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State v. Campbell

Court of Appeals of Oregon

February 6, 2019

STATE OF OREGON, Plaintiff-Respondent, Cross-Appellant,
GARY LEE CAMPBELL, Defendant-Appellant, Cross-Respondent. 296 Or.App. 22

          Argued and Submitted May 8, 2018

          Yamhill County Circuit Court 15CR13064 (Control), Ladd J. Wiles, Judge.

          Sarah Laidlaw, Deputy Public Defender, argued the cause for appellant-cross-respondent. Also on the briefs was Ernest G. Lannet, Chief Defender, Criminal Appellate Section, Office of Public Defense Services.

          Michael A. Casper, Assistant Attorney General, argued the cause for respondent-cross-appellant. Also on the brief were Ellen F. Rosenblum, Attorney General, and Benjamin Gutman, Solicitor General.

          Before Lagesen, Presiding Judge, and DeVore, Judge, and James, Judge.

         Case Summary: Defendant appeals a judgment of conviction for numerous charges, assigning error to the trial court's jury instructions and its failure to merge multiple verdicts into a single conviction. The state cross-appeals a supplemental judgment, assigning error to the trial court's denial of its request for restitution to Care Oregon for the amount paid to cover the victim's medical expenses. The state argues that the record contains sufficient evidence to show that the medical expenses were "reasonable" as ORS 137.103(2) and ORS 31.710 require. Held: As to defendant's appeal, the Court of Appeals affirmed without [296 Or.App. 23] written discussion. With respect to the state's cross-appeal, the state established that the charges for medical services were reasonable in amount by providing evidence that they were paid by Care Oregon at or below the market rate and also by showing that they were paid at state Medicaid rates that are required to be paid at reasonable rates.

         Affirmed on appeal; reversed and remanded on cross-appeal.

         [296 Or.App. 24] DeVORE, J.

         This decision addresses the sufficiency of evidence offered to prove that amounts sought as medical expenses were reasonable for purposes of restitution in a criminal proceeding. Defendant appeals a judgment of conviction on a variety of charges. He challenges the trial court's jury instructions and its failure to merge two of the verdicts into a single conviction. The state cross-appeals a supplemental judgment, 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. The state argues that the record contained sufficient evidence to show that the medical expenses were "reasonable" as ORS 137.103(2) and ORS 31.710 require. As to defendant's appeal, we affirm without written discussion. As to the state's cross-appeal, we reverse and remand the supplemental judgment.

         The relevant facts are not in dispute. The case arises from a series of altercations that led to defendant stabbing the victim with a knife and the victim's car crashing into a tree. At the scene, the victim was unresponsive and barely breathing. He was helicoptered to the trauma center at Oregon Health and Science University Hospital (OHSU) where he underwent emergency surgery and remained for two weeks.

         Defendant was charged with several offenses: attempted murder, ORS 161.405 and ORS 163.115; first-degree assault, ORS 163.185; two counts of unlawful use of a weapon, ORS 166.220; menacing, ORS 163.190; and menacing constituting domestic violence, ORS 163.190. The jury returned guilty verdicts for all of the charged offenses except attempted murder.

         At a subsequent hearing, the state requested $46, 403.04 in restitution to recover the amount that CareOregon paid for the victim's medical bills.[1] To substantiate its request, the state submitted in evidence copies of health insurance claim forms that had been filed [296 Or.App. 25] with CareOregon for the victim's treatment. It also called CareOregon's subrogation coordinator as a witness. She had generated a ledger, which was admitted into evidence, detailing the amounts that various treatment providers charged and the reduced amounts that CareOregon actually paid for the victim's medical expenses arising from the incident.[2] The subrogation coordinator testified that CareOregon pays for medical expenses at state Medicaid rates, which are "much lower rates than * * * standard commercial insurance." She testified that, although the victim's medical providers charged $262, 006.83 for his treatment, CareOregon paid just $46, 403.04. The subrogation coordinator also testified that no CareOregon staff specifically reviews the reasonableness of services provided, unless given cause to do so. Rather, claims typically "go through the system automatically."

         At the close of the hearing, the state asked the trial court to order defendant to pay the $46, 403.04 to CareOregon. Defendant urged the trial court to deny the request, arguing that the state failed to show that the medical expenses were reasonable as required under Oregon statute. Defendant relied on State v. McClelland, 278 Or.App. 138, 372 P.3d 614, rev den, 360 Or. 423 (2016), for the proposition that a medical bill alone cannot establish reasonableness. Defendant contended that "it's not a question of whether [the bill] was paid or not," but rather, whether "the services were reasonable and at a reasonable cost."

