What Is the Reasonable Value of Medical Charges in a Personal Injury Case?

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medical billing expert in personal injury case

State law governs the recovery of damages in personal injury cases. Every state allows injury victims to recover necessary and reasonable medical expenses that were incurred because of another person’s negligence. The necessity of treatment is proved by medical testimony.

The reasonable value of medical expenses is generally the usual and customary charge for the billed service or procedure. How that reasonable value is determined depends on state law. Medical billing experts help lawyers prove and challenge the reasonable value of medical services.

Presumption of Reasonableness

Some (but not all) states presume that medical expenses are reasonable when the patient, a health insurer, or someone else paid the bill. The theory underlying the presumption is that nobody would pay an unreasonable bill.

The presumption of reasonableness does not attach to any portion of the bill that was not paid. Health insurance companies often pay only a portion of a bill for medical services. Even when the provider agrees to accept partial payment as full payment, most states rely on the collateral source rule to give injury victims the opportunity to collect the entire bill. However, injury victims cannot rely on the presumption of reasonableness to establish that unpaid charges are reasonable.

Defendants are allowed to rebut the presumption of reasonableness. If a defendant can establish that a health insurer paid an unreasonable charge, the defendant will not he liable for that charge.

UCR Charges

The UCR (usual, customary, and reasonable) amount of a medical bill is generally defined by two factors. The “usual” charge is the charge that the same provider ordinarily bills to other patients for the same procedure or service. If a health care provider inflates a charge without justification in a particular case, the inflated charge is not the usual charge.

The customary charge is the charge that other providers in the same geographic area bill for the same services. The geographic limitation recognizes that the usual charge for a service in Clearwater, Florida will not necessarily be the same as the charge billed for the same service in New York City.

A range of charges may fall within the definition of customary charges. Some doctors charge more for a procedure because they more experience and skill or a better reputation than other doctors. Some charge less because they have not altered their fee schedules in recent years. The mean or average charge will typically be a reasonable charge, but charges that are higher than the average may also be reasonable if they fall within a reasonable range. Charges that are well above the average might not be reasonable.

Opinions About Reasonableness and Daubert

Medical billing experts provide opinions about the reasonable value of medical billings. Those opinions are routinely admitted into evidence in state and federal courts.

Doctors are not usually qualified to give an opinion about the reasonableness of their own charges. They might have anecdotal information about the charges of other practitioners in the same area for the same services, but they have rarely gathered sufficient facts to support an opinion about the usual, customary, and reasonable charges that prevail in their geographic area. Nor have they used a reasonable methodology to form their opinion.

Courts recognize that medical billing experts are qualified to render expert opinions by virtue of training and experience that most people lack. Medical billing experts learn to understand billing standards and the complex procedural codes that identify the specific services and procedures that have been billed. Courts agree that medical billing experts do not need medical training to qualify as expert witnesses in medical billing, but billing experts do acquire specialized knowledge that allows them to understand medical records and interpret diagnostic and procedural codes.

To satisfy the Daubert standard, medical billing experts base their opinions on sufficient facts and data. They rely on medical records and on databases that supply the costs of specific medical services that other providers within the same zip code have billed for the same services. Those sources provide sufficient data to support an expert’s analysis of a medical billing.

Expert Methodology to Determine Reasonable Value

After gathering data, medical billing experts derive their opinions from reliable methodologies. They begin by performing a line-by-line analysis of medical bills. They look for errors, including duplicate charges and other data entry errors.

After scrutinizing the billing, medical billing experts compare billings to medical records. Medical billings use procedural codes to identify services and procedures provided to a patient. Billing experts determine whether the medical records indicate that the services and procedures identified by procedural codes are the services and procedures that were provided.

Medical billing experts rely on their expert understanding of billing codes to assure that the billing does not reflect a more expensive service than the service that the patient received. For example, a billing code might reflect a more complex procedure than the one that was performed. An error of that nature results in overbilling. Overbilling always results in unreasonable charges.

Medical billing experts search billings for “unbundling” errors that occur when doctors use billing codes for separate services that were provided at the same time. Billing experts are aware of coding rules that require billers to use a single code, rather than multiple codes, to reflect certain procedures that are commonly undertaken in a single session. Using separate codes to describe the separate sessions result in overbilling. 

Finally, medical billing experts use reliable databases to determine the actual prices charged by other physicians in the same area for the same services. That analysis allows the expert to determine whether the medical billing falls within a reasonable range of charges for the same services or is substantially higher. Billing databases are widely accepted as a reliable source of facts and data that supports a billing expert’s opinion regarding the reasonableness of medical billings

In personal injury cases, both plaintiffs and defendants can benefit from a medical billing expert’s analysis of the reasonable value of billed services. Plaintiffs use medical billing experts to prove reasonableness as a condition of recovering reimbursement of those charges as damages. Conversely, defendants use medical billing experts to challenge unreasonable charges.