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Ohio Appeals Court Says Jury Award Improperly Reduced By Medicare Payments


HLD, v. 34, n. 1 (January 2006)

Ohio Appeals Court Says Jury Award Improperly Reduced By Medicare Payments


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 contravened Ohio's 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 by $74,058.59.


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 established Ohio law, which prohibits the introduction of evidence of benefits from collateral sources.


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



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