         The trial court reluctantly agreed with defendant, observing that, although it "look[ed] at the documents and remember[ed] what the facts were and the amounts seem[ed] very reasonable," McClelland was "right on point." The court perceived itself to be "uncomfortably in the same position" as the McClelland court, noting that no one testified to having assessed reasonableness. The trial court denied restitution [296 Or.App. 26] for the medical bills based on its legal assessment that the record was insufficient to permit a finding of reasonableness.

         The state cross-appeals the supplemental judgment, assigning error to the trial court's denial of restitution to CareOregon. The state argues that a discounted medical bill paid by an insurer or "other informed market participant" is prima facie evidence of reasonableness unless otherwise rebutted. Defendant responds that our prior decision in McClelland forecloses that conclusion. He insists that a medical professional should testify to whether treatments and associated charges are reasonable and necessary.

         As presented, the issue requires this court to determine whether the record contains evidence from which a factfinder could infer that the medical expenses were reasonable. We review orders of restitution for errors of law. McClelland, 278 Or.App. at 141 (citation omitted). It is a question of law whether a trial court must deny restitution because the state failed to provide sufficient evidence of reasonableness. See Lea v. Farmers Ins. Co., 194 Or.App. 557, 559, 96 P.3d 359 (2004) ("To the extent that resolving this case requires us to decide whether a court has no option but to grant the motion [to strike] if plaintiff presents no evidence that his expenses were reasonable and necessary, the question is one of law.").

         Oregon statute describes the process by which the state may seek to recover restitution from a criminal defendant. In relevant part, ORS l37.106(1)(a) provides:

"If the court finds from the evidence presented that a victim suffered economic damages, *** the court shall enter a judgment or supplemental judgment requiring that the defendant pay the victim restitution in a specific amount that equals the full amount of the victim's economic damages as determined by the court."

         For the purpose of that provision, "economic damages" has "the meaning given that term in ORS 31.710[.]" ORS 137.103(2).[3] With that reference, the statute adopts the [296 Or.App. 27] definition of economic damages employed in civil cases. That is, economic damages are the "objectively verifiable monetary losses including but not limited to reasonable charges necessarily incurred for medical, hospital, nursing and rehabilitative services and other health care services [.]" ORS 31.710(2)(a).[4]

         Accordingly, our understanding of economic damages in civil cases informs our analysis of economic damages in criminal restitution proceedings. See State v. Ramos, 358 Or. 581, 588, 368 P.3d 446 (2016) ("[T]he legislature's cross-reference to the definition * * * and [its] purpose in creating the restitution procedure as a substitute for a civil proceeding make civil law concepts relevant to our interpretation of ORS 137.106."); State v. Islam, 359 Or. 796, 800, 377 P.3d 533 (2016) ("[Restitution under ORS 137.106 is informed by principles enunciated in civil cases concerning recoverable economic damages." (Citation omitted.)); McClelland, 278 Or.App. at 142 (ORS 137.106(1)(a) "incorporates the civil statutory definition of economic damages set forth in ORS 31.710(2)(a)").[5]

         Like a plaintiff in a civil case, "the state has to prove that the cost of such services is 'reasonable'" before restitution can be awarded for hospital or medical expenses. McClelland, 278 Or.App. at 143. "The amount that one pays for services generally is admissible and often may be an important factor in determining the reasonable value of those services." White v. Jubitz Corp., 347 Or. 212, 243, 219 P.3d 566 (2009) (citation omitted). Recoverable damages are based "on the value of necessary services." White v. Jubitz Corp., 219 Or.App. 62, 68, 182 P.3d 215 (2008), aff'd, 347 Or. 212, 219 P.3d 566 (2009) (emphasis in [296 Or.App. 28] original).[6] For that reason, evidence merely showing the existence of treatment bills is inadequate. McClelland, 278 Or.App. at 144 (submission of treatment bills, "without more, is insufficient proof for recovery of 'reasonable' hospital or medical services"); Valdin v. Holteen and Nordstrom, 199 Or. 134, 147-48, 260 P.2d 504 (1953) (to claim economic damages, it would be necessary to offer evidence that the charges were reasonable); Coblentz v. Jaloff, 115 Or. 656, 665-66, 239 P 825 (1925) (plaintiffs allegation of a certain amount for medical services, without evidence of payment or reasonableness, was insufficient to show that the charges were reasonable), overruled on other grounds by Simpson v. The Gray Line Co., 226 Or. 71, 358 P.2d 516 (1961).

