impact • Same Pricing restrictions as
Medicare • Discovery:
• Obtain copies of front and back of health insurance cards.
• CMS Declaration • Reimbursement to Plan
MEDICARE PRICING
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• Databases that utilize Medicare pricing as starting point
• PFFS.com - Inexpensive source for physician Medicare pricing
• Medicare PCPRICER - Downloadable pricing program for Medicare hospital stays
• http://www.cms.gov/Medicare/Medicare-Fee-for-Service Payment/PCPricer/inpatient.html
• Acronyms Appearing in Federal Register (handout)
TREATMENT PROVIDED ON A LIEN BASIS
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Recent increase in plaintiffs’ counsel sending INSURED
patients to lien providers to avoid Howell limitation. How to respond?
GOAL
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DEFENSE TO PRESENT EVIDENCE IN CASE-IN-CHIEF THAT PLAINTIFF HAD HEALTH INSURANCE BUT DID NOT USE IT
RATIONALE:
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Failure to Mitigate Damages • the collateral source rule should not be
employed to preclude the defense from putting on this key evidence - (see CACI 3930; Pool v. City of Oakland
(1986) 42 C.3d 1051, 1066, holding, “The rule of [mitigation of damages] comes into play after a legal wrong has occurred, but while some damages may still be averted”.)
HOWELL & THE “I” WORD
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• Howell does not prohibit any mention of insurance
- NB: risk of mistrial if prejudice outweighs value of evidence. (See Howell, headnote 5, citing Evidence Code Section 352)
HOWELL & THE “I” WORD
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• Argument: • grave prejudice by any ruling
depriving defense of the right to put on evidence of failure to mitigate damages during its case in chief;
• post-trial evidence on this issue to reduce special damage awards is insufficient
HOWELL & THE “I” WORD
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• Motion in Limine Positions: • Collateral source rule should not
prevail over defense right to put on affirmative defense of mitigation of damages.
• Plaintiff opened the door. • Plaintiff’s conduct was unreasonable
HOWELL & THE “I” WORD
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• Post Trial • Be prepared to make motion for new
trial on the grounds of excessive damages (see Howell).
• Appeal
GATHERING EVIDENCE
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GOAL OF DISCOVERY TO SET UP MOTIONS IN LIMINE • Form Interrogatory 4.1:
- “was there in effect any insurance which you were or might be covered for example…medical expense coverage.”
• RFP: insurance policy, health insurance card
• RFA: that you had health insurance to cover
GATHERING EVIDENCE
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• Subpoena: Health Insurer for policy • Depositions: Plaintiff and of Lien based
Provider - Use Medical Billing Expert to Prepare
• analysis of the reimbursement schedule for plaintiff’s insurance plan for the care provided
• can prepare a UCR analysis
- Ask whether the lien provider accepts whatever kind of insurance the plaintiff had which was not used (they almost always do)
GATHERING EVIDENCE
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• MEET AND CONFER • MOVE TO COMPEL • Dodd v. Cruz (2014) Cal. App. LEXIS 118
KAISER’S CONSOLIDATED STATEMENT
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Is it incurred? Does is demonstrate a “Reasonable
Value?”
“It is well known that Kaiser is an HMO “providing medical services to its members rather than a medical service provider with a conventional creditor-debtor relationship to its patients.”
In re Eric S. (2010) 183 Cal. App. 4th 1560, 1565.
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Kaiser is a CAPITATED PLAN
Apart from the described records, however, the present record is entirely silent on this subject. We are therefore left with the uncontested recital in the quoted document that the victim was “billed” for the stated amount.
In re K.F. (2009)173 Cal. App. 4th 655, 663-664
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The other document challenged by appellant is an “Explanation of Benefits” from Kaiser, apparently reflecting the value of ambulance service provided. It lists $ 582.32 in “Ambulance Charges.” It also describes this sum as the “amount charged.” But it bears the prominent legend, “This is not a bill”; it shows zeros in the column marked “Coinsurance/Copayment”; there is no entry in the column marked “Amount Paid”; and in the space marked “Your Obligation” appears the sum “0.00.”
