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12/31/97 JAYNET A. MOORHEAD ADMINISTRATRIX ESTATE

December 31, 1997

JAYNET A. MOORHEAD, ADMINISTRATRIX OF THE ESTATE OF CATHERINE B. BAXTER, DECEASED, APPELLANT; CROZER CHESTER MEDICAL CENTER, APPELLEE


Appeal from the Judgment entered December 13, 1996 In the Court of Common Pleas of Delaware County, Civil, No. 94-5637.

Before: Cirillo, P.j.e., Saylor, And Olszewski, JJ. Opinion BY Saylor, J. Olszewski, J., files a Dissenting Opinion.

The opinion of the court was delivered by: Saylor

OPINION BY SAYLOR, J.:

Filed December 31, 1997

Appellant, Jaynet A. Moorhead, administratrix of the estate of Catherine B. Baxter, deceased, appeals from the judgment entered against Appellee, Crozer Chester Medical Center, in this medical malpractice action. We affirm the judgment, although we do so for reasons which differ from those relied upon by the trial court.

Appellant's decedent, Catherine Baxter, was injured when she fell while a patient at Appellee's facility. Mrs. Baxter filed an action against Appellee, contending that her fall resulted from Appellee's negligence. Appellant was substituted as the plaintiff after Mrs. Baxter's death. Although the case was tried before a jury, the question of compensation for past medical expenses was reserved for the trial court. The jury returned a verdict in favor of Appellant, awarding the sum of $46,500.00 in non-economic damages, including pain and suffering.

Concerning past medical expenses, the agreed-upon facts are as follows *fn1 : The plaintiff's decedent was covered by Medicare and by a "Blue Cross 65" supplemental plan for which she had paid premiums. The fair and reasonable value of the medical care that Appellee furnished to the decedent after her fall was $108,668.31. The Medicare allowance for such care was $12,167.40, 80% of which was paid by Medicare and 20% of which was paid by Blue Cross 65. Pursuant to its voluntary participation in the Medicare program, Appellee accepted the Medicare allowance as payment in full. Appellee is not permitted to seek the remainder of the fair and reasonable cost of its services from Appellant or from any other source.

The question before the trial court was whether the correct measure of compensatory damages for medical expenses was the amount billed by the hospital or the amount received by the hospital as payment in full. Based on the stipulated facts, the trial court determined that Appellant's recovery for past medical expenses should be limited to $12,167.40, the amount allowed by Medicare and accepted by Appellee as payment in full. According to the trial court, case law assumes that the reasonable value of medical services equals the amount billed for those services, which in turn equals the amount that the plaintiff is contractually obligated to pay. The court reasoned that where the plaintiff is not obligated to pay the amount billed, it is not necessary to award that amount to the plaintiff in order to make the plaintiff whole. To the contrary, the court noted, doing so would allow the plaintiff to reap a windfall.

Accordingly, by order entered November 15, 1996, the trial court limited the amount of past medical expenses recoverable by Appellant to $12,167.40, the amount set by Medicare as payment in full. This amount was added to the jury verdict of $46,500.00 for a total verdict of $58,667.40. After the court awarded delay damages in the amount of $7,431.20, judgment was entered against Appellee in the amount of $66,098.60. This appeal followed.

On appeal, Appellant argues that the trial court's award of past medical expenses contravened the settled measure of compensatory damages and also violated the collateral source rule. Specifically, Appellant argues, as she did in the trial court, that under settled law a plaintiff is allowed to recover the fair and reasonable value of the medical care made necessary by the defendant's negligence--in this case, $108,668.31. According to Appellant, the total amount of the verdict should therefore be $155,168.31 ($108,668.31 plus $46,500.00, the amount of the jury verdict), plus delay damages.

Appellee argues that the amount of damages should equal but not exceed the loss to the decedent. In the present case, Appellee reasons, the amount of medical expenses actually incurred by or on behalf of the decedent was $12,167.40, the amount allowed by Medicare as payment in full. Appellee argues that to authorize a greater measure of damages would be to bestow a windfall upon Appellant. In Appellee's view, therefore, the total verdict should be $58,667.40 ($12,167.40 plus $46,500.00), plus delay damages.

In Kashner v. Geisinger Clinic, 432 Pa. Super. 361, 638 A.2d 980 (1994), the Superior Court summarized the principles by which the amount of medical expenses recoverable by the plaintiff is to be determined.

It is well-settled that a plaintiff in a personal injury action seeking damages for the cost of medical services provided to him as a result of a tortfeasor's wrongdoing is entitled to recover the reasonable value of those medical services. While we agree that the amount that was actually paid...for...medical services may be relevant in determining the reasonable value of those services, the trier of fact must look to a variety of other factors in making such a finding. Among those factors to be considered by the jury are the amount billed to the plaintiff, and the relative market value of those services.

Clearly, the amount actually paid for medical services does not alone determine the reasonable value of those medical services. Nor does it limit the ...


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