Expert Witness Profiler

Tag: Collateral Source Rule

  • Medical Billing Expert’s Testimony Regarding the Reasonable Value of the Medical Treatment Admitted

    Medical Billing Expert’s Testimony Regarding the Reasonable Value of the Medical Treatment Admitted

    This case arises from a traffic accident that occurred on December 21, 2022 at an intersection on U.S. Highway 98, involving an 18-wheeler and a Ford F-150 pickup truck.

    Cameron Thompson and his son, J.C., brought this action seeking damages, which included, among other things, past medical expenses for injuries sustained in the accident. 

    Defendants retained Nancy Michalski to opine on the “reasonable value” of Cameron’s medical treatment. Of the $40,440.00 billed for medical services provided to Cameron, Michalski opined that the reasonable value of such services is only $33,166.60.

    Plaintiffs contended that Michalski’s opinions are inadmissible because the methodology Michalski used to arrive at her opinions violates Mississippi’s collateral source rule and because the opinions are otherwise not relevant or reliable.

    Medical Billing Expert Witness

    Nancy Fraser Michalski provides clients with practical ways to improve efficiency, quality, and outcomes of their bodily injury claims and litigation, including medical bill auditing, comprehensive claim reviews, medical record reviews, and life care planning. Drawing on her extensive experience as a nurse and medical billing expert, Michalski developed a methodology for medical bill audits that has been endorsed by peer review, as well as a patent pending system for medical record analysis.

    Want to know more about the challenges Nancy Michalski has faced? Get the full details with our Challenge Study report. 

    Discussion by the Court

    Relevance

    Plaintiffs asserted that any testimony at all “about the so-called ‘reasonable value’ of Plaintiff’s medical bills are [sic] simply not referred to or a factual issue at dispute.”

    Given the Defendants’ right to rebut the “necessary and reasonable” presumption regarding evidence of medical bills, it seems clear that Michalski’s opinions may be relevant. Having reviewed the parties’ submissions, including Michalski’s report and affidavit, the Court found that Michalski’s opinions are indeed directed at the “reasonableness” of the amount of the medical bills by focusing on the charges themselves for the medical services rendered.

    It is through Michalski’s opinions that Defendants are attempting to rebut the presumption that the medical bills incurred were necessary and reasonable, and by reducing the charges, they would thereby reduce the amount recoverable on the medical bills.

    Therefore, the Court found that, because Michalski’s opinions would assist the jury in determining whether the medical bills paid or incurred were necessary and reasonable by focusing specifically on the amounts charged, the opinions were relevant. 

    Reliability

    Whether Michalski’s opinions violate the collateral source rule

    Mississippi’s collateral source rule bars a tortfeasor from reducing the damages it owes to a Plaintiff ‘by the amount of recovery the Plaintiff receives from other sources of compensation that are independent of (or collateral to) the tortfeasor.’”

    In other words any “compensation or indemnity for the loss received by Plaintiff from a collateral source, wholly independent of the wrongdoer, as from insurance, cannot be set up by the latter in mitigation or reduction of damages.” Typically, the rule bars a Defendant from introducing evidence that a Plaintiff has received payments from a collateral source to reduce that Defendant’s liability for the damages.

    Plaintiffs contended that Michalski’s opinions ran afoul of the collateral source rule. To be sure, Michalski’s ultimate opinion is that the reasonable value of the medical services rendered is less than the amount billed. However, she did not arrive at this opinion based on payments made on behalf of Plaintiffs either by insurance or Medicaid/Medicare or evidence in the form of write-offs or self-pay discounts.

    Her ultimate opinion is based on what is essentially a “sub-opinion” that some of the rates charged were too high. Defendants emphasized, and the Court agreed, that Michalski’s proposed testimony is not that Plaintiffs’ recovery should be reduced by payment from an independent source; rather, it is that the charges are not reasonable when ultimately compared to charges from other similarly situated providers. Because Michalski does not arrive at her opinions, as Plaintiffs contend, by deducting, or even considering, payments, gifts, or write-offs from third parties, the Court found that Michalski’s opinions, on their face, do not violate Mississippi’s collateral source rule.

    Whether Defendants have shown the opinions are otherwise reliable

    Plaintiffs claimed that Michalski “has not sufficiently established that her method for projecting these future costs is generally accepted in the relevant scientific community.”

    However, there is no opinion by Michalski as to future costs. She addresses only past medical treatment. Plaintiffs also argue that “Michalski’s methodology differentiates between expected charges for services as opposed to a reasonable value or actual cost to a patient.” While the meaning of this statement is a bit unclear, Plaintiffs never explain which part of Michalski’s report employs such methodology.

