What is a “Reasonable” Medical Bill in Tennessee?

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It depends!  Under T.C.A. § 24-5-113(a), “medical, hospital or doctor bills” incurred due to an injury that are itemized in the complaint and attached as an exhibit are deemed to be “necessary and reasonable” as long as the total amount of the bills does not exceed $4000.

And, under T.C.A. § 24-5-113(b):

“ . . . if an itemization of or copies of the medical, hospital or doctor bills which were paid or incurred because of such personal injury are served upon the other parties at least ninety (90) days prior to the date set for trial, there shall be a rebuttable presumption that such medical, hospital or doctor bills are reasonable.”

But what if, after an injury causing accident, a hospital files submits its charges to Blue Cross Blue Shield (BCBS) or some other insurance company, gets paid the reasonable and customary amount provided by their contract, and then tries to collect the difference between the billed amount and the contract amount by perfecting a lien against the cause of action under T.C.A. §§ 29-22-102 (Tennessee Hospital Lien Act)?

In West v. Shelby County Healthcare Corp. 2014 Tenn. LEXIS 1033, (12/19/14), the Tennessee Supreme Court, said, in essence, that hospitals cannot have their cake and eat it too.  If they accept the contract amount, that is all they get.

“We have already held that persons insured by an insurance company are intended third-party beneficiaries of the contract between their insurance company and a hospital. Benton v. Vanderbilt Univ., 137 S.W.3d 614, 620 (Tenn. 2004). Thus, with regard to an insurance company’s customers, “reasonable charges” are the charges agreed to by the insurance company and the hospital. Nishihama v. City & County of San Francisco, 93 Cal. App. 4th 298, 112 Cal. Rptr.2d 861, 867 (App. Ct. 2001); Hoffman v. Travelers Indem. Co. of Am., 2013-1575, p. 10 (La. 5/7/2014); 144 So.3d 993, 1000. The Med’s contract with BCBST and BHSG defined what the reasonable charges for the medical services provided to Mses. West and Heags-Johnson would be.”

But even the Court got a bit confused when it pointed out that:

“The presumption in Tenn. Code Ann. § 24-5-113(a)(1) (2000) that itemized medical bills are necessary and reasonable does not apply to this case. That presumption applies only to personal injury actions brought in any court by injured parties against the persons responsible for causing their injuries. Tenn. Code Ann. § 24-5-113(a)(2). In addition, the presumption does not apply when the total cost of the medical bills exceeds $4,000. Tenn. Code Ann. § 24-5-113(a)(3). The claims made by Mses. West and Heags-Johnson are not personal injury claims against the persons who caused their injuries, and the amount of each claim exceeded $4,000. Accordingly, we must assess the reasonableness of the Med’s charges without the presumption that they are reasonable.”

Actually, as we point here, there is a rebuttable presumption of reasonableness, regardless of the amount, if the bills are served on the other parties at least 90 days in advance of trial under T.C.A. § 24-5-113(b).

Trial Court Should Have Been Reversed for Erroneous Jury Instruction in FELA Case.

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Plaintiffs usually fare well in FELA cases, which provide compensation for railroad employees injured on the job.  Unlike state workers compensation systems, however, which are no-fault systems, under FELA, the plaintiff must prove some negligence on the part of the railroad in causing the injury.  In Spencer v. Norfolk Southern Railway Co.  2014 Tenn. LEXIS 626 (8/29/14), the plaintiff injured his back when he threw a switch. The trial court told the jury that the plaintiff had to prove the railroad knew or should have known on the day of the incident that the switch was not operating properly.  The jury found in favor of the railroad, and the plaintiff appealed.  The Tennessee Court of Appeals found the jury instruction was erroneous and reversed, granting the plaintiff a new trial. Surprisingly, however, the Tennessee Supreme Court reversed the Court of Appeals and reinstated the jury verdict in favor of the railroad, finding the erroneous instruction to have been “substantially accurate.”  The Supreme Court acknowledged that the instruction could have been given more precisely and suggested that the jury should have been instructed to determine whether the railroad knew or should have known at a time sufficiently before the incident such that it could have taken action to prevent or ameliorate the incident.  But that was no help to the injured plaintiff, who will get not a second chance to prove his FELA case, and who will receive no compensation for his back injuries.

Preparing Your Personal Injury Client to Testify

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 “It’s hard to live your life in color and tell the truth in black and white”

(Gregg Allman)

“Few cases go to trial.  In virtually all serious injury cases, however, the plaintiff will have to give a deposition.  As a result, for most personal injury plaintiffs, the deposition is the trial.”

