Law v. Griffith

Cowin, J.

(concurring, with whom Ireland and Spina, JJ., join). General Laws c. 233, § 79G, sets forth a straightforward *362rule of evidence designed to facilitate the proof of “the fair and reasonable charge for [various medical] services or the necessity of such services or treatments.” It does so by creating an exception to the hearsay rule in order to permit the admission of sworn bills and reports, thereby eliminating the requirement that a provider appear in person to testify. However, because the provider is not present and because other evidence on the subject may be meaningful, the statute provides further that such bills and reports are not to be treated as the only competent evidence, and parties retain the right to introduce other types of evidence as well.

The court today rules correctly that, by virtue of this statute, the Legislature has declared that a bill for medical services otherwise in conformance with the statute shall be admissible on the question of the reasonable value of medical care, and that the judge was not free to override that lawful legislative determination. Unfortunately, the court then proceeds to characterize the first sentence of the statute as “very specific in its directive,” while minimizing the seemingly similar second sentence as “general” and not “delineating in any manner the permissible scope” of the evidence. Ante at 359-360. It then employs this questionable distinction to impress on the second part of the statute a policy-laden, murky construction that will be difficult, time-consuming, and expensive to apply, and that well may lead to inaccurate verdicts.

As the court admits, we have construed the second section of the statute to be confined by the so-called collateral source rule, a common-law rule of both substance and evidence that provides that recoveries in tort cases shall not be reduced by insurance payments or other benefits that the plaintiff receives from third parties. See Goldstein v. Gontarz, 364 Mass. 800, 808-809 (1974); Restatement (Second) of Torts § 920A (1979). Thus, we have for some time effectively amended the statute by imposing a judge-made restriction on the type of evidence that may be admitted thereunder. The statute itself contains no such limitation and makes no reference to the considerations underlying the collateral source rule.

For some time, this made little practical difference. Section 79G, inserted by St. 1958, c. 323, was adopted at a time when medical bills ordinarily reflected with reasonable accuracy the *363value of the medical services provided. This is no longer the case. The judge may, because of the statute, have erred in excluding the bill in this case, but he was plainly correct in concluding that medical bills on the whole have ceased to be a reliable measure of the value of particular services rendered to particular patients. The funding of medical services is now organized largely on the basis of private and public third-party payments. Large disparities often exist between the amounts billed by providers and the amounts that those providers are willing to accept as full payment from various insurers. Nor, contrary to the court’s concern with uninsured and publicly assisted plaintiffs, is the problem limited to such persons. Medical bills rendered to the affluent, as well as to the poor, often reflect costs, such as overhead, capital investment, research and development, and the subsidizing of other medical procedures, that are unrelated to the value of the specific services performed.

For these reasons, the collateral source rule has become an anachronism when applied to the valuation of medical services. Perhaps not the only, but certainly the principal, measure of the value of any goods or services is what a purchaser is willing to pay for them. The fact that the purchaser is the government or a private insurer does not alter that proposition. Given the realities of medical insurance and medical billing practices as they exist today, where large disparities can exist between the amounts billed by providers and the amounts that such providers are willing to accept as full payment, strict adherence to the collateral source rule distorts, rather than clarifies, the subject for jury consumption.

The court’s decision demonstrates that it recognizes the problem, but also that it shrinks from the most workable solution. Thus, the court concludes that “evidence may be introduced concerning the range of payments that the providers accept for the types of medical services that the plaintiff received,” but clings to the traditional view that “evidence of amounts actually paid to the plaintiff’s medical providers is not admissible.” Ante at 353. Passing the fact that it conflicts with § 79G (which appears to accommodate no restrictions on the use of otherwise admissible evidence), the decision represents a partial relaxation of the collateral source rule followed by a concession that “we should *364leave any further modifications of the collateral source rale’s application to the Legislature.” Ante at 359. The common-law collateral source rale, a judicial creation in the first place, can be revised, or even eliminated, by the judicial branch. In the alternative, we can await meaningful legislative enactment. The court, motivated in part by questionable policy concerns, seeks to do both, arriving at a nervous compromise that will be difficult to implement and that is unlikely to bring us closer to achievement of the central objective, i.e., to enable the plaintiff to recover reasonable medical expenses incurred for the necessary treatment of his or her injury. See Scott v. Garfield, 454 Mass. 790, 800 (2009).

The court’s rejection of an interpretation of § 79G that would admit evidence of what was actually paid in a given case reflects its suspicion that the use of such evidence will create different classes of plaintiffs based on how medical care is financed. More specifically, the court expresses concern that “[t]he potential for unequal treatment of plaintiff classes may be particularly pronounced for those individual plaintiffs . . . whose medical expenses are covered by [a Medicaid program such as Mass-Health].” Ante at note 11. It follows, according to the court, that, once a jury know that medical expenses have been paid by a third party, that jury will award only the amount of the payment, or even no medical damages at all (on the theory that the plaintiff has incurred no out-of-pocket loss). Implicit in these statements is a concern that jurors will effectuate a prejudice against publicly assisted (i.e., poor) people by reducing medical expense recoveries for that class.

