               IN THE COURT OF APPEALS OF TENNESSEE
                            AT JACKSON
                                April 19, 2016 Session

                JEAN DEDMON v. DEBBIE STEELMAN, ET AL.

         Interlocutory Appeal from the Circuit Court for Crockett County
                       No. 3228   Clayburn Peeples, Judge


                 No. W2015-01462-COA-R9-CV – Filed June 2, 2016


This interlocutory appeal requires review of a ruling on a motion in limine in a personal
injury case. Prior to trial, the plaintiffs submitted expert testimony from a treating
physician to establish the reasonableness of their claimed medical expenses. The
defendants filed a motion in limine seeking to exclude evidence of what they deemed
―unreasonable‖ medical expenses. They argued that the Tennessee Supreme Court‘s
decision in West v. Shelby County Healthcare Corporation, 459 S.W.3d 33 (Tenn. 2014),
established a new standard in Tennessee for determining the reasonable amount of
medical expenses as a matter of law. The trial court granted the defendants‘ motion in
limine, thus excluding the testimony of the treating physician. For the following reasons,
the trial court‘s order is reversed and this matter is remanded for further proceedings.

  Tenn. R. App. P. 9 Interlocutory Appeal by Permission; Judgment of the Circuit
                          Court Reversed and Remanded

BRANDON O. GIBSON, J., delivered the opinion of the court, in which ANDY D. BENNETT,
J., joined. JOE G. RILEY, Sp. J. filed a concurring opinion.

Glenn Keith Vines, Jr., Kevin Neil Grahm, and Mark Norman Geller, Memphis,
Tennessee, for the appellant, Jean Dedmon.

Melanie M. Stewart, Memphis, Tennessee, for the appellees, Debbie Steelman and Danny
T. Cates, Sr.

W. Bryan Smith, Memphis, Tennessee, John Vail, Washington, D.C. and Brian G.
Brooks, Greenbrier, Arkansas, for the Amicus Curiae Tennessee Association for Justice.

Bradford Box and Adam Phillip Nelson, Jackson, Tennessee, for the Amicus Curiae
Tennessee Defense Lawyers Association.
                                        OPINION

                          I. FACTS & PROCEDURAL HISTORY

      Jean and Fred Dedmon (collectively, ―Plaintiffs‖) filed this lawsuit against John T.
Cook, seeking to recover for injuries arising out of a car accident. Plaintiffs alleged that
Mrs. Dedmon incurred medical expenses totaling $52,482.87, and they attached her
medical bills to the complaint. Defendant Cook filed an answer specifically denying that
the medical bills attached to the complaint were reasonable or necessary.

      Defendant Cook died during the litigation, and Plaintiffs filed an amended
complaint naming as defendants the co-representatives of his estate, Debbie Steelman and
Danny Cates, Sr. (―Defendants‖). The amended complaint sought general compensatory
damages but did not reference or itemize the previously attached medical bills. No
medical bills were attached to the amended complaint.

       Plaintiffs subsequently deposed one of Mrs. Dedmon‘s treating physicians --
neurological surgeon Vaughan Allen. Dr. Allen testified that he had reviewed Mrs.
Dedmon‘s medical bills and found them to be appropriate, reasonable, and necessary. Dr.
Allen‘s deposition was filed in the trial court with the medical bills attached as exhibits.

       On December 19, 2014, the Tennessee Supreme Court issued its decision in West
v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014). Four weeks later,
Defendants filed a motion in limine seeking to exclude ―evidence of unreasonable
medical charges‖ based on the supreme court‘s West decision. Defendants acknowledged
that West involved interpretation of the Tennessee Hospital Lien Act, Tennessee Code
Annotated §§ 29-22-101 to -107. The parties acknowledge that this case does not involve
a hospital lien. Still, Defendants claimed that West defined the meaning of ―reasonable‖
medical expenses for tort cases by ―set[ting] forth a new standard in Tennessee, as a
matter of law.‖ Defendants argued that the medical bills previously submitted by
Plaintiffs and discussed by Dr. Allen should be disregarded, pursuant to West, and the
amounts the medical providers accepted in satisfaction of the bills should be deemed the
―reasonable‖ medical expenses instead. Specifically, Defendants argued,

       The Supreme Court in West has clearly stated that the reasonable medical
       expenses are defined as that which the medical provider accepts from
       medical insurance, as a matter of law. Therefore, the Plaintiff should not be
       allowed to introduce proof of any medical expense in excess of the amount
       accepted by her medical providers as payment in full.

According to Defendants‘ calculations, Plaintiffs‘ health insurer only paid $18,255.42 to
                                             2
satisfy Mrs. Dedmon‘s medical bills, so that amount, according to Defendants, was the
reasonable amount of her medical expenses.1

       Along with their motion in limine, Defendants also filed a ―Notice of Intent to
Rebut Presumption Pursuant to T.C.A. § 24-5-113.‖ They again claimed that the ―non-
discounted‖ medical bills provided by Plaintiffs were not reasonable under the West
standard.

       Plaintiffs filed a response in opposition to Defendants‘ motion in limine. Plaintiffs
asserted that Mrs. Dedmon had incurred, by that time, $57,668.87 in medical expenses, as
reflected by the original, undiscounted charges listed on her medical bills. They noted
Dr. Allen‘s testimony that these bills were reasonable and necessary for Mrs. Dedmon‘s
treatment. Plaintiffs argued that West was confined to the ―the limited purview of the
Tennessee Hospital Lien Act‖ and did not define reasonableness for medical expenses in
personal injury cases. Plaintiffs claimed that such an expansive reading of West ―would
violate statutes, legislative intent, established case law, the Collateral Source Rule, public
policy, and would lead to widely disparate, unfair results.‖ Aside from West, Plaintiffs
argued that existing Tennessee statutes and caselaw permitted them to prove the
reasonableness and necessity of their medical expenses through the testimony of Dr.
Allen, and therefore, the motion in limine to exclude such evidence should be denied.