In re K.F. (2009)173 Cal. App. 4th 655, 663-664 .
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KAISER HAS 3 ENTITIES
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Kaiser Permanente is an integrated managed care consortium. Kaiser Permanente is made up of three distinct groups of entities: 1. the Kaiser Foundation Health Plan and its
regional operating subsidiaries; 2. Kaiser Foundation Hospitals; and 3. the autonomous regional Permanente
Medical Groups.
HOW PROVIDERS ARE PAID
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KAISER PLAN LANGUAGE: “How Plan Providers are paid “Health Plan and Plan Providers are independent
contractors. Plan Providers are paid in a number of ways, such as salary, capitation, per diem rates, case rates, fee for service, and incentive payments.
“To learn more about how Plan Physicians are paid to
provide or arrange medical and hospital care for Members, please ask your Plan Physician or call our Member Service Contact Center.”
THE EXPERT ATTACK
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How to get to the lesser of paid v. reasonable value.
• Using CHARGEMASTER to compare • Reverse engineer from the chart notes • Review Healthcare Recoveries “bill” • Questions for Person Most Qualified
(PMQ) • California Charge Master website
(attachment)
THE DEFENSE ATTACK
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Motions in Limine • Preclude Introduction of Evidence
from Providers • Preclude Use of Kaiser Statement of
Services and Kaiser Consolidated Statement
THE MOTION
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Plaintiff’s Burden of Proof Statement is Hearsay • Where invoices or accountings received from
third parties are offered into evidence as proof of the transactions described, hearsay issues arise which may be resolved only by the testimony of a qualified witness.
Jazayeri v. Mao (2009) 174 Cal. App. 4th 301, 325
THE MOTION
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Statement is Hearsay • may be admitted for the limited purpose of
corroborating his testimony and if the charges were paid, the testimony and documents are evidence that the charges were reasonable.
Pacific Gas & E. Co. v. G. W. Thomas Drayage etc. Co. (1968) 69 Cal. 2d 33, 42-43.
THE DEFENSE ATTACK
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Furthermore, “the full amount billed by medical providers is not an accurate measure of the value of medical services” because “many patients … pay discounted rates,” and standard rates “for a given service can vary tremendously, sometimes by a factor of five or more, from hospital to hospital in California.”
State Farm Mutual Automobile Ins. Co. v. Huff (2013) 216 Cal. App. 4th 1463, 1471 (citing Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308 and Howell v. Hamilton Meats & Provisions (2011) 52 Cal. 4th 541).
THE DEFENSE ATTACK
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Cannot demonstrate amount was incurred: In re K.F. (2009)173 Cal. App. 4th 655, 663-664.
Cannot demonstrate Statement Reflects amount paid to providers:
• Use plan documents • Take depositions
THE DEFENSE ATTACK
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Assertion of Lien does not equal incurred amount
Lien language of plan refers to Civil Code 3040
3040 has complex formula, the amount stated will be misleading to the jury
THE DEFENSE ATTACK
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Violation of Collateral Source Rule “the evidentiary aspect of the collateral source rule makes any evidence of a collateral source payment inadmissible for the purpose of determining the amount of damages. This precludes evidence that an insurer, or another source independent of the tortfeasor, paid for the plaintiff's medical care, but does not preclude evidence of the amount that a medical provider, pursuant to prior agreement, accepted as full payment.”
Corenbaum v. Lampkin (2013) 215 Cal. App. 4th 1308, 1327.
THE DEFENSE ATTACK
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DISCOVERY (use criminal restitution cases as guide)
• Form Rog 4.1 • RFP: plan documents • Depo: PMQ at Kaiser Facility • Depo: Treating docs – no knowledge
of billing • Expert:
• Use Billing expert
THE DEFENSE ATTACK
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DISCOVERY (use criminal restitution cases as guide)
• Expert: • Use Billing expert • If Plaintiff does not disclose, your
motion is to preclude the entire set of charges.
ONE LAST THOUGHT
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With the Affordable Care Act, everyone must have health
insurance.
Proving the Value of Present and Future Medical Bills
Under Howell and Corenbaum :
QUESTIONS? THANK YOU!
