State v. Campbell, --- P.3d ---, No. A162357, 2019 WL 457574 (Or. Ct. App. Feb. 6, 2019)
April 04, 2019
Defendant was convicted of first-degree assault in charges arising from a domestic assault. He appealed, and the state cross-appealed, assigning error to the trial court’s denial of its request for restitution to CareOregon, a state-funded health insurance company, for the amount paid to cover the victim’s medical expenses. To substantiate its request at the restitution hearing, the state submitted copies of health insurance claim forms that had been filed with CareOregon for the victim’s treatment and called CareOregon’s subrogation coordinator as a witness. Defendant urged the trial court to deny the request, arguing that the state failed to show that the medical expenses were reasonable as required by Oregon statute. The trial court agreed with defendant, noting that no one testified as to having assessed the reasonableness of the bills. On cross-appeal, the state argued that a discounted medical bill paid by an insurer is prima facie evidence of reasonableness unless otherwise rebutted. The court began its consideration of the cross-appeal by describing that under Oregon law, victims are entitled to restitution for “reasonable charges necessarily incurred” for medical services. Although the amount paid is an important factor in determining the value of the services received, it is not enough. Some other evidence is needed to show that the expenses are reasonable. Oregon courts had not yet determined whether proof of payment by a health insurer presents sufficient evidence of reasonableness. Consistent with common law and statute, which finds that recoverable damages are based on the value of necessary services, the court concluded that market rate is a reasonable amount for a victim to recover for medical expenses. Consequently, the court held that the state can demonstrate the reasonable value of medical expenses by offering evidence that the medical expenses reflect the usual and customary rate for those services in the market wherein they occur. Health insurers, although not hands-on providers of medical care, may be well situated to assess what sums are usual and customary and, therefore, reasonable, given their central role in negotiating group contracts for employees and employers, establishing payment rates with medical provider groups, and processing masses of individual claims in the modern market. Therefore, the court concluded, the fact that a health insurer has paid a medical bill is something more than evidence of a medical bill standing alone; it is some indication of the charge’s reasonableness. Applying those principles to the case at hand, the court concluded that the record contained sufficient evidence upon which a factfinder could conclude that the requested restitution to CareOregon was reasonable. In addition to health insurance claim forms showing the amounts charged, a ledger showed the amounts paid. CareOregon’s payments were a fraction of the total bills issued, and a witness explained that they were at or below the usual and customary rate for those services in that market. Such evidence of payments at or below market rate sufficed to permit a factfinder to find that the amounts sought as medical expenses were reasonable. The court further found that its conclusion is required for the added reason that the payments were made by a publicly funded health insurer who, by design, can only make payments at reasonable rates. In conclusion, the court summarized, when proving economic damages for restitution, the state can establish that charges for medical services are reasonable by providing evidence that the charges reflect the usual and customary rates for those services in the market. Here, the state provided sufficient evidence of reasonableness when it showed that CareOregon, a publicly funded health insurer, made payments for medical expenses at state Medicaid rates that were “much lower” than “standard” rates, amounting to a fraction of the original charges. Therefore, the trial court was free to require restitution for the payments for medical expenses as a part of its sentence upon a judgment of conviction for defendant’s offenses. Affirmed on appeal; reversed and remanded on cross-appeal.