       After a hearing, the trial court entered an order granting the Defendants‘ motion in
limine to exclude Plaintiffs‘ evidence of ―unreasonable medical charges.‖ The trial judge
characterized West as an effort by the Tennessee Supreme Court ―to say we are not going
to allow the subterfuge that the medical community uses with regard to insurance and
expenses to sully the court system, if you will.‖ The trial judge acknowledged that West
was decided under the Hospital Lien Act but said, ―I cannot imagine that they would use
any other logic in this situation than they used in that situation; so I‘m granting [the]
motion.‖ However, the trial court also granted Mrs. Dedmon permission to seek an
interlocutory appeal to this Court.2 On August 31, 2015, this Court entered an order
granting Mrs. Dedmon‘s application for an interlocutory appeal pursuant to Rule 9 of the

1
  Defendants itemized the medical bills within their motion but did not attach the actual bills or documents
reflecting the reduced amounts paid. However, Plaintiffs did not dispute that their bills were adjusted,
resulting in lower payments by their insurer. Instead, Plaintiffs argued that they should receive the benefit
of the adjustments rather than Defendants. Plaintiffs acknowledged that the introduction of evidence
regarding their insurance contract ―would lead to a lower judgment.‖
2
  The trial court granted permission to ―Plaintiff, Jean Dedmon,‖ to seek an interlocutory appeal, with no
mention of co-plaintiff Mr. Dedmon. In the brief filed on behalf of the appellant on appeal, Mrs. Dedmon
represents that Mr. Dedmon‘s claim was voluntarily dismissed without prejudice on November 14, 2014.
However, the record on appeal does not contain any order reflecting such a dismissal. In any event,
because the trial court and this Court granted permission to appeal only to Mrs. Dedmon, we will refer to
her singularly as ―Plaintiff‖ for the remainder of this opinion.
                                                       3
Tennessee Rules of Appellate Procedure.


                                             II. ISSUE PRESENTED

        Plaintiff presents the following issue for review on appeal:

        Whether the Supreme Court‘s decision in West v. Shelby County
        Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014) is limited to the Hospital
        Lien Act or is it also applicable to personal injury actions filed directly
        against the alleged tortfeasor?

For the following reasons, we reverse the decision of the circuit court and remand for
further proceedings.3

                                     III. STANDARD OF REVIEW

       This interlocutory appeal stems from an order of the trial court granting a motion
in limine. This Court reviews a trial court‘s decision to admit or exclude evidence,
including a ruling on a motion in limine, under the abuse of discretion standard of review.
Mercer v. Vanderbilt Univ., Inc., 134 S.W.3d 121, 131 (Tenn. 2004); Allen v. Albea, 476
S.W.3d 366, 377 (Tenn. Ct. App. 2015). A trial court abuses its discretion when it
applies an incorrect legal standard or reaches a decision that is against logic or reasoning
that causes an injustice to the party complaining. Mercer, 134 S.W.3d at 131 (citing
Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)). ―‗A trial court that premises its
analysis on an erroneous understanding of the governing law acts outside its discretion.‘‖
Wicker v. Comm’r, 342 S.W.3d 35, 37 (Tenn. Ct. App. 2010) (quoting Gov’t Employees
Ins. Co. v. Bloodworth, No. M2003-02986-COA-R10-CV, 2007 WL 1966022, at *5-6
(Tenn. Ct. App. June 29, 2007)).4 Thus, the abuse of discretion standard requires us to
determine whether the trial court‘s discretion was guided by an erroneous legal
conclusion. Whether the trial court used an incorrect legal standard in making its
decision is a question of law reviewed de novo. Wicker, 342 S.W.3d at 37.




3
  We acknowledge and appreciate the excellent amicus curiae briefs submitted by the Tennessee Defense
Lawyers Association and the Tennessee Association for Justice.
4
  When a trial court applies an incorrect legal principle, reversal is required ―‗even though such a reversal
does not indicate any ‗abuse‘ as that word is commonly understood.‘‖ Wicker, 342 S.W.3d at 37 (quoting
Bloodworth, 2007 WL 1966022, at *5-6).
                                                       4
                                    IV. DISCUSSION

                       A. Existing Tennessee Law on Damages

       ―‗A person who is injured by another‘s negligence may recover damages from the
other person for all past, present, and prospective harm.‘‖ Rye v. Women’s Care Ctr. of
Memphis, MPLLC, 477 S.W.3d 235, 267 (Tenn. 2015) (quoting Singh v. Larry Fowler
Trucking, Inc., 390 S.W.3d 280, 287-88 (Tenn. Ct. App. 2012)). An award of damages is
intended to make a plaintiff whole and compensates the plaintiff for damages or injury
caused by a defendant‘s wrongful conduct. Meals ex rel. Meals v. Ford Motor Co., 417
S.W.3d 414, 419 (Tenn. 2013) (citing Inland Container Corp. v. March, 529 S.W.2d 43,
44 (Tenn. 1975)). ―The party seeking damages has the burden of proving them.‖
Overstreet v. Shoney’s, Inc., 4 S.W.3d 694, 703 (Tenn. Ct. App. 1999) (citing Inman v.
Union Planters Nat’l Bank, 634 S.W.2d 270, 272 (Tenn. Ct. App. 1982)). The amount of
damages to be awarded, where the amount is within the limits set by law, is a question of
fact. Beaty v. McGraw, 15 S.W.3d 819, 828-29 (Tenn. Ct. App. 1998) (citing Spence v.
Allstate Ins. Co., 883 S.W.2d 586, 594 (Tenn. 1994); Reagan v. Wolsieffer, 34 Tenn.App.
537, 542, 240 S.W.2d 273, 275 (1951)).


