Plaintiff Wendy Marie Henshaw alleged that she slipped and fell on a liquid substance on October 28, 2021, at the Defendant Wal-Mart’s premises.
Plaintiff filed a motion to strike Defendant’s medical billing and coding expert, Kathleen DePaolo, MSHI, RHIA, CCS. DePaolo, who is a “Certified Coding Specialist,” intended to offer expert testimony regarding the reasonable market value of Plaintiff’s medical bills. DePaolo’s ultimate opinion is that, although Plaintiff’s medical bills amount to $264,324.76, the reasonable value of those bills is $90,053.36.
Reasonable Value of Plaintiff’s Medical Bills
DePaolo’s expert report includes item-by-item analyses of Plaintiff’s medical providers’ charges. To calculate the reasonable value of Plaintiff’s medical bills, DePaolo used a “three-pronged analysis.”
First, DePaolo audited Plaintiff’s medical bills to ensure that each charge was correctly coded and complied with the “applicable medical billing and coding rules, standards, and federal regulations.” If Plaintiff’s providers failed to code an expense (or if she determined that a provider applied an incorrect code), then DePaolo applied the code that she deemed to be appropriate based on her review of Plaintiff’s medical records.
Second, DePaolo “determined the reasonable marketplace value for the same services within the same community within in the same year.” To calculate the reasonable value of a line-item charge, DePaolo generally relied on three pricing databases: (1) Physicians’ Fee Reference (Yale Wassermann, DMD Medical Publishers, Ltd); (2) Medical Fees (Context4Healthcare Inc. Practice Management Information Corporation); and (3) Find-A-Code.
DePaolo specifically reviewed the seventy-fifth percentile value for each code across the three databases, and she identified the median value to be the “national usual and customary value.” She then multiplied the “national usual and customary value” by a geographic modifier based on Plaintiff’s providers’ zip codes. DePaolo concluded that the resulting number was the “reasonable value” for each line item.
Third, DePaolo conducted a market analysis of outpatient service prices in the Orlando area. To identify additional evidence and further validate the results of her audit, DePaolo reviewed published, hospital-specific data listing local outpatient service prices.
Medical Billing Expert Witness
Kathleen DePaolo is a medical billing auditor with specialized expertise in inpatient hospitalization billing including DRG, ICD-10 diagnostic code classification and pricing methodologies. Her expertise lies in medical billing, health information, and revenue data analytics.
Discussion by the Court
The Plaintiff argued that the Court should exclude DePaolo’s testimony regarding the reasonable market value of Plaintiff’s medical bills because: (1) DePaolo’s opinions are unreliable conduits of hearsay upon hearsay; (2) her opinions and methodology cannot be tested; and (3) her opinions will not assist (and pose an unreasonable risk of misleading) the jury.
DePaolo’s opinions are unreliable conduits of hearsay upon hearsay
According to the Court, the Plaintiff failed to recognize that (1) Rule 803(17) of the Federal Rules of Evidence states that “[m]arket quotations, lists, directories, or other compilations that are generally relied on by the public or by persons in particular occupations” are not excluded by the hearsay rule and (2) Rule 703 provides that an expert may rely on inadmissible facts or data in forming her opinion if experts in her particular field would reasonably rely on the same evidence.
The Plaintiff primarily claimed that DePaolo’s reliance on the three pricing databases is insufficient, considering that DePaolo does not know how the pricing databases compile their data. However, DePaolo and other courts have explained that experts in the medical billing industry routinely rely on the three databases that DePaolo used.
DePaolo’s opinions and methodology cannot be tested
The Plaintiff specifically argued that DePaolo’s opinions and methodology cannot be tested because DePaolo (1) declined to demonstrate how she queried the pricing databases during her deposition (because she considered the databases to be proprietary) and (2) merely referenced two peer review studies in her Expert Report.
Although the average person lacks access to the pricing databases that DePaolo used, another medical billing and coding expert could surely replicate DePaolo’s calculations. Additionally, Defendant included two letters— authored by highly credentialed individuals—reflecting separate studies of DePaolo’s procedures with its Response.
The Court concluded that the Plaintiff’s argument that DePaolo’s opinions and methodology cannot be tested is meritless.
DePaolo’s opinions and testimony will not assist the jury
Despite the Plaintiff’s argument to the contrary, DePaolo’s testimony plainly relates to the reasonable value of Plaintiff’s medical expenses.
The Court notes that there is a split in this district regarding the admissibility of medical billing and coding experts’ testimony and that it has previously excluded a medical billing and coding expert because “she provided no analysis as to how she reached her opinions and merely state[d] her opinions in a conclusory fashion.”
However, considering the detailed nature of DePaolo’s Expert Report (as well as the complicated healthcare billing landscape in United States), the Court is satisfied that DePaolo’s testimony and opinions are sufficiently reliable, relevant, and admissible in this case. Therefore, the Plaintiff, once again, failed to show that DePaolo’s opinions and testimony will not assist the jury.
Held
The Court denied the Plaintiff’s motion to strike Kathleen DePaolo’s opinions as to reasonable value of the bills.
Key Takeaway:
DePaolo submitted a detailed report on the reasonable market value of the Plaintiff’s medical bills. Her reliance on the three pricing databases was deemed sufficient, and her methodology could be tested despite the Plaintiff’s reservations. Given the complicated healthcare billing landscape in the United States, her testimony, which plainly relates to the reasonable value of the Plaintiff’s medical expenses, could assist the jury.
Case Details:
| Case Caption: | Henshaw V. Wal-Mart Stores East, LP |
| Docket Number: | 6:23cv2388 |
| Court: | United States District Court, Florida Middle |
| Order Date: | October 21, 2024 |
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