Court Says Jury Award Improperly Reduced By
A trial court improperly reduced a plaintiff's award in a
professional negligence case by the written-off portions of Medicare-paid
services, an Ohio
appeals court ruled November 9. According to the appeals court, the reduction
collateral source rule.
Plaintiff Mattie Ferrell originally filed a professional
negligence claim against defendants Summa Health System (Summa) and Dr. Michael
Cullado in January 2003. Before trial, defendants
sought to exclude from evidence the amounts of Ferrell's medical bills that had
been written off by her medical providers. The trial court decided not to move
on defendants' motion but took it under advisement in the event that a verdict
was awarded to Ferrell.
The jury rendered a verdict against Summa for $267,779.28, of
which $117,779.28 was awarded to compensate Ferrell for medical and hospital
bills. Summa renewed its motion in limine and filed a motion for set-off,
asking the lower court to reduce the jury verdict by the amount of the written-off
medical expenses. The judge granted Summa's motion and reduced the jury award
Ferrell appealed, claiming that the written-off portion of
the medical bills was a collateral benefit (a benefit received outside the
scope of litigation) and admitting evidence of such benefit violated
law, which prohibits the introduction of evidence of benefits from collateral
The Ohio Court of Appeals agreed with Ferrell and reversed
the trial court's judgment. In this case, Medicare paid for Ferrell's medical
care. On an issue of first impression, the appeals court held that written-off
portions of Medicare-paid services are subject to the collateral source rule. The
appeals court said that a "collateral benefit is a benefit received outside the
scope of the litigation." According to the appeals court, any benefit that Ferrell
received from Medicare was outside of the scope of the lawsuit, or collateral
to the litigation.
"Considering evidence of the portions of Appellant's medical
bills that were written-off and reducing the jury's verdict to cover only the
actual expenses is clearly impermissible," said the appeals court. "By doing
so, the trial court granted the tortfeasor the
benefit that Appellant received from a collateral source, which Ohio courts do not
allow," the appeals court concluded.
The dissent argued that it was necessary to determine the
proper measure of damages in a tort action before evaluating the impact of the
collateral source rule, which applies to prevent the actual damages sustained
from being reduced. It does not apply to prevent the introduction of evidence
as to the actual damages Ferrell sustained. Therefore, the dissenting judge found
that the lower court was correct in considering evidence of Ferrell's actual
damages and reducing the jury award to reflect that amount.
Ferrell v. Summa
Health Sys., No. 22527 (Ohio Ct. App. Nov. 9, 2005).
To read the case, go to http://www.sconet.state.oh.us/rod/newpdf/9/2005/2005-ohio-5944.pdf