Medical expenses are a common component of damages in a products liability case. Severe injuries caused by dangerous products often require prolonged care, including multiple surgeries and burn treatment.
Medical expenses are recoverable as damages, but they are not awarded automatically. Injury victims must typically prove that necessary medical expenses are reasonable. A medical billing review expert is in the best position to offer evidence that will satisfy that standard.
Defense lawyers often challenge the award of medical expenses on the ground that billings are inflated or unreasonable. Expert testimony based on a medical billing review provides defense counsel with evidence to support that challenge.
Products Liability Damages
Most products liability lawsuits involve personal injuries. Whether the case is based on a theory of negligence or strict liability, compensatory damages are available to plaintiffs who were injured by a defective or poorly designed product.
Damages typically include past and future medical expenses, lost wages and loss of earning capacity, and the cost of coping with a disability. In addition to those economic losses, state law generally allows damages to be awarded for pain and suffering, including emotional distress that arises from a physical injury.
When lawyers settle cases, they are typically guided by medical expenses and lost wages. Lawyers might use a multiplier of economic losses as a starting point to assess the settlement value of pain and suffering.
Studies show that juries often do the same thing. While jury verdicts vary widely, scholars who have averaged personal injury verdicts over time have discovered a pattern. Juries are not instructed to base awards for pain and suffering on multiple medical expenses and lost wages, but verdicts for pain and suffering tend to increase as awards for economic damages increase.
Consequently, medical expenses have an impact on product liability verdicts in two ways. First, when injuries are serious and require extensive or expensive medical care, they can be a large component of the total verdict. Second, larger awards for medical expenses tend to drive larger awards for pain and suffering.
Medical Billing Reviews for Plaintiffs
Plaintiffs have an incentive to recover the full amount of their medical billings even if they did not pay those bills from their own pockets. Health insurance often pays a portion of medical billings. In many cases, doctors accept the health insurance payment as full payment, even if the health insurance payment is significantly less than the amount billed. Plaintiffs typically rely on the collateral source rule to seek a verdict for the full amount billed even if they paid only a small part of the bill as an insurance deductible.
In most states, plaintiffs can only be compensated for reasonable medical expenses. Some states presume that any portion of the bill that was paid is reasonable. Other states do not follow that rule. In any event, significant portions of billed medical expenses are often unpaid. Proving the reasonableness of the full bill, whether or not it has been paid in full, is a key to obtaining a full award of medical expenses.
Whether a medical bill is reasonable depends on whether if reflects the usual and customary charges for services within the community. Reasonableness is a question of fact that must often be established through the testimony of an expert witness. A doctor’s personal opinion that his or her charges are reasonable rarely has a sound foundation. Unless doctors are aware of what other doctors in the community recharging, they cannot know whether their own charges are consistent with customary charges within that community.
Particularly when states follow some version of the Daubert rule, judges increasingly require reasonableness to be established by expert evidence that satisfies the Daubert standard. Medical billing experts are routinely allowed to testify that medical bills are or are not reasonable. They satisfy the Daubert standard by basing their opinions on adequate facts and a reliable methodology.
Medial billing experts compare the charges in a medical bill to the charges that are customary within the relevant geographic area. They determine customary charges by consulting databases that gather actual billing data for the same charges within the same zip code (or a set of related zip codes). Databases provide billing experts with reliable data upon which to base opinions.
Medical billing experts understand that some physicians charge more than others, usually because of their superior credentials or experience. Billing experts also know that some procedures are more complex than others. They take note of billing codes to determine the complexity of procedures.
After considering all facts, medical billing experts make a reliable assessment of whether billings fall within a range of reasonable charges. That analysis leads to testimony that plaintiffs can use to prove the reasonable charges that juries should award. Juries, in turn, typically consider reasonable medical expense when they return a verdict for pain and suffering.
Medical Billing Reviews for Defendants
Defendants use medical billing experts to challenge the reasonableness of medical expenses. Medical billing experts help defendants in several ways.
First, medical billing experts make a line-by-line comparison of medical bills to medical records. If there is no evidence that billed treatment was ever provided, they conclude that the billing for that treatment was unreasonable.
Second, medical billing experts determine whether the Current Procedural Terminology (CPT) codes in the billing accurately describe the services and procedures that were rendered. Billing departments often use an incorrect CPT code that results in overbilling.
Third, medical billing experts look for common errors in the application of CPT codes. For example, billers may “unbundle” charges for multiple services or procedures that were provided at the same time by assigning a separate CPT code to each one. That practice results in overbilling when a different CPT code is intended to cover multiple procedures that are performed at the same time.
Finally, medical billing experts can help defendants understand whether billings are unreasonable because they are substantially higher than the usual and customary charges within the community where the services were provided. Expert testimony can help the defendant establish that charges are unreasonable and therefore not awardable as damages.