In its fall issue, The Verdict, the journal of the Georgia Trial Lawyers Association, has published an in-depth article entitled, “Preparing Your Personal Injury Client to Testify,” by Hu Hamilton and Patrick Cruise. The material outlined in the article was gleaned from years of trial experience in the school of hard knocks. It offers detailed practical suggestions for preparing injury clients for depositions, as well as for trial.

The Hamilton Firm LLC is committed to improving the practice of law through continuing legal education, leading workshops and seminars, and sharing with others through professional journals and magazines.

Claims Against the State of Georgia Get Trickier

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Ante litem notice in claims against the State of Georgia has become trickier.  To sue the State under the State Tort Claims Act, written notice must be provided to DOAS (Department of Administrative Service) and to the particular agency involved within 12 months of the date “the loss was discovered or should have been discovered”, O.C.G.A. § 50-21-26(a).  On October 6, 2014, the Georgia Supreme Court held in Board of Regents v. Myers, 2014 Ga. LEXIS 768, that a student’s ante litem notice of her injuries suffered in a university parking lot failed to strictly comply with notice requirements because it did not state any amount of loss whatsoever.  The Court concluded that the plain language of O.C.G.A. § 50-21-26(a)(5)(E) required notice of the amount of the loss claimed at that time, within the belief and knowledge of the claimant, as was practicable under the circumstances. Although the notice stated that the student’s loss was yet to be determined, she was incurring medical bills, and although she did not yet know the full extent of her injury, she had actually incurred medical expenses of $4,180 at the time she gave notice.

That is not exactly what the statute states, and the language is not that plain:

(5) A notice of claim under this Code section shall state, to the extent of the claimant’s knowledge and belief and as may be practicable under the circumstances, the following:

(A)  The name of the state government entity, the acts or omissions of which are asserted as the basis of the claim;

(B)  The time of the transaction or occurrence out of which the loss arose;

(C)  The place of the transaction or occurrence;

(D)  The nature of the loss suffered;

(E)  The amount of the loss claimed; and

(F)  The acts or omissions which caused the loss.”

This new interpretation  creates a another pitfall for plaintiffs pursing claims against the State of Georgia, as there is always room to argue over the meaning of what “as may be practicable under the circumstances,” but it is clear that the “amount of the loss claimed” should be stated specifically.


Visitors Beware When You Check Into Tennessee Hotels

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On May 12, 2010, Greg and Diane Parker, came to Tennessee from their home in California to visit Ms. Parker’s father. Mr. Parker was paralyzed from the waist down, so the couple rented a handicap accessible room at the Holiday Inn Express in Harriman, Tennessee.  After they checked in, they took a look at the bathroom and noticed a “gap between the shower bench and the wall”, and that the bench was loose. They reported the problem and requested a different room, but none was available. Hotel staff assured Mr. Parker that someone would repair the shower bench. They left for dinner, and their upon return they inspected the shower bench. It seemed to be repaired, “bolted up flush to the wall like it should be.” Mr. Parker pushed on the shower bench, and it did not “shake or sound loose.”  The next morning he went into the bathroom to shower, transferred himself from his wheelchair to the shower bench and had been showering for approximately ten minutes when the bench suddenly collapsed.  He was injured.

Shouldn’t the hotel owner/operator be held responsible?  A guest checks in, notices a problem and the hotel sends in a maintenance man to tighten the bolts, but it collapses anyway, injuring a disabled person.  Sounds like a no-brainer, but not to the Tennessee Supreme Court.

Incredibly, in Parker v. Holiday Hospitality Franchising, 2014 Tenn. LEXIS 638 (9/12/14), the Supreme Court absolved the hotel of all responsibility.  The hotel was built in 2006 by D&S Builders, who had improperly installed the shower bench without using proper blocking to secure it to the interior wall.  The contractor could not be sued due to Tennessee’s four year statute of repose on negligent construction claims, T.C.A. §§ 28-3-202 and 203.  The hotel owner had accepted the contractor’s work and opened the hotel to the public.  However, he claimed to have no notice of the defective condition of the shower bench, even though they sent a maintenance man to adjust it after the guest complained!

According to the Supreme Court, “The general rule in Tennessee is that a property owner is not vicariously liable for injuries third parties sustain from the negligence of an independent contractor who performs work for the property owner.”

