Indiana Contract

    By:  Kelly Scanlan

            In a recent decision, the Supreme Court of Indiana clarified what evidence litigants may introduce to assist juries in determining the “reasonable value of medical services.” In Stanley v. Walker, the Court did away with the notion that Indiana’s Collateral Source Statute precludes defendants from introducing discounted amounts paid and accepted for a plaintiff’s medical bills. Relying primarily on the realities of health care billing and finance, the Court held that “the collateral source statute does not bar evidence of discounted amounts in order to determine the reasonable value of medical services. To the extent the adjustments or accepted charges for medical services may be introduced into evidence without referencing insurance, they are allowed.”

            The Stanley opinion comes on the heels of the Supreme Court’s decision in Butler v. Indiana Dep’t of Ins., 904 N.E.2d 198 (Ind. 2009), in which the Court held that in wrongful death actions, the amount recoverable for reasonable medical and hospital expenses is the total amount ultimately accepted by health care providers after any billing adjustments, not the total originally billed. Due to the language of a settlement agreement between the parties in Butler, the Court did not reach the collateral source doctrine issue in that case. The narrow holding in Butler rested almost exclusively on the plain language of Indiana’s Adult Wrongful Death Statute. 

            Bose McKinney & Evans LLP filed amicus briefs on behalf of the Insurance Institute of Indiana in both appeals. Despite their differing underlying rationale, and the Court’s slightly more middle of the road approach in Stanley, both cases represent positive results for defendants in personal injury and medical malpractice cases in Indiana. These decisions will help ensure that juries are provided with accurate evidence regarding the amount of damages necessary to compensate plaintiffs for medical bills they are actually required to pay.