An appellate court in Alabama has overturned a trial court ruling reducing a provider's reimbursement from a personal injury settlement or services furnished due to the injuries. The injured party contended that the hospital's rates were not reasonable in light of the discounted rates paid by insurance companies or government programs.
Trial court ruling
The trial court reduced the payment to the hospital because of the markup of the undiscounted rate and the difference between that rate and what others pay. For example, the hospital charged the patient $9.00 for a dose of a sleep medication for which it paid 10 cents. The hospital's overall markup was 227 percent.
The hospital contended that its rates were set by a Charge Master, which was designed to calculate reasonable charges. Its witnesses defended the charges for every item. They testified that when its charges for some services furnished to the patient were audited, none were reduced, and a few were increased. and that its markup was below the state average of 300 percent and the national average of 245 percent. The trial court allowed 62 percent of the charges billed.
On appeal, the court found that the injured person presented no evidence concerning the reasonableness of the hospital's charges other than pointing out the markup of certain items. As a matter of law, this evidence was insufficient to rebut the testimony of hospital staff. The trial court ruling was reversed.
University of South Alabama Hospitals v. Blackmon, Ala. App., Oct. 9, 2009, ¶303,144
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