        ―A plaintiff may be compensated for any economic or pecuniary losses that
naturally result from the defendant‘s wrongful conduct,‖ including past medical
expenses. Meals, 417 S.W.3d at 419. ―In personal injury actions such as this one, a
plaintiff may recover only those reasonable medical expenses that were necessary to treat
the injury caused by the defendant‘s negligence.‖ Street v. Levy (Wildhorse) Ltd. P’ship,
No. M2002-02170-COA-R3-CV, 2003 WL 21805302, at *4 (Tenn. Ct. App. Aug. 7,
2003). In other words, an injured plaintiff is entitled to recover for ―reasonable and
necessary medical expenses‖ associated with the treatment of the injury. Stricklan v.
Patterson, No. E2008-00203-COA-R3-CV, 2008 WL 4791485, at *4 (Tenn. Ct. App.
Nov. 4, 2008); Roberts v. Davis, No. M2000-01974-COA-R3-CV, 2001 WL 921903, at
*4 (Tenn. Ct. App. Aug. 7, 2001). Recovery may be denied for expenses that the jury
determines were unreasonable or unnecessary. Watson v. Payne, 359 S.W.3d 166, 169-
70 (Tenn. Ct. App. 2011) (citing Brown v. Chesor, 6 S.W.3d 479, 484 (Tenn. Ct. App.
1999)).


        The injured plaintiff bears the burden of proving that the medical expenses he or
she is seeking to recover are necessary and reasonable. Borner v. Autry, 284 S.W.3d 216,
218 (Tenn. 2009). ―In all but the most obvious and routine cases, plaintiffs must present
competent expert testimony to meet this burden of proof.‖ Id.; see also Monypeny v.
Kheiv, No. W2014-00656-COA-R3-CV, 2015 WL 1541333, at *27 (Tenn. Ct. App. Apr.

                                           5
1, 2015) (no perm. app. filed); Al-Athari v. Gamboa, No. M2013-00795-COA-R3-CV,
2013 WL 6908937, at *3 (Tenn. Ct. App. Dec. 30, 2013). Generally, in order to recover
for medical expenses, ―expert opinion must be offered regarding the reasonableness and
necessity of the physician‘s services and charges.‖ Stricklan, 2008 WL 4791485, at *4
(citing Roberts, 2001 WL 921903 at * 4). ―A physician who is familiar with the extent
and nature of the medical treatment a party has received may give an opinion concerning
the necessity of another physician‘s services and the reasonableness of the charges.‖
Long v. Mattingly, 797 S.W.2d 889, 893 (Tenn. Ct. App. 1990) (citing Employers Ins. of
Wausau v. Carter, 522 S.W.2d 174, 176 (Tenn. 1975)). In order to be qualified to render
these opinions, the physician must demonstrate ―(1) knowledge of the party‘s condition,
(2) knowledge of the treatment the party received, (3) knowledge of the customary
treatment options for the condition in the medical community where the treatment was
rendered, and (4) knowledge of the customary charges for the treatment.‖ Id. (citing
Nash v. Carter, App. No. 87-192-11, Slip op. at 13, 1987 WL 19312 (Tenn. Ct. App.
Nov. 4, 1987)).


        Tennessee Code Annotated section 24-5-113(a) assists plaintiffs ―for whom the
expense of deposing an expert may exceed the value of the medical services for which
recovery is sought.‖ Borner, 284 S.W.3d at 218. The statute provides a rebuttable
presumption that medical bills itemized in and attached to the complaint are necessary
and reasonable if the total amount of such bills does not exceed $4,000. Id. at 217.
However, the presumption may be rebutted by proof contradicting either the necessity or
reasonableness of the medical expenses. Id. at 218. Alternatively, subsection (b) of the
statute provides a rebuttable presumption of reasonableness where a plaintiff serves upon
the defendant at least 90 days prior to the date set for trial an itemization or copies of
medical bills that were paid or incurred. Iloube v. Cain, 397 S.W.3d 597, 604 (Tenn. Ct.
App. 2012).


                          B. Litigation in other Jurisdictions

        Historically, the ―reasonableness‖ of medical expenses was rarely controversial.
Michael K. Beard & Dylan H. Marsh, Arbitrary Healthcare Pricing & the Misuse of
Hospital Lien Statutes by Healthcare Providers, 38 Am. J. Trial Advoc. 255, 272 (2014).
Physicians‘ testimony that medical charges were customary and reasonable was typically
accepted proof of reasonableness. Id. at 273. In recent years, however, the issue of what
constitutes a reasonable medical charge or expense has been the subject of increased
litigation due to the increased involvement of governmental payors, the complexity of
health care reimbursement provisions, financial pressures on hospitals, and the
significance of medical expense recovery in personal injury litigation. Id.

