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GEORGIA SUPREME COURT WEIGHS IN ON DISCOVERY DISPUTE OVER REASONABLENESS OF PLAINTIFF’S MEDICAL BILLS

Posted by Layne Zhou

Discovery issues rarely reach the Georgia Supreme Court, but in the case of Bowden v. Medical Ctr., Inc., No. S14G1632, *1-25 (June 15, 2015), a discovery dispute centered around a plaintiff’s medical bills merited a 25-page unanimous opinion. Briefly, the case arose from a car accident involving a 21-year-old plaintiff, Danielle Bowden, who was treated at The Medical Center, Inc. (TMC), without health insurance, for a broken leg and subsequently received physical therapy. TMC billed her $21,409.95 for her care and filed a hospital lien for that amount. Bowden sought to invalidate the lien on the grounds that the charges were grossly excessive and did not reflect the reasonable value of the care she received. Enterprise, the insurer of the defendant, tendered its $25,000 limits, but because TMC and Bowden were unable to agree on how to apportion the settlement proceeds, Enterprise filed a complaint in interpleader against both Bowden and TMC. As part of Bowden’s answer to the interpleader action, she filed a cross-claim against TMC. It is against this procedural backdrop that this discovery dispute arises.

Bowden, as part of her cross-claim, requested information from TMC (e.g., pricing agreements with various insurance companies and Medicaid/Medicare; TMC’s total gross revenues, the percentage of patients who paid certain rates, blank forms which reflected contractual service charge agreements, etc.) targeted at proving she was charged more than other patients for similar injuries. TMC objected on the grounds of relevancy. The Georgia Supreme Court disagreed, holding, “where the subject matter of a lawsuit includes the validity and amount of a hospital lien for the reasonable charges for a patient’s care, how much the hospital charged other patients, insured or uninsured, for the same type of care during the same time period is relevant for discovery purposes.” Id. at *2. The Court went on to explain that under Georgia discovery rules, courts must interpret “relevant” broadly, as opposed to the narrower evidentiary standard used at trial, and specifically, that the discovery Bowden sought “may have some relevance to the reasonableness of TMC’s charges for her care.” Id. at *18. In dicta, the Court also rejected the notion that the mere existence of an agreement by a patient to pay hospital charges does not prove that the charges themselves are reasonable.

On a very basic level, this case is merely a reaffirmation of the broad scope of discovery entitled to litigants but it should also help the defense side of the bar access the records of medical financing companies like ML Healthcare. But discovery aside, this case could also have far-reaching, perhaps even unintended ramifications for attacking the reasonableness of medical bills. In the meantime, Defendants might want to use the Bowden decision to argue that plaintiffs have incurred unreasonably excessive medical bills which are not reflective of the value of services provided, in order to gain leverage in settlement negotiations.