Bates v. Hogg , 22 Kan. App. 2d 702 ( 1996 )

Gernon, J.:

Plaintiff Dana Bates appeals the trial court’s order prohibiting her from presenting evidence on the full value of her medical expenses and limiting the evidence at trial to the actual amounts paid. Bates also appeals the court’s ruling limiting the testimony of one of her expert witnesses and the court’s order eliminating the jury award for noneconomic damages.

Defendant Clinton Hogg and Bates were involved in an injury accident in January 1992. Hogg’s pickup truck, traveling at approximately 40 miles per hour, struck Bates’ vehicle from behind.

Prior to trial, Hogg filed a motion in limine to limit Bates’ evidence of economic damages to the amounts actually paid by Medicaid on her behalf. Hogg sought to prevent Bates from introducing evidence concerning the market value or list price of the services she received. The trial court granted the motion.

At trial, Bates presented medical evidence of her injuries. Included in her claim for damages were damages for a shoulder injury she claimed resulted from the accident. She testified that she initially only complained of pain in her neck, back, collarbone, and ankle. However, several months after the accident, her shoulder began popping out of joint. She eventually was diagnosed with a glenoid humeral tear and had to have two different surgeries on the shoulder. She has a scar on her right shoulder and has reduced range of motion due to the injury and surgery.

Hogg claimed that the shoulder injury was not caused by the accident. He attempted to discredit Bates’ claim that the wreck caused the shoulder injury by pointing out that she did not complain about her shoulder until 4 months after the accident.

• A jury returned a verdict, finding Hogg 100% at fault and awarding Bates $1,305.23 in medical expenses, $0 for future medical expenses, $3,310 in noneconomic loss to date, and $0 in future noneconomic loss.

After trial, the court found Bates had not met the $2,000 threshold for economic damages required by K.S.A. 40-3117 and eliminated the noneconomic damages, thus leaving total damages awarded to Bates of $1,305.23.

Limiting Evidence of Economic Damages

The first issue on appeal concerns the prohibition by the trial court of a presentation by Bates of the full value, or market value, of the medical treatment she received as a result of the accident and limiting her to presenting evidence of what Medicaid actually paid on her behalf after the statutory write-off or charge-down. She contends that the court’s limitation is a violation of the Kansas collateral source rule.

The question, simply stated, is whether an injured plaintiff can include, in a claim for economic damages, amounts that have been written off by the health care provider in conjunction with a Medicaid contract. This is a question of first impression in Kansas.

Both sides agree that whether evidence of such amounts is admissible for a determination of economic damages is a question of law. Therefore, this court’s scope of review is unlimited. See State v. Donlay, 253 Kan. 132, 134, 853 P.2d 680 (1993).

“When determining a question of law, this court is not bound by the decision of the district court.” Memorial Hospital Ass’n, Inc. v. Knutson, 239 Kan. 663, 668, 722 P.2d 1093 (1986).

“[T]he purpose of awarding damages is to make a party whole by restoring that party to the position he [or she] was in prior to the injury.” Samsel v. Wheeler Transport Services, Inc., 246 Kan. 336, 352, 789 P.2d 541 (1990), overruled in part on other grounds 248 Kan. 824, 844, 811 P.2d 1176 (1991).

Generally, damages in a personal injury case are divided into economic and noneconomic damages.

“Economic damages include the cost of medical care, past and future, and related benefits, i.e., lost wages, loss of earning capacity, and other such losses. Noneconomic losses include claims for pain and suffering, mental anguish, injury and disfigurement not affecting earning capacity, and losses which cannot be easily expressed in dollars and cents.” 246 Kan. at 352.

The issue presented only involves economic damages, specifically medical expenses.

The fundamental principle of the law of damages is that a person who suffers personal injuries because of the negligence of another is entitled to recover the reasonable value of medical care and expenses for the treatment of his or her injuries, as well as the cost of those reasonably certain to be incurred in the future. 22 Am. Jur. 2d, Damages § 197, p. 169.

The question then becomes: What role does the collateral source rule play in the damage action before this court?