                                            6
        Several courts have recently considered the issue of how to determine the
reasonable value of medical services when the injured plaintiff‘s medical expense is paid
by an insurer or government payor at a discounted rate.5 For instance, the California
Supreme Court has held that an injured person may not recover as economic damages for
past medical expenses the undiscounted sum stated in the provider‘s bill but never paid
by or on behalf of the injured person, as damages are awarded to compensate for loss, and
the injured person does not suffer any economic loss in that amount. Howell v. Hamilton
Meats & Provisions, Inc., 257 P.3d 1130, 1133 (Cal. 2011). Conversely, the Supreme
Court of Appeals of West Virginia has held that a plaintiff may recover the entire
reasonable value of medical services necessarily required by the injury, and he or she is
not limited to the expenditures actually made or the obligations incurred. Kenney v.
Liston, 760 S.E.2d 434, 446 (W. Va. 2014). The West Virginia court reasoned that the
tortfeasor should not receive the benefit of any reduced, discounted, or written-off
amounts. Id. Some courts have formulated rules that fall between these two approaches.
For example, the Ohio Supreme Court has held that both the amount billed and the
amount paid should be allowed into evidence to enable the jury to determine the
reasonable value of medical services at either of those amounts or some amount in
between.6 Robinson v. Bates, 857 N.E.2d 1195, 1200 (Ohio 2006). Some state
legislatures have addressed the issue as well. See, e.g., Tex. Civ. Prac. & Rem. Code
Ann. § 41.0105 (providing that ―recovery of medical or health care expenses incurred is
limited to the amount actually paid or incurred by or on behalf of the claimant‖).


5
  The ―charge master‖ or billed rate is vastly different than the amount actually paid by insurers. See Todd
R. Lyle, Phantom Damages and the Collateral Source Rule: How Recent Hyperinflation in Medical Costs
Disturbs South Carolina’s Application of the Collateral Source Rule, 65 S.C. L. Rev. 853, 877 (2014)
(reporting that list prices are at least double and may be up to eight times what the hospital accepts from
Medicare, Medicaid, health maintenance organizations, or private insurers as payment in full for the same
service); George A. Nation III, Determining the Fair and Reasonable Value of Medical Services: The
Affordable Care Act, Government Insurers, Private Insurers and Uninsured Patients, 65 Baylor L. Rev.
425, 431 (2013) (reporting that discounts from charge master prices given to insurers average overall
about 62 percent). In addition, some hospitals voluntarily discount the bills of uninsured patients to bring
them closer to the contractually discounted reimbursement rates. 65 Baylor L. Rev. at 435. According to
one author, less than five percent of patients, nationally, actually pay the full amount. 65 S.C. L. Rev. at
867.
6
  As some courts have noted, allowing evidence that a medical bill was satisfied for a lower amount does
not necessarily require evidence that the payment was made by a collateral source such as insurance. For
example, the Supreme Court of Kansas explained that a jury could hear that ―the hospital will accept
$5,000 to satisfy its bill of $70,000,‖ or ―$5,000 has paid this $70,000 bill in full,‖ without being told of
the source of the payment. Martinez v. Milburn Enterprises, Inc., 233 P.3d 205, 226 (Kan. 2010). The
Supreme Court of Indiana similarly held that ―adjustments or accepted charges for medical services may
be introduced into evidence without referencing insurance.‖ Stanley v. Walker, 906 N.E.2d 852, 858 (Ind.
2009).
                                                       7
       It is not necessary for purposes of this opinion to catalog the various other
approaches taken in additional jurisdictions. It suffices to say that the subject is hotly
disputed, and courts have reached many different conclusions on the issues involved,
often in divided opinions. See 2 Stein on Personal Injury Damages Treatise 7:36 (3d ed.)
(―there is no consensus on the appropriate rule among the [] courts that have reached the
question‖).7


                          C. The Tennessee Supreme Court’s West Decision

       West involved the interpretation and application of Tennessee‘s statutes governing
hospital liens. West, 459 S.W.3d at 41. The hospital at issue treated injured patients and
received from the patients‘ insurance companies the full amount of the adjusted charges
for the patients‘ care in accordance with the insurance companies‘ existing contracts with
the hospital. Id. at 37. However, the hospital also attempted to use hospital liens to
pursue payment of the unadjusted cost of the medical services from any third-party
tortfeasors who caused the injuries to the patients. Id. If the hospital was able to collect
the full unadjusted cost from a third-party tortfeasor, directly or from the patient‘s
recovery from the third-party tortfeasor, it refunded any payments received from the
patient‘s insurance company and released its lien. Id. at 38.


      Patients filed suit to challenge this practice. The controlling provision of the
Hospital Lien Act provided:

7
 In other contexts, Tennessee courts have acknowledged the separation between amounts billed by
medical providers and the amounts actually accepted by medical providers, with varying results. See,
e.g., State v. Moffitt, No. W2014-02388-CCA-R3-CD, 2016 WL 369379, at *6 (Tenn. Crim. App. Jan. 29,
2016) (perm. app. pending) (holding that a defendant was not required to pay restitution for a victim‘s
medical expenses in the amount shown on the victim‘s hospital bill because the amount was either
covered by insurance or ―written off‖ by the hospital, so the victim suffered no actual loss); River Park
Hosp., Inc. v. BlueCross BlueShield of Tenn., Inc., 173 S.W.3d 43, 60 (Tenn. Ct. App. 2002) (involving a
claim of quantum meruit or unjust enrichment based on emergency services provided by a hospital and
concluding that a ―reasonable‖ rate for the medical services should be set based on consideration of
numerous factors, including the hospital‘s full standard rate and the reimbursement rate customarily paid
by other providers, as both rates were pertinent but neither was conclusive or determinative); State Auto.
Mut. Ins. Co. v. Hurley, 31 S.W.3d 562, 563-66 (Tenn. Workers Comp. Panel 2000) (holding that a
worker‘s compensation plaintiff was not entitled to receive damages for the full undiscounted amount of
her medical bills when her insurer paid only a fraction of that amount in full settlement of the total bill);
see also Doe v. HCA Health Servs. of Tenn., Inc., 46 S.W.3d 191, 198 (Tenn. 2001) (holding that various
factors should be considered to determine the ―reasonable value‖ of medical goods and services provided
by a hospital to a patient in the absence of an enforceable contract, including ―the hospital‘s internal
factors as well as the similar charges of other hospitals in the community‖).