         Although the amount of the expenses "may be an important factor in determining the reasonable value of those services [, ]" White, 347 Or at 243 (citation omitted), it is not enough, Lea, 194 Or.App. at 560. A trial court cannot rely on common sense to determine that the amounts are reasonable. McClelland, 278 Or.App. at 146. Rather, "[s]ome additional testimony or evidence is required[.]"Id. at 144. See also Ellington v. Garrow, 213 Or.App. 490, 496-97, 162 P.3d 328 (2007) (noting the "longstanding rule that a plaintiff seeking damages for personal injuries must establish the reasonableness of any medical expenses claimed as damages [, ]" but holding that the plaintiff did so when a doctor testified to the reasonableness of physical therapy bills).[7]

          [296 Or.App. 29] Beyond those observations, we have had relatively few opportunities to consider what sort of evidence of medical expenses may show them to be "reasonable" within the meaning of economic damages. In particular, we have yet to address whether proof of payment by a health insurer-in this case, payment by a state-funded health insurer-may be some evidence of reasonableness, and, if so, whether such payment may present sufficient evidence. In State v. Jordan, 249 Or.App. 93, 96-98, 274 P.3d 289, rev den, 353 Or. 103 (2012), we declined to consider as plain error whether a private health insurer's lien ledger showing payments to treatment providers demonstrated reasonableness. We noted that a lien ledger is more than a mere list of medical bills because it also provides the amounts a health insurer paid and concluded that, "[a]t a minimum," the issue was "reasonably in dispute," given the fact that we had never addressed it. Id. at 98. The current case requires us to address such a question.

         Previously, we have observed that the legislature enacted ORS 31.710 in light of the common law and that "[o]ur subsequent interpretation and application of the statute have been consistent with our preexisting treatment of economic damages for medical costs under the common law[.]" White, 219 Or.App. at 68. We have recognized that Oregon has applied a principle from the Restatement (Second) of Torts (1979) that reasonable medical expenses include "the value of the services reasonably made necessary by the harm." White, 219 Or.App. at 67 (citing Restatement § 924(c) comment f (emphasis omitted)). See also White, 347 Or at 236 (citing that provision of the Restatement with approval); Nelsen v. Nelsen, 174 Or.App. 252, 258, 23 P.3d 424 (2001) ("We refer to specific comments contained in [the Restatement] sections" when "they are persuasive and relevant to resolving the case before us." (Citation omitted.)).

          [296 Or.App. 30] The Restatement explains that the "measure of recovery" for "the value of services rendered in an attempt to mitigate damages" is "the reasonable exchange value of the services at the time and place." Restatement § 911 comment h. "Exchange value," in turn, refers to "the amount of money for which the subject matter could be exchanged or procured if there is a market continually resorted to[.]" Restatement § 911. In short, the Restatement suggests that a victim seeking compensation for medical expenses is entitled to recover at the market rate for those services in that time and place.

         The Restatement analysis regarding exchange value comports with other states' understanding of the common law at the time when the Oregon legislature enacted the original statute defining economic damages. See former ORS 18.560 (1987), renumbered as ORS 37.710 (2003) (providing present definitions of economic and noneconomic damages). Courts in other jurisdictions determined that reasonableness can be shown through proof that the charged or paid amount was the usual and customary rate for the medical services rendered. See, e.g., Myers v. Karchmer, 313 S.W.2d 697, 707 (Mo 1958), reh'g den (despite a lack of direct testimony regarding the charges' reasonableness, evidence of the medical bills and their payments, along with testimony that they were paid at "the regular going rate," was sufficient for the jury to consider reasonableness); Sam v. Sullivan, 189 S.W.2d 69, 75 (Tex Civ App 1945), writ den (evidence that the amount was the usual and customary charge and that a physician approved the bill was sufficient to sustain a finding of reasonableness, even though no expert testified that such bills were reasonable). Given the prevalent understanding, it is likely that the legislature intended "reasonable charges" to include those charges incurred at or below the usual and customary rate.

