What is Important About the Concepts of “Reasonableness and Necessity”?

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Medical Billing

In a personal injury case, the reason for paying damages to an injured plaintiff is to compensate them for losses caused by the responsible party: the defendant. Because of this, the law holds that the responsible wrongdoer is accountable for paying the necessary medical expenses that the injured party had to pay. Without the wrongdoer’s negligence or failure to act, the injured party would not have needed to receive treatment and recover from the incident.

However, the requirements for admitting medical bills into evidence for personal injury cases are often misunderstood, even by the attorneys who are representing the interests of their injured clients. The first step in admitting medical bills is authenticating them, and there are four ways this can happen: Stipulation, Testimony of Custodian Records, Affidavit from Provider’s Custodian of Records, or Lack of Objection during disclosure.

Medical Bill Coverage

To recover medical expenses, a plaintiff must provide evidence of what they paid for their medical treatment. Regardless of whether it was a car accident, a workplace injury, or a slip and fall, the treatment must be documented in order to be compensated.

This means that all medical billing must be accounted for, including but not limited to the bills for an ambulance ride, hospital stay, X-rays, lab tests, surgery, and anesthesia, follow up doctor’s appointments, prescriptions for pain medication, physical therapy, and nursing care as a result of treating the injury.

It is also a requirement to prove that all of the expenses were necessary for the course of treating an injury incurred by the defendant and reasonable in cost. An expert witness is required to give testimony to prove that medical treatment was necessary.

A plaintiff may also be required to produce medical billing evidence that the medical treatment received was a standard procedure and not an experimental one.  Also, they need to show that the treatment was both appropriate for the circumstance and not fraudulent so the bills can be admitted as evidence, and they can be considered by the judge or jury to help determine the defendant’s obligation to pay.

“Reasonable and necessary” are also terms frequently used in auto and health insurance policies to require the policy to pay for medical expenses and limit the payments to just the medical bills which are both reasonable and necessary. However, oftentimes these terms are poorly defined.

Medical necessity means that the treatment was required to help the patient recover as a result of injuries from their accident, not a treatment for another condition. This gets complicated when injuries the plaintiff claims aggravate medical conditions they already have, such as arthritis, or if the plaintiff has been the subject of an injury before. 

Sometimes lay testimony is accepted instead of expert medical testimony if the plaintiff gives a detailed description of the treatment and relates them directly to the injuries from the accident. This is not acceptable in all jurisdictions.

Collateral Source Rule and Why it Matters

This depends heavily on what state you are in. Some states maintain that a defendant can benefit from write-offs or other adjustments made by insurance to what the provider charged for treatment. Other states have what is called the Collateral Source Rule. The idea of the Collateral Source Rule is that the defendant should not have the benefit of payments made by insurance that the injured party obtained independently and pays premiums for.

Some states adopted the collateral source rule and still give the defendant the write-off benefit, with the argument being: The plaintiff would receive a windfall if they were compensated for the amount that was written off, No Collateral Source paid the written-off amounts, and Written off amounts are not real medical expenses because the plaintiff didn’t have to actually pay them.

However, that argument doesn’t address the fact that the injured plaintiff has to pay for their insurance coverage in order to have those amounts written off in the first place, which is part of the reason for the collateral source rule.

Under the Collateral Source Rule, the plaintiff is still required to prove that the medical charges were reasonable and necessary, however, the expert witness is not always required to be a doctor. A medical billing expert or a nurse who is familiar with customary charges may be accepted as an expert medical witness.

A defendant is only required to pay for the reasonable medical expenses necessary for treatment, not always the whole amount billed by providers. In cases where the plaintiff does not have a medical expert, they call every doctor who provided care as a witness. If a doctor referred the plaintiff to another, the referring doctor can testify that the treatment given by other practitioners was necessary.

If the plaintiff is seeking to recover damages for future medical expenses, there must be expert testimony that there will be ongoing medical expenses from the injury, and a reasonable cost for those future services. If the future projection is for a long period of time, the requested amount must reflect the current value of treatment. 

Why You Need Medical Billing Analysts

It is highly recommended to hire a medical billing and reimbursement expert to determine and testify to the reasonable value of medical service. The provider’s location can affect these costs and reimbursements.

Whether you are a plaintiff or a defendant in a case, one of the most important items in Automobile, Personal Injury, and Medical Malpractice cases is the cost of medical bills. Figuring out medical costs can be complicated, and expert guidance is critical to ensuring you have a clear understanding of what is “fair and reasonable” with regards to the finances involved in your medical care.

Medical Billing Analysts offers litigation support services nationwide, with offices in New York, New Jersey, Connecticut, Pennsylvania, Georgia, Florida, Texas, Nevada & California. Medical Billing Analysts represent both defendants and plaintiffs with regard to improper medical billing and coding.

The team of MBA professionals will review the hospital, medical and therapy bills to determine the value of past medical expenses, and based on local CPT codes they can also perform a Cost Projection Analysis of future costs.  Through meticulous analysis, we can justify the reasonable cost of services which assists in resolving the case.

Contact Medical Billing Analysts by phone or email at 800-292-1919 or intake@medicalbillinganalysts.com. We’re here for you, whether you need an evaluation of a single charge or a complex injury case.