It seems to me that these considerations, even if accurate, stray very far afield from an effort to determine what the Legislature intended when it adopted in § 79G what appears to be an uncomplicated exception to the hearsay rule. But the court’s concern with potential juror prejudice is not accurate. Judges and attorneys experienced with trial practice agree in large part that jurors overwhelmingly fulfil their obligations with great seriousness, follow instructions, see Gath v. M/A-Com, Inc., 440 Mass. 482, 493 (2003), and do not decide cases based on the status of parties. To the extent that there are exceptions, in my view, those jurors are as likely to be resentful of the rich as they are to be prejudiced against the poor. Be that as *365it may, it is not for us to restrict a legislative authorization of the use of certain kinds of evidence because we surmise (with little empirical support) that that evidence will be misused.

Suspicious of the effect on the jury of evidence regarding actual payments in the case being tried, the court packages a complex assemblage of permissible evidentiary questions from which it expects that jurors will distill what to do in an individual case. Thus, evidence may now be received regarding the “range” of payments that providers will accept and that such range is composed of varying payments by individuals and third-party payors. Experts may, and undoubtedly will, testify regarding billing, discounting, and the relationship of each to the reasonable value of the underlying services. Nothing, however, can be received that might indicate what actually happened in the case: not the identity of the third-party payor; not the payment practices of that third-party payor; and most assuredly not the amount that that third-party actually paid. If nothing else, the approach certainly gives new meaning to the concept of relevance.

It also invites more complicated, more expensive, and more prolonged discovery and trials. Plaintiffs in particular will feel obliged to attempt to penetrate various industry practices, while the complexities and costs of defense will also be affected. Those additional costs will inevitably find their way into the rate structures. The result of all this is that jurors will receive a considerable education regarding health care practices, probably much more than necessary to decide the case before them, but will have considerable difficulty applying the information to the case at hand. Trial judges will be under increased pressure to make certain that proffered evidence does not stray too close to what actually happened in the case, contrary to their normal role, and jurors will remain mystified by the refusal to tell them what a given procedure actually cost. In sum, we move farther and farther from the objective of valuing the medical services provided to the injured plaintiff.

If, in fact, we ever needed to shield jurors from the reality of insurance or other mechanisms by which another pays a party’s tort damages, we need not do so now. Jurors know insurance exists; they have it themselves. Yet we cling to a curious practice whereby we attempt to deny to a juror, who may himself or herself that day have submitted a claim to a health carrier, the *366fact that a party in the case before him also has insurance coverage. The court today recognizes this reality but coyly deprives that juror of a complete picture of how that insurance has operated in the case on trial.

We send criminal defendants to prison for life on the assumption that jurors listen to, understand, and abide by a judge’s instructions. See Commonwealth v. Donahue, 430 Mass. 710, 718 (2000). We can do the same on the subject of health insurance. Judges can explain effectively that the amount paid may be the product of rates negotiated between a provider and an insurer, and is only one factor that jurors should consider. They can transmit to the jury the underlying purpose of the collateral source rule, i.e., that the tortfeasor should not benefit from the existence of a third-party payor, without depriving the fact finder of the relevant evidence of what was actually paid. Judges can also explain that the chance of an excessive recovery by a plaintiff is reduced because of the creation of liens that reallocate the payments in a more equitable manner. See G. L. c. Ill, § 70A; Scott v. Garfield, supra at 801. Surely this is a better approach than evading the issue and giving the jury a greater opportunity to apply their own assumptions about insurance without guidance from the court.

I acknowledge that the Legislature in 1986 effected a modest change in the collateral source rule with respect to medical malpractice cases, see G. L. c. 231, § 60G, inserted by St. 1986, c. 351, § 25, whereby there is authorized a postverdict procedure for reducing awards of damages on the basis of evidence of insurance payments and the cost of obtaining coverage. The court worries that the ensuing quarter century of inaction may mean that the Legislature is wedded to the collateral source rule and desires that it be left unchanged. I doubt that is so. Legislative bodies routinely defer action on complicated issues until a critical mass is reached, and I suspect that that is the case here. As I have indicated, the collateral source rule is a product of common law, and we are empowered to alter or eliminate it.

Last year, a thoughtful concurrence by Justice Cordy in Scott v. Garfield, supra at 802 (Cordy, J., concurring), appeared to point the way toward a more realistic treatment of this subject. The court now appears to have rejected that suggested new direction. I would pursue it by opening up all evidence that *367bears in any way on the determination of the reasonable value of medical services. See, e.g., Stanley v. Walker, 906 N.E.2d 852, 858 (Ind. 2009) (bills and amounts paid admissible, though court suggests there should be no reference to insurance); Robinson v. Bates, 112 Ohio St. 3d 17, 20, 22-23 (2006) (construing statute similar to G. L. c. 233, § 79G, to permit admission of both medical bills and amounts accepted by providers).