                                                     8
      Every person, firm, association, corporation, institution, or any
      governmental unit, including the state of Tennessee, any county or
      municipalities operating and maintaining a hospital in this state, shall have
      a lien for all reasonable and necessary charges for hospital care, treatment
      and maintenance of ill or injured persons upon any and all causes of action,
      suits, claims, counterclaims or demands accruing to the person to whom
      such care, treatment or maintenance was furnished, or accruing to the legal
      representatives of such person in the case of such person‘s death, on
      account of illness or injuries giving rise to such causes of action or claims
      and which necessitated such hospital care, treatment and maintenance.


Id. at 43 (quoting Tenn. Code Ann. § 29-22-101(a)) (emphasis added). The Tennessee
Supreme Court interpreted this statute with the following explanation:


      By its plain terms, this language limits the application of the lien to ―all
      reasonable and necessary charges for hospital care, treatment and
      maintenance of ill or injured persons.‖ A hospital‘s charges and a patient‘s
      debt are two sides of the same coin. After all, a debt is nothing more than
      charges that have not been paid. Thus, our first task is to determine what
      ―all reasonable and necessary charges for hospital care, treatment and
      maintenance of ill or injured persons‖ includes.
             The debt the patient owes to the hospital must be based on
      ―reasonable and necessary charges.‖ Tenn. Code Ann. § 29-22-101(a). The
      concept of ―reasonable and necessary‖ medical expenses is well known to
      the bench and bar. Employees who sustain work-related injuries are entitled
      to have their employer pay the ―necessary and reasonable medical
      expenses‖ arising from the injury. Hubble v. Dyer Nursing Home, 188
      S.W.3d 525, 537 (Tenn. 2006); Moore v. Town of Collierville, 124 S.W.3d
      93, 99 (Tenn. 2004). Similarly, recoveries for medical expenses in personal
      injury cases are limited to those expenses that are ―reasonable and
      necessary.‖ Roberts v. Davis, No. M2000-01974-COA-R3-CV, 2001 WL
      921903, at *4 (Tenn. Ct. App. Aug. 7, 2001) (No Tenn. R. App. P. 11
      application filed). Finally, among the categories of damages that can be
      awarded in health care liability actions is the ―cost of reasonable and
      necessary medical care.‖ Tenn. Code Ann. § 29-26-119 (2012).
              In these contexts, and in the context of the HLA, ―necessary‖ limits
      the charges to the cost of the medical care that was or will be required to
      treat the injury. Street v. Levy (Wildhorse) Ltd. P’ship, No. M2002-02170-
                                           9
COA-R3-CV, 2003 WL 21805302, at *4 (Tenn. Ct. App. Aug. 7, 2003)
(No Tenn. R.App. P. 11 application filed); see also Sibbing v. Cave, 922
N.E.2d 594, 604 (Ind. 2010). There is no indication in this record that the
parties disagreed with regard to the necessity of the medical services the
[hospital] provided to [the plaintiffs]. Accordingly, for the purpose of this
opinion, we deem the medical services provided to [the plaintiffs], and
therefore the medical charges, necessary.
        There is likewise no indication that the parties disagreed that the
medical services the [hospital] provided to [the plaintiffs] were reasonable,
in the sense that they were proportionate to the injuries [the plaintiffs]
sustained. However, the record does reflect that the parties disagreed about
the reasonableness of the amount of the [hospital‘s] charges for these
services. This is understandable because the [hospital] had two versions of
its costs—one for [the plaintiffs] and their insurance companies and another
for the lien and the third-party tortfeasor. Accordingly, we must decide
which version of the [hospital‘s] costs is the reasonable cost for the purpose
of Tenn. Code Ann. § 29-22-101(a).
        The presumption in Tenn. Code Ann. § 24-5-113(a)(1) (2000) that
itemized medical bills are necessary and reasonable does not apply to this
case. That presumption applies only to personal injury actions brought in
any court by injured parties against the persons responsible for causing
their injuries. Tenn. Code Ann. § 24-5-113(a)(2). In addition, the
presumption does not apply when the total cost of the medical bills exceeds
$4,000. Tenn. Code Ann. § 24-5-113(a)(3). The claims made by [the
plaintiffs] are not personal injury claims against the persons who caused
their injuries, and the amount of each claim exceeded $4,000. Accordingly,
we must assess the reasonableness of the [hospital‘s] charges without the
presumption that they are reasonable.
        The [hospital‘s] non-discounted charges reflected in the amount of
the liens it filed against [the plaintiffs] should not be considered reasonable
charges for the purpose of Tenn. Code Ann. § 29-22-101(a) for two
reasons. First, the amount of these charges is unreasonable because it does
not ―reflect what is [actually] being paid in the market place.‖ Because
―virtually no public or private insurer actually pays full charges[,] ... [a]
more realistic standard is what insurers actually pay and what the hospitals
[are] willing to accept.‖ See also Howell v. Hamilton Meats & Provisions,
Inc., 52 Cal.4th 541, 129 Cal.Rptr.3d 325, 257 P.3d 1130, 1144 (2011)
(noting that ―a medical care provider‘s billing price for particular services is
not necessarily representative of either the cost of providing those services
or their market value‖); Provena Covenant Med. Ctr. v. Department of
                                      10
      Revenue, 236 Ill.2d 368, 339 Ill. Dec. 10,925 N.E.2d 1131, 1150 (2010)
      (noting that the hospital‘s ―established‖ rates were more than double the
      actual costs of the care).
              The second basis for concluding that the [hospital‘s] non-discounted
      charges are not reasonable stems from its contracts with [the insurers]. The
      [hospital] furthered its own economic interest when it agreed in these
      contracts to discount its charges for patients insured by [the insurers].
      Howell v. Hamilton Meats & Provisions, Inc., 129 Cal.Rptr.3d 325, 257
      P.3d at 1144 (noting that ―[i]nsurers and medical providers negotiate rates
      in pursuit of their own business interests‖); see also Palmyra Park Hosp.,
      Inc. v. Phoebe Putney Mem’l Hosp., 604 F.3d 1291, 1295 (11th Cir. 2010)
      (noting that hospitals enter into contracts with private insurers expecting an
      increase in the number of the insurer‘s policy holders as patients); Galvan
      v. Northwestern Mem’l Hosp., 382 Ill.App.3d 259, 321 Ill.Dec. 10,888
      N.E.2d 529, 538-39 (2008) (noting that a hospital‘s contract with an insurer
      benefits the hospital because payment is guaranteed).
             We have already held that persons insured by an insurance company
      are intended third-party beneficiaries of the contract between their
      insurance company and a hospital. Benton v. Vanderbilt Univ., 137 S.W.3d
      614, 620 (Tenn. 2004). Thus, with regard to an insurance company‘s
      customers, ―reasonable charges‖ are the charges agreed to by the insurance
      company and the hospital. Nishihama v. City & Cnty. of San Francisco, 93
      Cal.App.4th 298, 112 Cal.Rptr.2d 861, 867 (2001); Hoffman v. Travelers
      Indem. Co. of Am., 2013–1575, p. 10 (La. 5/7/2014); 144 So.3d 993, 1000.
      The [hospital‘s] contract with [the insurers] defined what the reasonable
      charges for the medical services provided to [the plaintiffs] would be.