    The Court is left to speculate about the methodology’s unreliability because these general statements lack sufficient explanation.

    Critiques go to the weight not the admissibility of the opinion

    To begin with, Michalski used several nationally recognized sources to determine the reasonable value of the charges. She consulted multiple pricing databases including Physician’s Fee Reference, PMIC Medical Fees, Find-a-Code, and the American Hospital Directory, and then applied a geographic adjustment factor for the location where the services were provided and ultimately arrived at her opinion as to the reasonable value of the medical services rendered to Cameron.

    In their Reply, Plaintiffs assert that medical treatment is not a commodity or services that is like other goods or services. Plaintiffs claim that medical providers have their own system, “Chargemasters,” which establishes the prices for treatment provided. The Court cannot accept a bald assertion in a party’s brief as fact.

    Additionally, Plaintiffs complained that by comparing Cameron’s providers to other “unidentified” providers, Michalski failed to account for the quality of services, the cost of the services, or the continuity of care, making her opinion, a comparison of apples to “unidentified oranges.” The Court held that these critiques go to the weight not the admissibility of the opinion.

    Finally, Plaintiffs argued that numerous other courts have excluded experts who have used Michalski’s exact same methodology, citing several cases. Because Plaintiffs have misunderstood Michalski’s methodology, the Court cannot agree. 

    Held

    The Court denied the Plaintiffs’ motion to exclude the opinions by Nancy Michalski.

    Key Takeaways:

    • Michalski’s opinions would assist the jury in determining whether the medical bills paid or incurred were necessary and reasonable by focusing specifically on the amounts charged.
    • To address every case cited would seem to be an exercise in futility because “a district court has broad discretion to determine whether a body of evidence relied upon by an expert is sufficient to support that expert’s opinion.” This Court exercises its discretion here, and trusts that those courts did the same with what they were presented and reached the correct result.

    Case Details:

    Case Caption: Thompson Et Al V. Intermodal Cartage Co., Llc. Et Al
    Docket Number: 2:24cv34
    Court Name: United States District Court, Mississippi Southern
    Order Date: May 19, 2025
  • Medical Billing Expert Witness’ Testimony Does Not Breach Georgia’s Collateral Source Rule

    Medical Billing Expert Witness’ Testimony Does Not Breach Georgia’s Collateral Source Rule

    This case arises from a high-speed, single vehicle collision into a tree. After the collision, the vehicle caught fire and exploded. Plaintiff Jade Burch was the front seat passenger in the vehicle.

    As a result of the collision, Burch broke her pelvis, femur, tibia, and seven ribs. She required emergency leg surgery. Burch also suffered burns on her left foot, which required a skin graft. To date, Burch has incurred over one million dollars of medical expenses and will have at least one more surgery in the future.

    Defendant hired Marilyn Pacheco to give testimony “regarding the reasonableness of medical charges for medical services provided.

    Pacheco opines that “the $900,343.05 in billed charges on or after 10/25/21 is excessive and the reasonable value of the past medical care received by Plaintiff is $429,553.74.” Plaintiff argued Pacheco’s opinions must be excluded because she is not qualified to offer them, they are unreliable and unhelpful to the trier of fact under Fed. R. Evid. 702 and Daubert and its progeny, and her opinions impermissibly inject collateral source into this case under Georgia law.

    Medical Billing Expert Witness

    Medical Billing Expert Witness

    Marilyn Godoy Pacheco has over 30 years of experience in establishing medical charges, medical billing, collections, pricing, and third-party payer contract negotiations and has been qualified and has testified as an expert forensic medical bill auditor in state and federal trials and arbitrations on approximately 638 occasions. She has 18 years of experience managing the medical billing department of a medical practice with 10 physicians; became a Certified Professional Coder from the American Academy of Professional Coders in 2012; founded E&M Billing Services, a medical billing service for multiple independent physician practices filing 1,000 claims per month, in 2004; been the director of Miller Children’s Subspecialty Group since 2005 where she provides oversight of the medical billing department, contract negotiations, and credentialing of 26 specialty medical groups with 90+ physicians; and since 2012, she has provided expert testimony for medical billing and auditing services for Elevate Services, Inc.

    Get the full story on challenges to Marilyn Pacheco’s expert opinions and testimony with an in-depth Challenge Study.  

    Discussion by the Court

    A. Pacheco’s Qualifications

    Plaintiff first challenged Pacheco’s qualifications, arguing she is not qualified to offer opinions about what an Augusta hospital (or any Georgia hospital) should have charged for Plaintiff’s medical treatment. Plaintiff argued while Pacheco may be qualified to assign the right billing codes to the medical services provided at Doctor’s Hospital, she is not qualified to use those codes to determine a reasonable fee in this case. However, the Court held that the Defendant has met its burden of demonstrating Pacheco is qualified as a medical billing expert.