"The collateral source rule is generally recognized at common law. The rule is that benefits received by the plaintiff from a source wholly independent of and collateral to the wrongdoer will not diminish the damages otherwise recoverable from the wrongdoer.” Masterson v. Boliden-Allis, Inc., 19 Kan. App. 2d 23, 27, 865 P.2d 1031 (1993).

" ‘The collateral source rule permits an injured party to recover full compensatory damages from a tortfeasor irrespective of the payment of any element of those damages by a source independent of the tortfeasor. The rule also precludes admission of evidence of benefits paid by a collateral source, except where such evidence clearly carries probative value on an issue not inherently related to measurement of damages.’ 3 Minzer, Nates, Kimball, Axelrod and Goldstein, Damages in Tort Actions § 17.00, p. 17-5 (1984).” Wentling v. Medical Anesthesia Services, 237 Kan. 503, 515, 701 P.2d 939 (1985).

Clearly, benefits paid to a health care provider on behalf of an injured plaintiff are benefits from a collateral source. However, should the measure of benefits be limited to the amount actually paid or required to be paid?

It is our conclusion that the collateral source rule is not applicable under these circumstances. Nothing in the reasoning underlying the collateral source rule supports Bates’ position on this issue.

Presently, a medical provider, by agreement and contract, may not charge Medicaid patients for the difference between their customaiy charge and the amount paid by Medicaid. Therefore, the amount allowed by Medicaid becomes the amount due and is the “customary charge” under the circumstances we have before us. See K.A.R. 30-5-59(e) (1993 Supp.).

In Evanston Hosp. v. Hauck, 1 F.3d 540 (7th Cir. 1993), cert. denied 127 L. Ed. 2d 215, 114 S. Ct. 921 (1994), the hospital accepted $113,424 from Medicaid as payment in full of a $270,760.24 bill. When the patient received a $9.6 million personal injury award, the hospital attempted to return the payment and recover the former amount due. The Seventh Circuit stated:

“The hospital’s acceptance of the money from Medicaid was conditioned on the understanding that it would be payment in full — whatever claims the hospital might have had against Hauek were relinquished to [the Illinois Medicaid agency].

“Under Illinois law, when Medicaid pays money to a hospital on behalf of an individual, it ‘shall constitute payment in full for the goods or services covered thereby. Acceptance of the payment by or on behalf of the vendor . . . shall bar [the vendor] from obtaining, or attempting to obtain, additional payment therefor from the recipient or any other person.’ ” Hauck, 1 F.3d at 542 (quoting Ill. Comp. Stat. ch. 305, 5/11-1 [1991]).

Other cases have reached similar results. See Rybicki v. Hartley, 792 F.2d 260 (1st Cir. 1986); Holle v. Moline Public Hosp., 598 F. Supp. 1017 (C.D. Ill. 1984).

Under the facts before us, we agree with a statement made by a federal court in North Carolina, which stated in a similar case: “It would be unconscionable to permit the taxpayers to bear the expense of providing free medical care to a person and then allow that person to recover damages for medical services from a tortfeasor and pocket the windfall.” Gordon v. Forsythe County Hospital Authority, Inc., 409 F. Supp. 708, 719 (M.D.N.C. 1976).

Constitutionality

Bates next argues that the trial court’s ruling, and now this court’s ruling, on the Medicaid issue violates the equal protection provisions of the United States and the Kansas Constitutions.

As a threshold matter, for Bates to prevail on this issue, she must show that she is being treated differently from similarly situated individuals. This she cannot do.

Under this court’s ruling on the Medicaid issue, Bates is being treated no differently from any other injured person attempting to recover damages in Kansas. Therefore, her argument fails on this issue.

Directed Verdict

This issue is moot, since the jury found Hogg 100% at fault.

Expert Witness

Bates next argues the trial court abused its discretion by prohibiting Dr. Philip Mills from testifying as to her permanent impairment rating because the doctor had failed to provide his opinion concerning the rating prior to trial.

