Tennessee Supreme Court Holds That Full and Undiscounted Medical Bills may be Submitted as Proof of Reasonable Medical Expenses

The Tennessee Supreme Court has issued its long-awaited decision in the Dedmon v. Steelman case. This case has direct and significant consequences to personal injury litigation in Tennessee. In short, defendants may not argue that the amount actually received by a medical provider is the reasonable amount of a plaintiff’s medical bills.  Plaintiffs may submit undiscounted medical bills in full as proof of reasonable expenses.

The Tennessee Supreme Court granted an appeal in Dedmon to address whether its ruling in West v. Shelby County Healthcare Corp., 459 S.W.3d 33 (Tenn. 2014) applies in personal injury cases. In West, the court held that a hospital’s reasonable charges under Tennessee’s hospital lien statute are the amount the hospital accepts from the patient’s private insurer, not the full amount of the medical bills sent to the patient.

The Supreme Court released its decision on November 17, 2017.  The court held that the collateral source rule applies to personal injury claims in which the collateral benefit at issue is private insurance. Consequently, plaintiffs may submit evidence of the injured party’s full, undiscounted medical bills as proof of reasonable expenses. Furthermore, defendants are precluded from submitting evidence of discounted rates accepted by medical providers from an insurer in order to rebut the plaintiff’s proof that the full, undiscounted charges are reasonable.

The court reasoned that to allow defendants to submit discounted rates would conflict with the collateral source rule. However, defendants remain free to submit any other competent evidence to rebut a plaintiff’s proof on the reasonableness of medical expenses, so long as that evidence does not conflict with the collateral source rule.

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