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New Hampshire’s Self-Pay Discount Does Not Reduce the Available Damages in Medical Negligence and Personal Injury Cases
Kevin F. Dugan and Jared R. Green
Defendants in New Hampshire medical negligence and personal injury cases have recently begun raising the issue whether RSA 151:12-b, a statute enacted in 2010 pertaining to hospital billing practices, operates to limit plaintiffs’ recoverable medical expenses. The issue has now been litigated and the argument was rejected by the Superior Court.
A. RSA 151:12-b:
RSA 151:12-b became effective on July 1, 2010. It states as follows: “When billing self-pay patients for a service rendered, a hospital . . . shall accept as payment in full an amount no greater than the amount generally billed and received by the hospital for that service for patients covered by health insurance.” It goes on to say that the amount generally billed to health carriers shall be determined in a manner consistent with Section 9007 of the Patient Protection and Affordable Care Act of 2009. 
The Patient Protection and Affordable Care Act of 2009 is a 900+ page federal statute. Section 9007 requires nonprofit hospitals to comply with certain requirements in order to maintain charitable status under Section 501(c)(3) of the Internal Revenue Code. Hospitals must create a financial assistance policy and may charge persons eligible for financial assistance no more than the lowest amounts charged to individuals who have insurance covering such care.
B. Recent Experience:
In a recent malpractice case of ours, the defense filed a motion asking the trial court to take judicial notice of RSA 151:12-b. It also asked the court to instruct the jury that “any medical charges incurred by [the plaintiffs] from a New Hampshire acute care facility after July 1, 2010 or which the [plaintiffs] argue will be necessary in the future from a New Hampshire hospital must be calculated pursuant to RSA 151:12-b. This statute provides, in part, as follows: ‘... an amount no greater than the amount generally billed and received by the hospital for that service for patients covered by health insurance.’”
C. The Statute Has No Bearing on the Recoverable Damages in a Civil Suit:
In a New Hampshire civil suit, the jury is instructed to award “[t]he reasonable value of medical care, services, and supplies reasonably required and actually given in the treatment of plaintiff and the reasonable value of similar items that will probably be required and given in the future.” New Hampshire cases interpreting the reasonable value of medical care have widely held that plaintiffs are entitled to recover the billed amount of their medical expenses even when the medical care providers have written off a portion of those charges. Such cases apply the common law collateral source rule and conclude that any discounts accepted by the medical care providers are considered collateral source benefits that do not reduce the plaintiff’s damages. The cases apply the collateral source rule equally whether the discounts are mandated by law, as in the case of Medicare and Medicaid, or are the result of a contractual agreement, as in the case of private health insurance or workers’ compensation.
RSA 151:12-b is no different than Medicare and Medicaid in that it imposes a statutory discount in self-pay cases. Therefore, such discounts are collateral source benefits and the billed amount remains the reasonable value of the services for purposes of determining damages in a civil suit. If the legislature intended to repeal the common law collateral source rule by passing RSA 151:12-b it would have done so explicitly.
D. The Dangers of Unfair Prejudice, Confusion of the Issues, and Misleading the Jury Substantially Outweigh Any Benefit Gained by Informing the Jury of RSA 151:12-b:
Informing the jury of RSA 151:12-b would improperly introduce insurance coverage and collateral source benefits into the case. The existence of the statute would be meaningless to the jury unless it were also informed that the plaintiff had a third-party payor that paid less than the billed amount. However, it is an abuse of discretion to admit evidence of a plaintiffs’ receipt of collateral source benefits because such evidence “plainly fails” the N.H.Evid.R. 403 balancing test. Our Supreme Court has held that “[t]he minimal probative value of this evidence [is] substantially outweighed by the dangers of unfair prejudice, confusion of issues, and misleading the jury.”
