Hospital Gets No Credit For Care Not Paid By Medicare

NOVEMBER 17, 2003 VOLUME 11, NUMBER 20

While in Via Christi’s St. Francis Hospital in Wichita, Kansas, for tests, Lyle Rose fell out of his bed and hit his head. He suffered a subdural hematoma (a blood clot in the brain) and developed other complications. He stayed in the hospital for over a month, but despite the facility’s best efforts he died from his injuries.

Rather than pay for his intensive care stay itself, Via Christi chose to bill Medicare for Mr. Rose’s time in the hospital. Because Medicare pays less than the full cost of patients’ care, Via Christi ended up writing off over $150,000 of the $242,000 it billed for Mr. Rose’s care. Medicare rules precluded Via Christi from seeking payment for any portion of the bill it was required to write off.

After he died, Mr. Rose’s family sued Via Christi for negligence. They alleged that it was the hospital’s fault that he had fallen out of his hospital bed, and a jury ultimately agreed, if only partially. The jury awarded $582,186.01 in damages for Mr. Rose’s death, and ruled that Via Christi was responsible for 36% of that amount, or $209,586.96.

Via Christi then asked the judge to reduce the award because of the unpaid medical care it had provided. Via Christi argued that it had already contributed more than its 36% share of the medical care portion of Mr. Rose’s care; after all, the facility reasoned, the total amount of damages had included the portion of its fee that had been written off.

The trial court agreed and reduced the judgment against Via Christi to just over $115,000. The Kansas Supreme Court, however, reversed the trial judge and reinstated the original judgment against Via Christi.

According to the court, there were two problems with Via Christi’s position. First, Medicare rules prohibit providers from seeking reimbursement for any unpaid portion of a bill otherwise covered by Medicare. Since the Medicare law is federal, it preempted any Kansas state law which arguably might have authorized the offset.

The “collateral source” rule also keeps defendants from introducing information about a plaintiff’s insurance coverage. Medicare, ruled the Kansas court, is after all just an insurance program, and Mr. Rose’s estate should not be penalized for the fact that he was covered by insurance.

Via Christi argued that keeping this information out of the court case gave Mr. Rose’s heirs a windfall. That may be true, reasoned the court, but if there is to be a windfall, it should benefit the victim’s family rather than the hospital. Rose v. Via Christi Health System, October 31, 2003.

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