”We hold that the undisputed facts fail to establish either the accepted work doctrine exception or the nondelegable duty to the public exception to the general rule that property owners are not liable for the negligence of independent contractors. We also hold that the undisputed facts establish that Mr. Patel had neither actual nor constructive notice of the defective condition created by the independent contractor’s negligence.”

Contrast this extremely unfair outcome involving a Tennessee hotel with the decision in Bright v. Sandstone Hospitality LLC, A13A1811 (3/26/14), where the Georgia Court of Appeals reversed the grant of summary judgment to the owner of a Wingate branded hotel in Kennesaw, Georgia that had similarly denied responsibility for a defective grab bar in a shower/bathtub, blaming the contractor who built the hotel several years before.  That case was recently settled after mediation for $250,000 with Hu Hamilton as lead counsel for the plaintiff.

Injury Claim Against a Georgia City: 6 Months Notice and Specific Monetary Demand Required

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It has long been the law in Georgia that anyone having a tort claim against a municipality (a city or town) had to serve written notice of the claim within six months of the event causing the injury.  This, of course, was a trap for the unwary and could lead to a legitimate injury claim being barred simply because timely notice was not given the city or town.  The injured person might not seek legal advice until it was too late, and occasionally, lawyers without much experience handling personal injury cases might not be aware of the notice requirements.

Effective July 1, 2014, not only must notice of the claim be presented within six months, but a demand for a specific sum of money must be included, even though the injured person may not have completed medical treatment, may still be out of work and may have no idea of the extent of permanent impairment and disability.

O.C.G.A. § 36-33-5(e) now provides: “The description of the extent of the injury required in . . . this Code section shall include the specific amount of monetary damages being sought from the municipal corporation. The amount of monetary damages set forth in such claim shall constitute an offer of compromise. In the event such claim is not settled by the municipal corporation and the claimant litigates such claim, the amount of monetary damage set forth in such claim shall not be binding on the claimant.”

Anyone having an injury claim against a Georgia city or town should seek competent legal advice as soon as possible, so that proper ante litem notice can be given.  Otherwise even a very serious injury claim against a city will be barred.

Labeling Fed Ex Drivers as Independent Contractors Does Not Necessarily Make Them So

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Although we generally confine our blog posts to developments in the law from Tennessee, Georgia and Alabama (as well as law firm announcements), this California case is worthy of comment.

In Alexander v. FedEx Ground Package System, Inc., a major decision by the 9th Circuit Court of Appeals (August 27, 2014) the Court determined that Federal Express could not necessarily avoid claims by the drivers for employment expenses and unpaid wages under California law, or duck federal liability under FMLA, by calling the drivers “independent contractors”:

“Labeling the drivers “independent contractors” in FedEx’s Operating Agreement does not conclusively make them so when viewed in the light of (1) the entire agreement, (2) the rest of the relevant “common policies and procedures” evidence, and (3) California law.”

This decision could have broad application nationally to other types of claims against Fed Ex. As the Court stated, “As a central part of its business, FedEx Ground Package System, Inc. (“FedEx”), contracts with drivers to deliver packages to its customers. The drivers must wear FedEx uniforms, drive FedEx-approved vehicles, and groom themselves according to FedEx’s appearance standards.  FedEx tells its drivers what packages to deliver, on what days, and at what times. Although drivers may operate multiple delivery routes and hire third parties to help perform their work, they may do so only with FedEx’s consent. FedEx contends its drivers are independent contractors under California law. Plaintiffs, a class of FedEx drivers in California, contend they are employees. We agree with plaintiffs.”

The concurring opinion includes this delightful and appropriate comment:

“Abraham Lincoln reportedly asked, “If you call a dog’s tail a leg, how many legs does a dog have?” His answer was, “Four. Calling a dog’s tail a leg does not make it a leg.” Justice Cardozo made the same point in W.B. Worthen Co. v. Kavanaugh, 295 U.S. 56, 62 (1935), counseling us, when called upon to characterize a written enactment, to look to the “underlying reality rather than the form or label.” The California Supreme Court echoed this wisdom in Borello, saying that the “label placed by the parties on their relationship is not dispositive, and subterfuges are not countenanced.’ ”

Tennessee trial judges must explain why they are granting or denying a motion for summary judgment.

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In a unanimous opinion today (7/15/14), Mary C. Smith v. UHS of Lakeside, Inc. the Tennessee Supreme Court has determined that the Tennessee Rules of Civil Procedure require trial judges to explain why they are granting or denying a motion for summary judgment before they ask the lawyer for the winning party to prepare a proposed order.