         We concur that the market rate is a reasonable amount for a victim to recover for medical expenses. That concept is consistent with common law and the statute that is read to provide that "recoverable damages are based * * * on the value of necessary services." White, 219 Or.App. at 68 (emphasis in original). By definition, the market rate is the value ascribed to the services in a given market, and [296 Or.App. 31] the market rate is the burden a victim bears to receive care in that time and place. Consequently, 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. It follows that evidence that payments have been made and that those payments were at or below market value is one way to show the reasonableness of those expenses.[8]

         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. See Lea, 194 Or.App. at 561 (noting that "a significant number of medical expenses today are paid by insurance companies and not individuals" in concluding that "a contemporary juror may be less capable of knowing what charges are reasonable than was a juror in 1912"); McClelland, 278 Or.App. at 146-47 (noting that the "finder of fact cannot be presumed to know what is a 'reasonable' charge for medical services based on their own experience and without further evidence, particularly given that many medical services are paid by third parties and insurance companies"); Jordan, 249 Or.App. at 98 n 3 (noting an insurer's lien ledger was evidence of reasonableness above and beyond a mere medical bill, in part, because it was "at least possible to infer" that the insurer "was satisfied that the medical bills it paid were reasonable"); see also ORS 743B.001(10) (defining insurer); ORS 743B.00104) (defining, as among health benefit plans, preferred provider organizations (PPO)); ORS 743B.001(8) (defining health benefit plan); ORS 743B.005(16) (defining health benefit plan); Cascade Physical Therapy v. Hartford Casualty Ins., 258 Or.App. 612, 618, 310 P.3d 1156 (2013), rev den, 354 Or. 837 (2014) (contract between PPO health insurer limited the amount the medical provider could demand in payment). Therefore, the fact that a health insurer has paid [296 Or.App. 32] 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, we conclude that the record contained sufficient evidence upon which a factfmder 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. Specifically, the subrogation coordinator testified that CareOregon pays for medical expenses at state Medicaid rates, which are "much lower rates than * * * standard commercial insurance." Such evidence of payments at or below market rate sufficed to permit a factfmder to find that the amounts sought as medical expenses were reasonable.

         Our 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. CareOregon's payments are the product of an elaborate statutory and regulatory scheme for controlling Medicaid rates under state and federal law. Chapter 414 of the Oregon Revised Statutes governs the administration of Oregon's public medical assistance program, including contracts with coordinated care organizations (CCOs) like CareOregon.[9] In particular, ORS 414.065(1)(a) requires the Oregon Health Authority to set "[r]easonable fees, charges, daily rates and global payments for meeting the costs of providing health services to an applicant or recipient[, ]" as well as "[r]easonable fees for professional medical and dental services which may be based on usual and customary fees in the locality for similar services" (emphases added). In making those determinations, the Oregon Health Authority must consult with the Medicaid Advisory Committee whose members include, in part, a licensed physician, health care [296 Or.App. 33] providers, two members of health care consumer groups that include Medicaid recipients, and two Medicaid recipients. ORS 414.225; ORS 414.211. By legal mandate, the state's payment rates are intended to reflect the usual and customary fees at or below the local market rate, taking into account what doctors, consumers, and other stakeholders consider reasonable.[10]

         Federal laws and regulations subject Oregon payment rates to additional oversight. Before Oregon can receive federal funding for its medical assistance program, the Centers for Medicare and Medicaid Services (CMS) must approve its payment rates, as well as its policies and methods for setting payment rates, for each service included in its Medicaid program. 42 CFR §§ 430.10-430.15 (2017); 42 CFR § 447.201 (2017). Federal funds are not available for state expenditures that exceed the amounts CMS approves in the state's rate-setting plan; it creates an upper limit. 42 CFR § 447.304 (2017). CMS also reviews and approves all of Oregon contracts with managed care organizations and requires that capitation rates-periodic payments to the contractors on behalf of health program beneficiaries-be actuarially sound. 42 CFR §§ 438.2-438.5 (2017). Contracts with organizations like CareOregon must be "developed in accordance with *** generally accepted actuarial principles and practices" and "certified by an actuary[.]" 42 CFR § 438.4 (2017). In light of that scheme of state and federal laws for establishing and regulating payment of reasonable rates, evidence of payments from CareOregon, a Medicaid-funded healthcare provider, is sufficient evidence that the amounts sought are reasonable.[11]

         Defendant resists our conclusion with several arguments. First, he likens this case to two cases in which the courts determined that the evidence was insufficient to present the question of reasonableness to the jury. Those cases, however, are distinguishable from the one before us. In Lea, the plaintiff introduced only evidence of charges. 194 Or [296 Or.App. 34] App at 559.[12] In Coblentz, the plaintiff merely alleged $321 in medical services, medicine, and bandages, but he offered no evidence that he paid it. 115 Or at 665-66. In neither case did the plaintiff provide any evidence that the amounts charged were reasonable, such as proof regarding the going rate for such services. Here, the state provided more than an amount billed or even an amount that an individual had paid. In ...

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