Lagerstrom v. Myrtle Werth Hosp.-Mayo Health Sys. - 2005 WI 124, 285 Wis. 2d 1, 700 N.W.2d 201

Rule:

The text of Wis. Stat. § 893.55(7) (2001-02) explicitly allows evidence of collateral source payments to be introduced in medical malpractice actions. However, if evidence of collateral source payments from sources including Medicare, other state or federal government programs, medical insurance or write-offs, and discounted or free medical services is presented to the fact-finder, then the parties must be allowed to furnish the jury with evidence of any potential obligations of subrogation or reimbursement. The circuit court must instruct the fact-finder that it must not reduce the reasonable value of medical services on the basis of the collateral source payments. Although the jury is instructed not to use the evidence of collateral source payments to reduce the award for medical services, evidence of collateral source payments may be used by the jury to determine the reasonable value of medical services.

Facts:

Following a jury's verdict, the circuit court entered judgment in the amount of $ 55,755 plus costs in favor of Klover Lagerstrom, individually as surviving spouse of Vance H. Lagerstrom and as Special Administrator of the Estate of Vance H. Lagerstrom, deceased, referred to collectively as the estate, against Myrtle Werth Hospital-Mayo Health System, ABC Insurance Company, its insurer, Red Cedar Clinic-Mayo System, and DEF Insurance Company, its insurer, referred to collectively as the defendants. The circuit court's order denied a post-verdict motion under Wis. Stat. § 805.14(5)(c) to change the answers on the special verdict; the estate appealed. The estate argued, inter alia, that the trial court erred by admitting evidence of collateral source payments for the purpose of determining the reasonable value of the medical services but refusing to admit evidence of the estate's potential obligation to reimburse Medicare.

Issue:

Did the circuit court err under Wis. Stat. § 893.55(7) in admitting evidence of collateral source payments in this medical malpractice action, in refusing to admit evidence of the estate's potential obligation to reimburse Medicare, and in instructing the jury that it may, but need not, consider the collateral source payments in determining the reasonable value of the medical services rendered?

Answer:

Yes

Conclusion:

The court agreed with the estate’s argument that the trial court erred by admitting evidence of collateral source payments for the purpose of determining the reasonable value of the medical services but refusing to admit evidence of the estate's potential obligation to reimburse Medicare. The text of Wis. Stat. § 893.55(7) explicitly allowed evidence of collateral source payments to be introduced in medical malpractice actions. However, if evidence of collateral source payments from sources including Medicare, other state or federal government programs, medical insurance or write-offs, and discounted or free medical services was presented to the fact-finder, then the parties must be allowed to furnish the jury with evidence of any obligations of subrogation or reimbursement. The trial court must instruct the fact-finder that it must not reduce the reasonable value of medical services on the basis of the collateral source payments.