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“Reasonable” Medical Expenses in Tennessee (Amount Billed or Amount Paid?) – The Law After West and Dedmon for Personal Injury Litigation

Posted on Jun 7 2016 3:21PM by Attorney, Jason A. Lee

A very important Tennessee Court of Appeals opinion was issued on June 2, 2016.  In this case, Jean Dedmon v. Debbie Steelman, No. W2015-01462-COA-R9-CV (Tenn. Ct. App. June 2, 2016), the Court discussed whether the amount an insurance company actually pays for medical services in a personal injury action, is, as a matter of law, the “reasonable” amount of medical expenses.  In order to recover medical expenses under Tennessee law, in a personal injury action, the plaintiff must prove the medical expenses were reasonable and necessary.  The reason the Dedmon decision is so important is because of the West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014) decision.  In the West case, the Tennessee Supreme Court, when interpreting the Tennessee Hospital Lien Act, essentially found that a hospital’s non-discounted charges reflected in their lien, were not reasonable because they do not reflect what is actually being paid in the marketplace.  The Court found that, under the Tennessee Hospital Lien Act, the amount actually paid for the hospital charges were the reasonable charges for the services provided, not the amounts billed which were, as a matter of law, unreasonable.

 

Since the time of the West decision, several trial courts and some Federal district courts have decided that the West case reasoning also applies to personal injury actions.  They have found that essentially, in a personal injury action in the State of Tennessee, evidence of the actual amount actually paid for medical bills is the only amount that can be introduced into evidence, not the amount billed or charged by the provider.  The reason is, due to insurance industry dynamics, there is almost always a significant difference in the amount billed or charged by the provider and the amount actually paid by insurance, Medicare or otherwise.  For instance, in the Dedmon case, the total amount of “incurred” medical expenses were $52,482.87 (the amount charged by the providers).  However, the plaintiff’s health insurance carrier only paid $18,255.42.  As a result, there is a significant disparity between the amount billed and the amount actually paid.


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TAGS: Tennessee Tort Reform, Damages, Evidence, Civil Procedure Comments [1]
  
 
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Jason A. Lee is a Member of Burrow Lee, PLLC. He practices in all areas of defense litigation inside and outside of Tennessee.

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Tennessee Defense Litigation Blog
Jason A. Lee, Member of Burrow Lee, PLLC
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Nashville, TN 37203
Phone: 615-540-1004
E-mail: jlee@burrowlee.com

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