The probative value of RSA 151:12-b is virtually nonexistent, yet the jury would be invited to speculate about the impact of insurance coverage on the plaintiff’s past and future medical expenses, something our Supreme Court has expressly forbidden. Furthermore, admission of RSA 151:12-b would unfairly prejudice plaintiffs’ ability to recover damages for future medical expenses because there is no guarantee that any of the medical care a plaintiff will need in the future will be obtained at a New Hampshire hospital subject to the statute. Nor is there any guarantee that the statute will remain in effect and unchanged for the rest of the plaintiff’s life. After all, “the legislature has the power to change, modify and repeal existing law, and to enact new laws, and . . . the individual citizen, with all his rights to protection, has no vested interest in the existing laws of the State . . .”
The plaintiff in a civil suit has only one opportunity to recover damages sufficient to cover all of his or her future needs. To reduce the available damages based on the speculative assumptions that a two-year old statute addressing hospital billing practices will remain in effect and unchanged for the rest of the plaintiff’s life and that any hospital care he or she ever has will take place in New Hampshire is likely to result in an unfair shortfall.
E. The Trial Court Has Discretion to Reject Judicial Notice of RSA 151:12-b
Rule 201 of the New Hampshire Rules of Evidence governs judicial notice. According to the Reporter’s Notes, “It is contemplated that laws of this state would be noticed . . . within the court’s discretion . . .” Trial courts should exercise their discretion to decline taking judicial notice of RSA 151:12-b. It has no bearing on the plaintiff’s recoverable damages, it does not purport to govern the conduct of any of the parties, and it would invite the jury to speculate on improper matters.
F. Trial Courts Should Decline to Instruct the Jury on RSA 151:12-b:
The purpose of jury instructions is to identify issues of material fact, and to inform the jury, in clear and intelligible language, of the appropriate standards of law by which to resolve such issues. “In explaining the law, the trial court should avoid instructions that are reasonably capable of confusing or misleading the jury.” Whether or not a particular instruction is necessary is left to the sound discretion of the trial judge.
Trial courts should exercise their discretion to decline instructing the jury regarding RSA 151:12-b because such an instruction is unnecessary and would not inform the jury of the appropriate standards by which to resolve a material issue of fact. The self-pay reduction imposed by the statute is identical to the Medicare and Medicaid reductions that have been held to be collateral source benefits in cases like this. The plaintiffs are entitled to recover the reasonable value of their medical bills based on the billed amount, not the paid amount. Thus, RSA 151:12-b is meaningless in civil damages cases and the jury need not hear anything about it.
Not only is RSA 151:12-b irrelevant; it is quite capable of confusing or misleading the jury since it invites the jurors to speculate about the impact of collateral source benefits and insurance coverage and its application to the plaintiff’s future medical expenses is far from guaranteed.
G. In our case, the issue was litigated before Superior Court Judge John Lewis. During a telephonic hearing, Judge Lewis indicated that he views the statutory discount as akin to Medicare and Medicaid and that evidence of the statute is barred by the collateral source rule. He subsequently issued a brief order denying the defendants’ motion.
RSA 151:12-b should not be introduced into personal injury or medical negligence cases because it has no bearing on the damages available to the plaintiffs. Moreover, it would invite the jury to speculate into improper matters such as insurance coverage and collateral source benefits. Trial courts should follow Judge Lewis’s lead and exercise their discretion to decline to take judicial notice of the statute and decline to instruct the jury on it.
. RSA 151:12-b.
. Section 9007(a)(r)(5)(a).
. N.H. Civil Jury Instruction 9.6.
