Medical billings - the effect of write-offs and write-downs

June 2008
By Hon. John A. Wittmayer, Multnomah County Circuit Court

Plaintiff treats with a medical provider who charges the "usual and customary" charges for the services, but the provider has a contract with plaintiff's health insurance company or a governmental agency to "write-off" some of those charges in exchange for payment of a lower sum. There has been considerable controversy among lawyers and in Court over how do deal with the consequences of these write-offs or write-downs.

On March 26, the Court of Appeals issued opinions in White v. Jubitz Corporation, 219 Or App 62 (2008) and Cohens v. McGee 219 Or App 78 (2008). These two cases appear to resolve these issues for all of us, pending anything further from the Supreme Court on these cases. In White, the Court of Appeals ruled that '"reasonable charges necessarily incurred' ...are those charges to which a plaintiff becomes liable or subject when the plaintiff received treatment, without regard to amounts that a medical provider subsequently writes off." And in Cohens, the Court of Appeals ruled that a trial court cannot, post-verdict, reduce a plaintiff's award of damages by the amount written off.