Why Medical Billing Experts Are Essential Witnesses: A Case Study?

The judge’s decision in a recent federal case illustrates why lawyers need to understand state law regarding the proof required to recover medical expenses. The plaintiffs in a wrongful death case hoped to obtain partial summary judgment in their favor for an award of past medical expenses. Because they did not support their motion with evidence from a medical billing expert , the judge ruled against them.

Charles Wyman was a route manager for a company that operates family amusement centers. As part of his job, he serviced arcade machines. Wyman was working on a “claw” arcade game in Las Vegas when he was electrocuted. The electrocution was caused by the reversal of a black wire carrying power and a green grounding wire inside the machine. Wyman had no reason to believe that the wires had been reversed when he opened the machine.

Wyman remained in contact with the electrified machine for about ten minutes before employees of the Fire Department arrived and unplugged the machine. Paramedics then transported Wyman to a hospital. He died before he recovered consciousness.

The machine was manufactured by and purchased from Smart Industries Corporation. Multiple lawsuits were filed, including a wrongful death suit against Smart Industries by the Wyman family, Wyman’s estate, and an insurance company that held a subrogation interest in the claim of Wyman’s employer. The suits were removed to federal court and consolidated.

The suits alleged that the machine left the factory in a defective condition. Smart Industries maintained that its quality control department would have seen that the wires were attached incorrectly, making it likely that the wiring was changed after the game was sold. Wyman’s employer denied making any change to the machine. The court held that a jury should decide whether Smart Industries sold a defective product that caused Wyman’s death.

The Wymans’ claim included undisputed ambulance and funeral expenses. The Wymans also sought recovery of a hospital bill of more than $165,000. The Wymans moved for partial summary judgment for those expenses in the event that it proved liability at trial.

Smart Industries opposed the motion, arguing that it needed to complete discovery before it could determine whether there was a basis for challenging the billings. The court granted the summary judgment motion, holding that Smart Industries had not demonstrated that further discovery would help it challenge the medical expenses.

After briefing on the summary judgment motion was completed, Smart Industries took the depositions of Wyman’s treating neurologist and the hospital’s Director of Collections. Those depositions were not taken earlier because the pandemic delayed the completion of discovery.

The neurologist testified that he was “not even aware of the cost of the treatment provided.” The Director of Collections refused to offer an opinion on whether the medical bills were reasonable as compared to other billings for similar services in the community.

Smart Industries moved the court to reconsider its summary judgment decision. It argued that under Nevada law, the Wymans needed to submit proof beyond the authenticated medical bills in order to recover those expenses. It argued that they also needed to submit expert evidence that the bills were “accurate, reasonable, and necessarily incurred.”

The Wymans argued that when authenticated medical bills have been paid, that payment is prima facie evidence that the bills are reasonable. The Wymans argued that the neurologist’s testimony established that services reflected in the billings were necessary.

The court did not expressly respond to the argument that medical bills are presumed to be reasonable when they have been paid. Some jurisdictions follow that rule and others do not. In Illinois, for example, a long line of cases establish that the payment of medical bills — by the injured party, by an insurance company, or by Medicare or Medicaid — is prima facie evidence that the bills are reasonable, but only to the extent of the payment. Thus, if insurance paid 60% of the bill, the plaintiff must offer evidence that the unpaid 40% was reasonable in order to obtain a verdict for the entire bill.

Nevada law on the reasonableness of medical bills is sparse. Nevada appellate decisions nevertheless appear to require the plaintiff to prove the reasonableness of medical bills, whether they have been paid or not. The district court judge did not do a deep dive into Nevada law, but he rejected the Wymans’ claim that paid bills are presumptively reasonable. He also held that the testimony of the neurologist and the hospital’s Director of Collections fell short of establishing that the medical expenses were reasonable. The court therefore reconsidered its partial summary judgment decision.

If the plaintiffs prove that Smart Industries was liable for Wyman’s electrocution, the judge will require them to prove the reasonableness of medical expenses at trial. Since neither the neurologist nor the hospital representative are in a position to testify that the charges are reasonable, they will need to offer the testimony of a medical billing expert. 

Even in states that regard the payment of medical bills as prima facie proof that the bills are reasonable, a medical billing expert may be necessary to prove that unpaid bills are reasonable. In most cases, insurance pays only a percentage of the bill. The percentage paid by insurance is typically less than the usual, customary, and reasonable charge for the services rendered. The testimony of a medical billing expert can establish that the full amount of the bill should be awarded as damages.

In addition, when states regard payment of a medical bill as prima facie evidence of reasonableness, defendants are entitled to challenge the presumption that the charges are reasonable simply because an insurance company paid them. Defendants use medical billing experts to counter claims that medical billings were reasonable.

Expert testimony can be particularly effective when the plaintiffs rely on a doctor to testify that his or her medical charges were reasonable. As the neurologist in the Wyman case candidly admitted, doctors might not even know how much their own practice charges for a particular service. They rarely have personal knowledge of the prices that other physicians in the community charge for comparable services. Effective cross-examination of the doctor, coupled with the testimony of a medical billing expert, can help defendants avoid verdicts for unreasonable medical charges.