West, 459 S.W.3d at 43-46 (footnotes omitted). In a footnote within this section, the
supreme court further noted:


             Just months ago, the Supreme Court of West Virginia upheld a
      damages award based on the hospital‘s posted costs rather than on the
      actual amount that the hospital accepted in full payment for the services it
      provided. Kenney v. Liston, 233 W.Va. 620, 760 S.E.2d 434, 440 (2014).
      Justice Loughry noted in dissent:
                    Given the current complexities of health care pricing
             structures, it is simply absurd to conclude that the amount
             billed for a certain procedure reflects the ―reasonable value‖
             of that medical service. Like retailers who raise the price of
                                           11
              their goods by twenty-five percent before having a ten percent
              off sale, medical providers utilize the same sort of tactic to
              ensure a profit. In fact, ―[b]ecause so many patients, insured,
              uninsured, and recipients under government health care
              programs, pay discounted rates, hospital bills have been
              called ‗insincere,‘ in the sense that they would yield truly
              enormous profits if those prices were actually paid.‖
       Kenney v. Liston, 760 S.E.2d at 451 (Loughry, J., dissenting) (quoting
       Howell v. Hamilton Meats & Provisions, Inc., 129 Cal.Rptr.3d 325, 257
       P.3d at 1142).


Id. at 45 n.14.

                               D. The Application of West

         Defendants argue that the West decision now controls the definition of reasonable
medical expenses in personal injury litigation. They claim that the court ―made a
purposeful choice of words‖ in referencing the familiarity of the bench and bar with the
concept of reasonable charges and in noting that recovery for medical expenses in
personal injury cases is also limited to expenses that are ―reasonable and necessary.‖
They also note that the supreme court cited approvingly the Howell case in which the
Supreme Court of California considered the concept of reasonable medical expenses in
the context of personal injury litigation. The court also cited the dissent in Kenney.
Thus, Defendants claim that, by citing these cases, the supreme court in West
―specifically contemplate[d]‖ the use of its definition of reasonable medical expenses in
tort litigation. Plaintiff, however, claims that the West decision only defined reasonable
medical charges for the purposes of the Hospital Lien Act.


