Victims of personal injuries can seek reimbursement of medical expenses from parties who are liable for their injuries. In typical cases, victims must prove liability with evidence that the defendant was negligent and that the negligence caused an injury. In most jurisdictions, injury victims who seek reimbursement for medical expenses incurred to treat the injury must also prove that the expenses were “reasonable and necessary.”
Under some circumstances, injury victims might make a claim against their own uninsured motorist coverage or Personal Injury Protection (“no fault”) insurance for payment of medical expenses that were caused by another driver. Proof of those claims may be affected by the language of the insurance policy or (in the case of “no fault” coverage) by a state statute. Contracts and statutes may limit liability for medical expenses.
In most negligence cases, however, reasonable and necessary medical expenses are recoverable as damages. The words “reasonable” and “necessary” refer to two different standards. While both standards must be satisfied, they are typically proved with different kinds of evidence.
Proof of Necessity
The liable party must reimburse the injury victim for services reflected in a medical billing if the services were medically necessary. Services are necessary when they are required to diagnose, treat, cure, or relieve an injury or a symptom of an injury for which the party is liable.
The necessity of billed services is usually established by the testimony of the treating healthcare providers. For example, when treatment is provided by a surgeon and by a chiropractor, the surgeon and chiropractor will each testify that they provided services to treat, cure, or alleviate symptoms of a health condition that was caused by the responsible party. While other witnesses may also testify about causation, treating providers are usually in the best position to explain why it was necessary to provide the services that are reflected in medical billings.
In some cases, courts allow a physician to testify that services provided by others were necessary. For example, a treating physician might testify that all the services reflected on a hospital bill, including nursing services and the administration of tests or medications, were necessary even if the physician did not personally provide all those services.
Defendants and their insurers sometimes contest medical necessity. They might do so by presenting evidence that the injury was not caused by the accident that is the subject of the lawsuit. Defendants might also call their own medical experts to challenge the necessity of treatment for a condition caused by the accident. A defense expert might testify that the victim’s physicians “overtreated” the condition by providing unnecessary services or that more conservative and less expensive treatment was the only necessary treatment.
Proof of Reasonableness
A charge for a medical service is reasonable when it reflects the usual and customary charge for that service within the same geographical area. The usual charge is the charge that the same physician charges other patients for the same service. The customary charge is the charge that other physicians of comparable experience and skill within the same community charge for the same service.
A customary charge is not necessarily the average charge for the same service within the community. Some providers charge higher fees because they have more experience or skill than average providers. When medical billing experts determine whether a charge is reasonable, they understand that a range of charges, not just the average charge, might be reasonable. On the other hand, when a physician with average training and experience is charging substantially more than the average fee charged by physicians in the same community for the same service, that physician’s charge might be unreasonable.
Whether the charges billed for necessary services are reasonable cannot usually be established by the testimony of a treating physicians. Although some courts admit a treating physician’s testimony to prove that the physician’s bills are reasonable, cross-examination often reveals that the physician has no knowledge of customary charges within the community for the same services.
In some states, a charge that has been paid is presumed to be reasonable. That rule is based on the belief that neither the victim nor the victim’s insurer would pay an unreasonable bill. Regardless of any presumption, the defendant is entitled to challenge the reasonableness of a medical billing.
In most states, the collateral source rule allows the victim to collect the unpaid portion of the bill even if the provider agreed to accept a lesser amount from an insurer as full payment of the bill. To the extent that total bill exceeds the portion that is paid — as is often the case when the bill was submitted to a health insurer for payment — the unpaid portion is not presumed to be reasonable. The injury victim will therefore need to prove the reasonableness of the unpaid portion.
Expert Opinions Regarding Reasonableness of Medical Bills
Medical billing experts help plaintiffs prove that their bills were reasonable. They base their opinions on methodologies that state and federal courts have repeatedly accepted. They apply those methodologies to the facts of the case and write comprehensive reports that support their opinions.
Medical billing experts compare the CPT billing codes on medical bills to the medical records to assure that the billed services were provided and that the code correctly reflects those services. That analysis helps plaintiffs’ attorneys avoid placing claims before the jury that the defense can easily attack.
Medical billing experts then compare the charges to billing data collected by reputable database companies to determine the fees other providers within the same community have charged for the same services. That comparison provides an objective basis for an opinion that the charges are customary. If the charges are higher than average, the expert will determine whether the charges fall within a reasonable range, given the physician’s experience.
Medical billing experts offer an objective, data-driven analysis of reasonableness that treating physicians are not positioned to provide. Because billing experts rely on solid data rather than anecdotal evidence, billing experts can withstand cross-examinations that undermines physicians who testify to their personal beliefs that they charged reasonable fees.