## Facts

- Mary K. Patchett negligently crossed into oncoming traffic and struck Ashley N. Lee’s vehicle, injuring Lee and requiring medical treatment.
- Lee’s medical providers billed $87,706.36 for treatment related to the collision.
- Lee participated in the Healthy Indiana Plan (HIP), under which providers accepted $12,051.48 as payment in full (a substantial reduction from billed charges).
- Patchett admitted liability for the collision and generally did not dispute the necessity of Lee’s treatment but disputed the reasonable value of Lee’s medical expenses, leaving damages as the only trial issue.
- Before trial, Lee sought to exclude evidence of the reduced amounts accepted under HIP; the trial court granted the motion, reasoning that (i) precedent allowing evidence of discounted payments tied to private insurance did not extend to government rates and (ii) the evidence should be excluded under Indiana Evidence Rule 403 as confusing.

## Issues

1. Whether a defendant may introduce evidence of reduced reimbursement amounts accepted as payment in full from a government healthcare program to prove the reasonable value of medical services, consistent with Indiana precedent permitting similar evidence for private-insurer discounts (without mentioning insurance).
2. Whether excluding evidence of the reduced government-program reimbursement amounts under Indiana Evidence Rule 403, on the ground of jury confusion or unfair prejudice, is an abuse of discretion.

## Decision

- The Indiana Supreme Court held that the rationale permitting evidence of accepted discounted reimbursements applies to government payers such as HIP.
- The court concluded the trial court misread controlling precedent by treating government-program reimbursements as categorically inadmissible.
- The court held the HIP reimbursement amounts were relevant and highly probative of the reasonable value of Lee’s medical care.
- The court ruled that excluding the evidence under Evidence Rule 403 was an abuse of discretion because the probative value was not substantially outweighed by the risk of confusion or prejudice, and any risk could be addressed through instructions and trial presentation.
- The judgment excluding the HIP reimbursement evidence was reversed, and the case was remanded for further proceedings.

## Legal Principles

- In Indiana personal-injury damages trials, both (i) billed medical charges and (ii) amounts accepted by providers as payment in full are admissible, competing evidence of the reasonable value of medical services.
- The admissibility of accepted reduced reimbursements does not turn on whether the payer is private or governmental; the key consideration is that the provider agreed to accept the reduced amount as full payment.
- Evidence of accepted reimbursement amounts must be presented in a manner consistent with Indiana’s collateral-source limits: the factfinder may hear the amount accepted as payment in full, but the presentation should not identify insurance or the collateral source as such.
- Exclusion under Indiana Evidence Rule 403 is improper where reimbursement evidence goes to the central damages question and any potential confusion can be managed without categorical exclusion.

## Conclusion

The Indiana Supreme Court permitted defendants to use government-program reimbursement amounts accepted as payment in full as relevant evidence of reasonable medical-value damages, holding that excluding such evidence under Rule 403 and a restrictive reading of collateral-source limits was error.


Patchett v. Lee, 60 N.E.3d 1025 (Ind. 2016)