How Can Medical Billing Experts Have an Impact on Claims for Pain and Suffering?

In personal injury litigation, medical bills are categorized as special damages. They are specific measurable out-of-pocket losses that result from a defendant’s conduct.  Awards of compensation for pain, suffering, and emotional distress are categorized as general damages. They flow naturally from a personal injury but cannot be measured by any objective yardstick.

Plaintiffs need to prove special damages with precision. Typical jury instructions require juries to find that special damages have been established to a reasonable certainty.

General damages, on the other hand, can be inferred from the fact of a physical injury. Juries are entitled to award any amount for general damages, provided that the court regards the award as reasonable.

Given the different nature of special and general damages, it would appear at first blush that the testimony of medical billing experts is relevant only to claims for special damages. When plaintiffs seek to recover medical expenses or when defendants challenge that recovery, medical billing experts often play an important role as trial witnesses.

While medical billing experts cannot offer testimony that will help a jury evaluate pain and suffering, experienced lawyers understand that there is an informal relationship between special damages and general damages. During settlement discussions and at trial, expert opinions regarding medical billings can have an indirect but important impact on the value that lawyers and jurors assign to pain and suffering.

Every case is different. It is possible for a plaintiff to experience extreme long-term pain and suffering even when doctors can do little — and thus charge little — to cure the condition. It is equally possible for a plaintiff to incur substantial medical expenses for an injury that is only mildly troubling.

While each case must be evaluated on its own merits, lawyers generally find that there is a relationship between special and general damages. As a general rule, when special damages are higher, juries award larger verdicts for general damages.

A 2017 study concluded that damages for pain and suffering “highly correlate with the plaintiff’s medical expenses.” The study found that the “strong correlation between economic damages and non-economic damages persists in a large U.S. dataset of judge and jury trials.” In other words, empirical evidence supports the real-world experience of lawyers who believe that juries use special damages as a yardstick that helps them measure awards of general damages.

Understanding the relationship between special damages and the value of a pain and suffering claim, lawyers and insurance adjusters often rely on “multipliers” to place a value on pain and suffering. In simple terms, each side will multiply special damages by a certain number — typically ranging from 2 to 5 — to estimate the value of pain and suffering.

Lawyers and insurance adjusters often disagree about the appropriate multiplier to use in a particular case. When an injury is likely to take years to heal, the multiplier might be closer to 5. When an injury heals promptly and causes minimal inconvenience, the multiplier might be closer to 2. Of course, multipliers below 2 or above 5 might also be appropriate when special damages seem unusually large or small, given the nature and extent of the injury.

Multipliers can be a useful settlement tool, but they are not a tool that juries can use. The judge will not instruct the jury to base an award for pain and suffering on a multiplier. Courts in most jurisdictions regard it as improper for lawyers to rely on multipliers in closing arguments.

Still, given the correlation between special damages and jury verdicts for general damages, there is reason to believe that juries rely on multipliers, even if they do not do so consciously. It would not be unusual for a jury to say, “We gave the plaintiff $20,000 for medical expenses and wage loss, let’s award another $60,000 for pain and suffering.” The verdict may reflect a multiplier even if juries don’t expressly use multipliers to calculate damages.

In most jurisdictions, juries are not told whether an insurance company has paid certain medical expenses. On the other hand, the jury might not be allowed to hear evidence of the total medical bill unless it is supported by expert testimony that the bill is reasonable.

In most jurisdictions, plaintiffs can only recover reasonable medical expenses. Some jurisdictions permit a presumption that medical bills are reasonable if they have been paid, but the defense is entitled to present expert evidence that the charges are unreasonable. And since medical bills are rarely paid in full, proving the reasonableness of the full bill is necessary to a plaintiff’s full recovery.

Medical billing experts offer opinions that can prove or challenge the reasonableness of medical expenses. That testimony can be critical to both the plaintiff and to the defendant in a personal injury case.

Suppose a plaintiff seeks special damages of $90,000, consisting of a $30,000 wage loss and medical bills of $60,000. If the plaintiff and defense both believe that a multiplier of 3 would reflect the settlement value of the pain and suffering claim, the plaintiff will expect a settlement of $360,000 — special damages of $90,000 plus special damages times 3. 

However, suppose insurance paid only $36,000 of the medical bills, leaving $24,000 unpaid. If the plaintiff cannot prove that the full $60,000 bill was reasonable, the case will probably settle for $54,000 in special damages (wage loss and $24,000 in medical expenses) plus 3 times that amount, or a total of $216,000. By not using a medical billing expert to establish that the full $60,000 medical bill is reasonable, the plaintiff will be leaving $144,000 on the table.

Suppose instead that the defendant does not agree that the full $60,000 medical bill is reasonable and asks a medical billing expert to review it. If the billing expert determines that a reasonable charge for the billed services would be $42,000, the defendant would not want to pay more than $288,000 — $72,000 for the wage loss and reasonable medical bills plus three times that amount.

Settlement values and verdicts for pain and suffering are indirectly dependent on the reasonable medical expenses that a plaintiff is likely to recover. Both the plaintiff and the defendant can use a medical billing expert to change the settlement value or the likely verdict for pain and suffering by calculating the reasonable amount of medical expenses.