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Admissibility of Medical Bills into Evidence

With medical bills getting more and more expensive, it seems that people will fight more about whether or not medical bills are reasonable and necessary. In Illinois, for a party to introduced bills into evidence, they are required to prove that the bills are reasonable, necessary, and related. Usually, by the end of the case the defense has agreed to stipulate to allow the medical bills into evidence. Plaintiffs often use requests to admit in an attempt to get the defense to agree to allow the bills into evidence. Typically, the defense will refuse to admit the pills are reasonable unnecessary in writing, requiring an agreement orally, which then gets confirmed my email or letter. Defense may hire experts to rebut the plaintiff’s evidence about the reasonableness and necessity of bills, but they rarely do.

The collateral source rule permits a party to offer evidence of what is reasonable and necessary, but prohibits testimony about what a collateral source, a third party, like an insurer, actually pays for services. This is based on the principal that a tortfeasor, (the person who did wrong and caused the need for medical bills) should not get the benefit of plaintiff’s insurance agreements.

In the case Verci vs. High Plaintiff incurred over $1,000,000 in medical expenses, so the defense decided to fight about it. Defense hired an expert, Rebecca Reier to claim that the charges of Dr. Kube, who charged the great majority of the bills, were unreasonably high.

Doctor Kube testified based on what he thought would be a fair reimbursement rate for his services.

Rebecca Reier testified she used databases called FAIR Health, Optum, and the American Hospital Directory. She identified FAIR Health as her primary database. She testified that FAIR health gets all of its data from insurance companies. The insurance companies report the charges the medical providers give them and FAIR health then separates them geographically. The expert eliminated the highest and lowest charges. FAIR health does not identify providers. Optum uses FAIR health data and uses smaller geographical regions.

Trial court ruled that the defense could not cross examine doctor Kube regarding the cash advertising price at trial. It also ruled that defendants billing expert, Rebecca Reier, could testify. Plaintiff would be allowed to cross examine her.  The parties agreed to appeal the case and set the issues is whether or not the trial court erred in its rulings.

The appellate court ruled that both of the judge’s orders at the trial court were unreasonable. The appellate court felt the admissibility of the advertised prices was acceptable. However, the trial court should not have refused to allow the defenders to cross examine Kube about the prices he charges.

The appellate court also held that allowing Kube’s testimony was not admissible. The court felt that her information was unfair to use. The information she was going to use came primarily from the FAIR health database. This is not evidence of what providers charge because it comes from unknown insurance companies instead of health care providers. The database therefore is used to determine reimbursement, not the reasonableness of provider charges. Also, the court felt the database was incomplete so it should not be used.  The appellate court did not discuss the American Hospital Directory.