Motions for summary judgment are requests by one or more parties to a lawsuit for the court to rule on the merits of an issue before a case goes to trial. The court can determine prior to the start of a trial that there is no genuine issue of material fact and all or a portion of the case will come to an end.

In the specific case the Court decided today, Mary C. Smith sued UHS of Lakeside, Inc. in the Shelby County Circuit Court following the death of her husband who had been treated at the Lakeside Triage Center in September 2004. UHS filed motions for summary judgment asking the trial court to dismiss Ms. Smith’s lawsuit. During hearings in March 2010 and September 2011, the trial judge orally granted UHS’s motions but did not explain the basis for her decisions. Instead, the trial judge asked UHS’s lawyer to draft orders that provided the legal basis for her decisions. The trial judge signed the orders prepared by UHS’s lawyer despite Ms. Smith’s objections.

Ms. Smith appealed, and the Court of Appeals set aside the summary judgment orders. The Court of Appeals decided the trial court failed to comply with Rule 56 of the Tennessee Rules of Civil Procedure, which requires trial courts to “state the legal grounds” when deciding a motion for summary judgment.

The Supreme Court agreed that the trial court failed to comply with Rule 56. The Court emphasized that deciding a motion for summary judgment is a high judicial function. The requirement that a trial court state its grounds promotes respect for the judicial system by ensuring that a summary judgment decision is the product of the trial court’s own independent analysis.

The Court held that the trial court erred by granting UHS’s motions for summary judgment without providing legal grounds and by asking UHS’s lawyers to supply the orders that articulated the reasons for the court’s decision. The Court concluded the trial court must, “upon granting or denying a motion for summary judgment … state the grounds for its decision before it invites or requests the prevailing party to draft a proposed order.”

In this case, the Court determined the contested orders were not the product of the trial court’s independent judgment, therefore the case was returned to the trial court for further proceedings.

Drastic Cuts in Tennessee Workers’ Compensation Benefits Coming For Accidents After July 1st:

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Governor Haslam’s Workers’ Compensation Reform Bill goes into full effect in Tennessee on July 1st and applies to any worker injured after June 30th.

  • Insurance companies will have even more opportunity to deny coverage based on pre-existing conditions.  The law now provides that all injuries must arise “primarily out of and in the course and scope of employment,” so the injured worker must prove that the employment “contributed more than 50% in causing the injury, considering all causes.”
  • Permanent partial disability (PPD) benefits, which are supposed to provide compensation for future earnings loss due to an injury, will be dramatically scaled back.  PPD awards will be based solely on the impairment rating, multiplied by 450 weeks:
    • An injured worker with a 5% impairment rating will receive only 22.5 weeks of benefits for PPD.
    • If he or she does not return to work, or returns to work earning less, only marginal increases of 1.35 to 1.45 times the impairment rating are available.  For example, a worker with a 5% rating who can’t return to work might be entitled to 30 to 32.6 weeks of benefits.

Thankfully, there is an “escape” clause in the new law that will allow for much larger PPD awards up to 450 weeks for a few workers, if at least three of four factors are proven:

  • Limited education
  • 55 or older
  • No transferable job skills
  • No reasonable employment opportunities locally.

For most workers, however, benefits for permanent disability will be very limited, no matter how devastating the effect of a serious injury is on his or her ability to earn a living in the future.

Better workers compensation benefits may be available through Georgia:

Georgia law may provide better benefits to an injured worker than Tennessee, and in some situations a claim can be filed in either state.  If the accident occurred in Georgia there may be jurisdiction in Georgia.  Even if the accident occurred outside Georgia, if the worker was hired in Georgia and the employer has a place of business there or if the worker lives in Georgia, the claim can be brought in Georgia.

If there is any possibility of dual jurisdiction in Georgia, call us.

Workers injured on the job should not blindly accept an insurance company’s decision to handle a workers compensation case as a Tennessee case.  If there might be jurisdiction in Georgia, call us immediately!

Here are just two examples of dual jurisdiction in Tennessee and Georgia:

  • A Tennessee company that routinely sends service technicians into Georgia to serve or repair equipment, such as heat and air units, industrial machinery or plumbing may be subject to Georgia workers compensation law if the accident occurs in Georgia.
  • A Tennessee trucking company that hires workers through its terminal in Georgia will be subject to Georgia workers compensation laws regardless of where the accident occurs.
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