    Plaintiff pointed out that Pacheco held only a high school diploma and lacked formal training in finance or economics. Moreover, she had no professional experience with pricing medical procedures and services in the state of Georgia. Despite this, Pacheco’s extensive experience in medical billing qualified her as an expert. She asserted that no specific academic degree existed for medical billing professionals, who do not need to be physicians or healthcare providers. As a medical billing expert she has specialized knowledge on industry-specific requirements “including ICD-9, ICD-10, CPT, HCPCS, APC, DRG, and NDC coding, rules, and regulations related to each code set and regional/geographic pricing.”

    B. Pacheco’s Methodology and Reliability

    The Court found Pacheco’s methodology is sufficiently reliable for admissibility, and the weaknesses in the data she relies on in conducting her methodology is appropriately addressed on cross examination. To form her opinions, Pacheco used a multi-step process to review and audit the medical charges to determine the reasonable value of the services provided. 

    First, Pacheco analyzed Plaintiff’s past medical records, billing data, and medical cost benchmarking resources over the period of Plaintiff’s treatment in Augusta.

    Second, she applied geographic-specific pricing to determine the reasonable marketplace value for the same services within the same community within the same year.

    Third, she conducted a market analysis of the local medical community for similar services based on published data “to identify additional evidence of reasonable marketplace value and further validate the results of the audit.”

    Plaintiff argued Pacheco’s methodology simply consists of plugging codes into databases from which she picks the “reasonable” value for the medical services; she cannot explain the origin of the data in these databases; she did no independent research in the Augusta or Georgia healthcare market to determine what hospitals charge for similar services; and therefore neither the Court nor the jury can test whether the databases are accurate and reliable. But these arguments are appropriately addressed on cross examination.

    Moreover, the methodology and data sources Pacheco employed have been peer reviewed in 2013 by Gerard Anderson, Ph.D., a widely known expert in the field of healthcare services pricing, and again in 2023 by a panel of experts including Professor Emeritus Gerald F. Kominski, Ph.D,; Orthopedic Surgeon Stewart L. Shanfield, M.D.; QA Auditor and Coder Vivian Washington, CPC, COC, CPMA, CRC, CPC-1; and Healthcare Administrator Andrew Bowen who found the methodology “sound, reliable, and applied appropriately using industry standard data.”

    C. Helpfulness to the Jury

    The Court is also unpersuaded by Plaintiff’s contention that Pacheco’s opinions are not helpful to the jury. The average lay person does not know what hospitals charge for healthcare services or understand how they generate the prices. Pacheco’s opinions address coding issues and whether the correct billing codes were applied, removing charges for improper packaged services, which is beyond the understanding of the average lay person and will assist the jury in determining whether Plaintiff’s medical expenses are reasonable. 

    D. Collateral Source Rule

    The collateral source rule bars the Defendant from presenting any evidence as to payment of expenses of a tortious injury paid for by a third party and taking any credit toward the Defendant’s liability and damages for such payments.” But the Eleventh Circuit has rejected this challenge to similar medical billing experts, explaining “Defendants were properly allowed to argue that medical charges were unreasonably high,” and such expert testimony “did not violate the collateral source rule.” Here, Pacheco does not opine that the medical expenses should be reduced by insurance payments, write-offs, or write-downs.

    The Court held that her testimony as to how the charged fees compare to the market is relevant to the reasonableness inquiry and does not “purport to present evidence that a third party paid for or should pay for the expenses of the tortious injury allegedly caused by Defendant’s negligence; accordingly the collateral source rule does not apply.”

    Held

    In conclusion, the Court denied Plaintiff’s motion to exclude the testimony of Defendant’s medical billing expert witness, Marilyn Pacheco.

    Key Takeaway:

    Not only is Pacheco qualified as a medical billing expert, she used a multi-step process to review and audit the medical charges to determine the reasonable value of the services provided followed by a detailed analysis of Plaintiff’s past medical records, billing data, and medical cost benchmarking resources over the period of Plaintiff’s treatment in Augusta. Moreover, her opinions address coding issues and whether the correct billing codes were applied, removing charges for improper packaged services, which is beyond the understanding of the average lay person and will assist the jury in determining whether Plaintiff’s medical expenses are reasonable.

    Case Details:

    Case caption: Burch v. Cracker Barrel Old Country Store, Inc.
    Docket Number: 5:22cv316
    Court: United States District Court for the Middle District of Georgia, Macon Division
    Dated: September 30, 2024