        Tennessee trial courts have reached opposite conclusions as to the impact of West
on Tennessee tort law. According to the parties‘ submissions on appeal, four Tennessee
trial courts have interpreted West narrowly as applying only within the context of the
Hospital Lien Act, while four others have interpreted it broadly as also defining the
concept of reasonable medical expenses in personal injury litigation. At least three
federal district court opinions have interpreted West as defining the standard of
reasonableness for medical expenses in personal injury litigation. See Smith v. Lopez-
Miranda, No. 15-CV-2240-SHL-DKV, 2016 WL 1083845, at *1-3 (W.D. Tenn. Feb. 10,
2016); Hall v. USF Holland, Inc., No. 2:14-CV-02494, 2016 WL 361583, at *2 (W.D.
Tenn. Jan. 12, 2016); Keltner v. U.S., No. 2:13-CV-2840-STA-DKV, 2015 WL 3688461,
at *3-5 (W.D. Tenn. June 12, 2015).
                                            12
        Having carefully reviewed the West opinion, we must agree with Plaintiff on this
issue. The supreme court in West said ―we must decide which version of the [hospital‘s]
costs is the reasonable cost for the purpose of Tenn. Code Ann. § 29-22-101(a).‖ 459
S.W.3d at 44 (emphasis added). That was the issue before the court and the one it
resolved. The court concluded that ―[the hospital‘s] non-discounted charges . . . should
not be considered reasonable charges for the purpose of Tenn. Code Ann. § 29-22-
101(a)[.]‖ Id. (emphasis added). We reject any assertion that the supreme court meant
for its holding in West, standing alone, to control all determinations of reasonableness
with regard to medical expenses under Tennessee law. In fact, the supreme court
cautioned that ―[n]othing in this opinion should be construed to apply to hospital liens
filed against patients who are TennCare enrollees.‖ Id. at 39 n.2. If the court did not
intend for its opinion to apply to hospital liens in all circumstances, surely the court did
not intend for its opinion to be binding as to all determinations of reasonable medical
expenses under Tennessee law.


        Aside from our conclusion regarding the direct holding of West, Defendants and
their amicus supporter essentially urge this Court to extend the reasoning of West to
personal injury litigation. They claim that it is illogical to conclude that a plaintiff can
recover a negotiated price differential as a ―reasonable medical expense,‖ even if the
plaintiff never incurred the expense, while the hospital that actually provided the medical
care is prohibited from pursuing the same amount through a hospital lien. This appears to
be the approach taken by the trial judge, as he said, ―I cannot imagine that [the supreme
court] would use any other logic in this situation than they used in [the West] situation.‖
That may be true. The Tennessee Supreme Court may very well consider this issue and
decide that the same reasoning it employed in West in the context of the hospital lien
statute should apply to personal injury cases. It may not. In the absence of any such
ruling, however, it is not the role of this Court to overturn or overlook existing caselaw
based on speculation about whether the supreme court would extend the reasoning of
West to this situation.


       As noted earlier in this opinion, under Tennessee law as it currently exists,
―[d]amages in personal injury cases are not measured by ‗fixed rules of law‘ but rest[]
largely in the discretion of the trier of fact.‖ Roberts, 2001 WL 921903, at *4.
According to the Tennessee Supreme Court, ―[i]n all but the most obvious and routine
cases, plaintiffs must present competent expert testimony‖ to prove that the medical
expenses he or she is seeking to recover are necessary and reasonable. Borner, 284
S.W.3d at 218. ―A physician who is familiar with the extent and nature of the medical
treatment a party has received may give an opinion concerning . . . the reasonableness of
the charges.‖ Long, 797 S.W.2d at 893; see also Wells ex rel. Baker v. State, 435 S.W.3d
734, 742 (Tenn. Ct. App. 2013) (quoting Long); Roberts, 2001 WL 921903, at *4
                                            13
(―physicians familiar with the extent and nature of the plaintiff‘s medical treatment can
give an opinion regarding the reasonableness of the physician‘s services and charges‖).
       Defendants‘ proposed expansion of West would create a new system that allows
the amount accepted by medical providers in satisfaction of the bills to be deemed
reasonable as a matter of law. For example, according to Defendants, Plaintiff should
not be allowed to introduce proof of any medical expenses in excess of the amount
accepted as payment in full by her medical providers. Thus, Defendants‘ proposal would
require exclusion of a physician‘s testimony that the amount of charges billed represents
a reasonable value. Such an approach is incompatible with the standards set forth in
existing Tennessee caselaw. For instance, Long clearly recognizes that a physician may
give an opinion concerning the reasonableness of medical charges. It is controlling on
this Court until reversed or modified. See Tenn. R. Sup. Ct. 4(G)(2) (―Opinions reported
in the official reporter [] shall be considered controlling authority for all purposes unless
and until such opinion is reversed or modified by a court of competent jurisdiction.‖).


        We recognize Plaintiffs‘ argument that Defendants are barred from introducing
evidence of any discounted medical bills based on this Court‘s decision in Fye v.
Kennedy, 991 S.W.2d 754 (Tenn. Ct. App. 1998). Fye was a wrongful death case arising
out of an auto accident. Id. at 756. The trial judge allowed the plaintiff to present
evidence of a medical bill reflecting total charges in the amount of $748,384.08 despite
the defendant‘s argument that the plaintiff should have been limited to proving $75,264,
the portion of the bill actually paid by Medicaid. Id. at 762. Although the parties did not
cite any statutory, regulatory, or contractual basis for it, ―the balance of the bill was, in
some way, legally forgiven.‖ Id. The court of appeals defined the issue as ―whether,
since the balance of the bill was forgiven, the plaintiff is entitled to recover the fair value
of the services rendered as opposed to the actual amount paid by Medicaid.‖ Id. The
defendants argued that because $673,120.08 of the bill was forgiven, that portion of the
bill should be treated ―as no bill at all rather than as an expense.‖ Id. at 763. The court
discussed the right of an injured party to recover ―reasonable and necessary‖ medical
expenses and the application of the collateral source rule.8 Id. The court explained that
―[i]n Tennessee, the focus has always been on the ‗reasonable‘ value [of the] services
rendered.‖ Id. at 764. The court compared the bill forgiveness to a gratuity from a
collateral source and concluded that the jury was not entitled to know about the portion of
the bill that was not actually paid. Id.