. See Williamson v. Odyssey House, Inc., 2000 DNH 238, 2000 WL 1745101 (D.N.H. November 3, 2000) (DeClerico, J.); Plummer v. Optima Health - Catholic Medical Center, No. 98-C-1010, Order On Defendant Catholic Medical Center’s Motion to Compel Production of Medicaid Information (Rockingham County Superior Court, November 13, 2000) (McHugh, J.); McManus v. DeMoulas Supermarkets, Inc., No. 06-C-148, Order on Motion in Limine (Hillsborough County Superior Court Southern District, March 28, 2007) (Brennan, J.); Galluscio v. Hall, No. 06-C-0045, Order (Belknap County Superior Court, October 1, 2007) (Mohl, J.); Price v. Goodsell, No. 04-C-0600, Order (Merrimack County Superior Court, November 30, 2007) (Mangones, J.); Veilleux v. Noonan, No. 06-C-207, Order on Motion in Limine (Grafton County Superior Court, April 7, 2008) (Houran, J.); Christiansen v. Kunze, No. 07-C-004, Order on Defendant’s Motion for Summary Judgment as to the Measure of Medical Expense Damages (Cheshire County Superior Court, April 16, 2008) (Arnold, J.); Bradshaw v. Matzkin, No. 06-C-0025, Order on Defendant’s First Motion in Limine - Exclusion of Evidence of Unpaid Medical Expenses (Grafton County Superior Court, April 23, 2008) (Vaughn, J.); Michaud v. Bridges, No. 07-C-0055, Order (Strafford County Superior Court, June 30, 2008) (Brown, J.); Couturier v. Park, No. 07-C-0397, Order (Hillsborough County Superior Court Northern District, July 15, 2008) (Abramson, J.); Whiteman v. Cityside Management Corp., No. 06-C-0075, Order on Motions in Limine (Hillsborough County Superior Court Northern District, January 23, 2009) (O’Neill, J.); Aumand v. Dartmouth Hitchcock Medical Center, 611 F.Supp.2d 78, 90-92 (D.N.H. 2009) (Laplante, J.); Howes v. State Farm Mutual Automobile Insurance, No. 09-C-121, Order on Pending Motions (Hillsborough County Superior Court Northern District, February 20, 2011) (Garfunkel, J.).
. See e.g. Williamson (Medicaid); Plummer (Medicaid); Price (Medicare); Christiansen (Medicaid); Bradshaw (Medicaid); Aumand (Medicare).
. See e.g. Michaud (private health insurance); Whiteman (workers’ compensation carrier).
. “[T]he government sets the rates that providers who honor public insurance programs, like Medicare and Medicaid, must accept for certain services.” Wal-Mart Stores, Inc. v. Crossgrove, 276 P.3d 562, 567 (Colo. 2012), reh'g denied (May 29, 2012).
. See Sweeney v. Ragged Mountain Ski Area, Inc., 151 N.H. 239, 241 (2004) (“We have often stated that we will not interpret a statute to abrogate the common law unless the statute clearly expresses that intent.”) (emphasis in original).
. Cyr v. J.I. Case Co., 139 N.H. 193, 196-98 (1994).
. Id., 139 N.H. at 198.
. O’Donnell v. HCA Health Services of New Hampshire, 152 N.H. 608, 614-15 (2005) (upholding jury instruction stating, inter alia, that jury may not consider or speculate whether the plaintiff had received benefits from health insurance coverage).
. In re Goldman, 151 N.H. 770, 773 (2005) (quotations omitted).
. Rallis v. Demoulas Super Markets, 159 N.H. 95, 98 (2009).
. Francoeur v. Piper, 146 N.H. 525, 529 (2001).
. State v. Tyler, 158 N.H. 776, 778 (2009).
. See Broderick v. Watts, 136 N.H. 153, 165 (1992) (affirming trial judge’s refusal to instruct jury on matter not at issue in the case); Colby v. Avery, 93 N.H. 250, 256 (1945) (trial court properly declined to instruct jury on matter not at issue because “there was no occasion for the court to distract the jury's minds with reference to a non-existent issue.”).
. See Francoeur, 146 N.H. at 531-32 (reversing defense verdict in medical negligence case because trial court’s “error in judgment” instruction was reasonably capable of confusing or misleading the jury).
. Gero v. Campbell, No. 216-2010-CV-0383 (Stafford County Superior Court, November 26, 2012).