Both parties agree that the standard of review is abuse of discretion. See Marshall v. Mayflower Transit, Inc., 249 Kan. 620, Syl. ¶ 8, 822 P.2d 591 (1991).

The record shows that Dr. Mills was about to testify as to his opinion of Bates’ permanent impairment rating. Hogg objected to the opinion on the basis that the doctor’s report provided during discovery did not contain such an opinion and had stated that a rating was premature. Hogg argues that K.S.A. 60-226(b) supports the district court’s ruling.

K.S.A. 60-226(b) covers discovery facts known and opinions held by experts prior to trial. The statute reads in relevant part:

“(4) Trial preparation: Experts. Discovery of facts known and opinions held by experts, otherwise discoverable under the provisions of subsection (b)(1) and acquired or developed in anticipation of litigation or for trial, may be obtained only as follows:

(A) (i) A party may through interrogatories require any other party to identify each person whom the other party expects to call as an expert witness at trial, to state the subject matter on which the expert is expected to testify and to state the substance of the facts and opinions to which the expert is expected to testify and a summary of the grounds for each opinion, (ii) Upon motion the court may order further discovery by other means, subject to such restrictions as to scope and such provisions, pursuant to subsection (b)(4)(C), concerning fees and expenses as the court may deem appropriate.

"(e) Supplementation of responses. A party who has responded to a request for discovery with a response that was complete when made is under no duty to supplement the party’s response to include information thereafter acquired, except as follows:

(1) A party is under a duty seasonably to supplement the party’s response with respect to any question directly addressed to (A) the identity and location of persons having knowledge of discoverable matters, and (B) the identity of each person expected to be called as an expert witness at trial, the subject matter on which the party is expected to testify and the substance of the party’s testimony.

(2) A party is under a duty seasonably to amend a prior response if the party obtains information upon the basis of which (A) the party knows that the response was incorrect when made, or (B) the party knows that the response though correct when made is no longer true and the circumstances are such that a failure to amend the response is in substance a knowing concealment.

(3) A duty to supplement responses may be imposed by order of the court, agreement of the parties, or at any time prior to trial through new requests for supplementation of prior responses.”

We conclude it was error not to allow Dr. Mills to testify as to Bates’ impairment rating. However, we find it was harmless error, since Bates produced evidence of the same impairment rating through the testimony of Dr. Jay Jones.

“Harmless error is error which does not prejudice the substantial rights of a party. It affords no basis for a reversal of a judgment and must be disregarded.” Hagedorn v. Stormont-Vail Regional Med. Center, 238 Kan. 691, 701, 715 P.2d 2 (1986).

Reduction of Jury Award

Bates argues the court erred in finding that she did not meet the threshold requirement of K.S.A. 40-3117 because there were less than $2,000, in economic damages. She argues the evidence showed there was significant disfigurement and permanent injury and, therefore, she has met the statute’s requirements.

Hogg claims that the jury’s verdict matches the amount of damages that Bates claimed for expenses which were not related to her shoulder and, therefore, the court was correct because the only permanent disfigurement was to her shoulder.

The jury found Hogg at fault and awarded Bates medical expenses of $1,305.23 and noneconomic loses of $3,310. According to the trial court, the medical expense award coincided with only the expenses not associated with Bates’ shoulder injury.

The jury instructions directed the jury to determine the amount of damages sustained by Bates. Instruction No. 9 instructed the jury that it should consider:

“a. Pain, suffering, disabilities, or disfigurement, and any accompanying mental anguish suffered by plaintiff to date and those plaintiff is reasonably expected to experience in the future;

“b. The reasonable expenses of necessary medical care, hospitalization and treatment received and reasonable expenses of necessary medical care, hospitalization and treatment reasonably expected to be needed in the future.”

Our reading of the record and the jury’s award here leads us to conclude that the trial court was correct in eliminating the non-economic damages.

Bates agrees that any permanent injury or disfigurement was associated with her shoulder problems. The problem with the non-economic damage award is that, by whatever figures are used, the jury awarded Bates only damages for medical expenses not associated with the shoulder injury.

Finding no reversible error, we affirm.