8
 Under the collateral source rule, ―benefits received by a plaintiff from a source wholly independent of
and collateral to the tortfeasor, as a result of the injury inflicted, will not diminish the damages otherwise
recoverable from the defendant.‖ Nance by Nance v. Westside Hosp., 750 S.W.2d 740, 742 (Tenn. 1988).

                                                     14
       Although the Fye case is factually similar to the scenario we are considering on
appeal, the Fye court was not asked to consider the precise issue now before us. In its
discussion, the Fye court expressly noted that a defendant is permitted to introduce
relevant evidence regarding the reasonableness of a medical expense, and the court
pointed out that, in the case before it, ―[t]here [was] no suggestion that the hospital bill
for $748,384.08 [was] other than ‗reasonable.‘‖ Id. at 764. As the full amount of the
medical bill was concededly necessary and reasonable, the court concluded that the jury
was entitled to consider the full amount of the bill rather than the lesser amount paid by
Medicaid.9 Fye does not control the issue of whether the amount accepted by a medical
provider bears on the reasonableness of the medical expense.10 We also find Fye
distinguishable because of the nature of the bill reduction in that case. In Fye, the
hospital submitted the bill to Medicaid with the understanding that it would not seek to
recoup the balance, beyond what Medicaid paid, from the patient or any other source.
Because the parties did not present the Court with any statutory, regulatory, or

9
    We note that Judge Goddard disagreed with the majority and wrote the following in his dissent:

                    I concur in all of the issues addressed in the majority opinion except the one
           questioning the Trial Court‘s permitting the Plaintiff to prove the entire bill from
           Erlanger Medical Center.
                    I recognize that Judge Susano has set out considerable authority to support the
           position reached by the majority. However, it appears this is a question of first impression
           in Tennessee and I cannot concur that the law should enable an injured plaintiff to be able
           to prove and, presumably, recover monetary damages for medical expenses which he has
           in fact not incurred, much less paid or became obligated to pay.
                    Assume, for instance, that in the case at bar the deceased had only received a
           relatively minor injury from which she fully recovered. However, the cost of her
           treatment and convalescence totaled $250,000, but she was only charged and obligated to
           pay the sum of $2500. Would she then be entitled to prove the $250,000 as a part of her
           damages? I think not. In my view, fundamental fairness requires a different resolution
           than that reached by the majority opinion.
                    I would hold that the introduction of the Erlanger bill was prejudicial error and . .
           . remand the case for trial as to liability and damages, which would include only those
           medical bills which were paid or there was an obligation to pay.

Fye, 991 S.W.2d at 765.
10
   This Court also considered the issue of discounted medical expenses in a personal injury action in
Bowers by Bowers v. City of Chattanooga, 855 S.W.2d 583, 586 (Tenn. Ct. App. 1992). The plaintiff was
awarded as damages $26,801.16, representing medical expenses he testified he incurred as a result of an
accident involving his son. Id. at 584. The defendant asserted that the plaintiff was only entitled to
compensation for his actual out-of-pocket expenses, which amounted to $600, as the balance of the
expenses incurred was paid by the plaintiff‘s health insurance. Id. at 586. The court of appeals concluded
that the difference in expenses was ―a matter between [the plaintiff] and his insurance company‖ from
which the defendant ―should not benefit.‖ Id. at 587. Therefore, the full award of $26,801.16 for medical
expenses was affirmed. Id. Again, however, the court did not consider any argument regarding the
reasonableness of the medical expenses.
                                                     15
contractual basis for the forbearance, the Court concluded that the balance of the bill was
―in some way, legally forgiven,‖ and essentially a gratuity. The Court went on to discuss
the collateral source rule as it relates to gratuitous benefits and/or gratuitous medical care.
However, the case before us does not involve a gratuitous benefit or discount, so the
Court‘s analysis is not controlling on whether the collateral source rule applies to
discounted medical bills paid pursuant to a contract with a private insurer. In sum, under
the law as it presently exists in Tennessee, a plaintiff may present the testimony of a
physician who testifies that the amount of medical expenses billed or charged to a
plaintiff was reasonable. That is precisely what Plaintiff did in this case. As the expert‘s
testimony was admissible, its exclusion was improper. However, existing law in this
state also makes clear that Defendants are permitted to offer proof contradicting the
reasonableness of the medical expenses. See Borner, 284 S.W.3d at 218. However, in
doing so, they must not run afoul of the collateral source rule. See, e.g., Martinez v.
Milburn Enters., Inc., 233 P.3d 205, 222-223 (Kan. 2010) (―… the collateral source rule
bars admission of evidence stating that the expenses were paid by a collateral source.
However, the rule does not address, much less bar, the admission of evidence indicating
that something less than the charged amount has satisfied, or will satisfy, the amount
billed.‖); see also Stanley v. Walker, 906 N.E.2d 852, 858 (Ind. 2009). If the Tennessee
Supreme Court is inclined to extend the reasoning of West to personal injury litigation as
Defendants suggest, it is, of course, certainly free to do so, but this Court must apply the
law as it currently stands. We sincerely hope that the Tennessee Supreme Court will
review this case and consider the excellent arguments presented by both the parties, the
amici curiae on appeal, and the concurring opinion.


                                      V. CONCLUSION

      For the aforementioned reasons, the decision of the circuit court is hereby reversed
and remanded for further proceedings. Costs of this appeal are taxed to the appellees,
Debbie Steelman and Danny Cates, Sr., as co-representatives of the Estate of John T.
Cook, for which execution may issue if necessary.



                                                   _________________________________
                                                   BRANDON O. GIBSON, JUDGE




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