Billed vs. Paid: How Ohio Juries Decide the Value of Your Medical Bills After Jaques v. Manton

Published May 12, 2010 · Ohio Supreme Court

Your hospital bill after a crash says $21,000. Your health insurer paid $7,500, the hospital wrote off the rest under its contract with the insurer, and you owe nothing more. Now the at-fault driver's lawyer wants to tell the jury that your medical expenses were really $7,500, not $21,000. Can he?

As of last week, in Ohio, yes. On May 4, 2010, the Supreme Court of Ohio decided Jaques v. Manton, 125 Ohio St.3d 342, 2010-Ohio-1838, and held that evidence of these "write-offs" is admissible even when the case is governed by Ohio's 2005 collateral-source statute. This is a defense-friendly ruling, and it will be used against injured people in every courtroom in the state. Here is what it means and how a well-prepared case answers it.

The collateral-source rule, before and after 2005

Under the traditional common-law rule, a defendant could not tell the jury that the plaintiff's bills were paid by insurance or any other "collateral" source. The wrongdoer was expected to bear the full cost of the harm, and the plaintiff's foresight in carrying insurance was not supposed to become the wrongdoer's discount.

In 2005, the General Assembly largely reversed that rule with R.C. 2315.20. The statute lets a defendant introduce evidence of amounts "payable as a benefit to the plaintiff" from other sources, with an important exception: the evidence stays out if the source of the benefit has a right of subrogation, meaning a right to be repaid out of the plaintiff's recovery. Most health insurers have exactly that right, so in practice the statute still keeps health-insurance payments out of most injury trials.

Separately, in a 2006 case called Robinson v. Bates, the Supreme Court held that a write-off, the difference between what a provider billed and what it accepted as full payment, is not a collateral-source payment at all, because nobody paid it. The Court said both the amount billed and the amount accepted are admissible, and the jury decides the reasonable value of the care from all the evidence. Robinson arose before the 2005 statute took effect, which left open whether the statute changed the result.

What happened in Jaques

Richard Jaques was hurt in a crash caused by Patricia Manton, who admitted fault. His providers billed $21,874.80. His health insurer, which had a subrogation right, paid $7,483.91 under its contracts, and the providers accepted that as payment in full, writing off $14,390.89.

The trial court kept the write-offs out, reasoning that R.C. 2315.20 barred the evidence because the insurer had a subrogation right. The jury heard only the billed amount and awarded $25,000, including $15,500 for medical bills. The Sixth District affirmed.

The Supreme Court reversed, 5 to 1. Justice O'Donnell's majority opinion held that R.C. 2315.20 addresses only benefits actually paid by a collateral source. A write-off is not a benefit anyone paid, so the statute does not reach it, the subrogation exception never comes into play, and Robinson controls. The Court reaffirmed that "Both the original medical bill rendered and the amount accepted as full payment are admissible" on the question of the reasonable value of medical care.

Justice Pfeifer dissented. He argued that the write-off exists only because the plaintiff's insurer negotiated it, that the insurer has a subrogation right, and that the statute therefore plainly excludes the evidence. His reading would have been better for injured people, but it did not carry the day.

Why insurance companies care so much

Medical bills do more in an injury case than reimburse the plaintiff. They are the number juries anchor to. A jury that sees $21,000 in bills thinks about the injury differently than a jury that sees $7,500, and that difference carries through to the award for pain, suffering, and lost enjoyment of life.

That is why defense lawyers will now routinely offer the write-off evidence. The argument to the jury is simple: "the real cost of this injury was $7,500." It is also misleading, and a well-tried case shows why.

How a plaintiff's lawyer answers the write-off argument

Jaques does not say the paid amount is the measure of damages. It says the jury decides the reasonable value from all the evidence, and both numbers come in. That cuts both ways.

The billed amount is still evidence of reasonable value. Ohio law treats a provider's written bill as prima facie evidence that the charges were reasonable and necessary. The plaintiff is entitled to argue that the full charge reflects the real value of the care, and that the discount reflects the insurer's bargaining power, not the worth of a surgery.

The discount belongs to the plaintiff, not the wrongdoer. The plaintiff paid premiums for years to obtain that negotiated rate. A jury can be told that the defendant did nothing to earn it.

Future care has no write-off. For serious injuries, the biggest medical number is often future treatment: hardware removal, a fusion at the adjacent level, lifelong medication, home care. Those costs are proven through physicians and life-care planners at full value, and no insurer has discounted them yet.

The injury, not the invoice, drives the case. The strongest answer to a small "paid" number is a clear picture of what the injury has done to the person's life: the work missed, the activities given up, the permanent limitations a doctor will describe. Cases that are built on the bills alone are the ones most damaged by Jaques. Cases built on the person are not.

What this means for you

If you have an injury claim in Ohio, expect the insurance adjuster to argue that your medical expenses are "only" what was paid. Do not accept that framing. The reasonable value of your care is a jury question, and the billed amount remains part of the evidence.

Two practical steps help. First, use your health insurance for crash-related treatment rather than letting bills go unpaid; a subrogation lien can be negotiated at the end of the case, and unpaid bills in collections hurt you far more than a write-off does. Second, make sure every provider's records document not just charges but diagnosis, prognosis, and future needs, because that is where case value lives after Jaques. For crashes, our car accident page and rear-end collision page explain how we document injuries from the first week.

If the at-fault driver has little or no coverage, your own uninsured and underinsured motorist coverage may be the policy that actually pays, and the same billed-versus-paid fight will happen with your own insurer.