Rose v. Via Christi Health System, Inc., 88,434.

• Decision Date: 31 October 2003
• Docket Number: No. 88,434.,88,434.
• Citation: 276 Kan. 539,78 P.3d 798
• Parties: ALDENA J. ROSE, Individually and as Surviving Spouse of Lyle Rose, Deceased, and MARILYN A. CORR, as Executor of the Estate of Lyle Rose, Deceased, Appellants/Cross-appellees, v. VIA CHRISTI HEALTH SYSTEM, INC./ST. FRANCIS CAMPUS, Appellee/Cross-appellant.
• Court: Kansas Supreme Court

276 Kan. 539

78 P.3d 798

ALDENA J. ROSE, Individually and as Surviving Spouse of Lyle Rose, Deceased, and MARILYN A. CORR, as Executor of the Estate of Lyle Rose, Deceased, Appellants/Cross-appellees, v. VIA CHRISTI HEALTH SYSTEM, INC./ST. FRANCIS CAMPUS, Appellee/Cross-appellant.

No. 88,434.

Supreme Court of Kansas.

Opinion filed October 31, 2003.

Thomas M. Warner, Jr., of Warner Law Offices, P.A., of Wichita, argued the cause and was on the briefs for appellants/cross-appellees.

Don D. Gribble, II, of Hite, Fanning & Honeyman, L.L.P., of Wichita, argued the cause, and Vince P. Wheeler, of the same firm, was with him on the briefs for appellee/cross-appellant.

Wayne T. Stratton and Anne M. Kindling, of Goodell, Stratton, Edmonds & Palmer, L.L.P., of Topeka, were on the brief for amicus curiae Kansas Hospital Association.

James R. Howell, Kyle J. Steadman, and Douglas D. Pletcher, of Bradshaw Johnson & Hund, of Wichita, were on the brief for amicus curiae Kansas Trial Lawyers Association.

The opinion of the court was delivered by

GERNON, J.:

Aldena M. Rose and Marilyn A. Corr, executor of the Estate of Lyle Rose, Deceased, (hereinafter jointly referred to as Rose) appeal the trial court's order allowing Via Christi Health System, Inc., (Via Christi) to offset its share of the judgment against medical expenses that were written off pursuant to a Medicare payment. Via Christi cross-appeals the trial court's admission of evidence regarding medical expenses.

Lyle Rose was admitted to Via Christi's St. Francis campus for a coronary arteriogram. Later that night, Lyle fell out of the bed and hit his head, causing two lacerations to the back of his head. A few hours later, Lyle developed a subdural hematoma, which caused him to collapse. He received medical treatment for his head injury in Via Christi's intensive care unit for over 1 month. However, before the coronary arteriogram could be performed, Lyle died as a result of the subdural hematoma and other complications caused by his fall.

Rather than provide Lyle's treatment for the complications resulting from his fall gratuitously, Via Christi elected to bill Lyle and his insurer, Medicare, for the full cost of Lyle's treatment. Medicare fully paid for Lyle's medical expenses in accordance with its payment contract with Via Christi, which required Via Christi to write off $154,193.24 of the $242,104.84 that it billed.

Rose sued Via Christi for negligence. Prior to trial, Via Christi filed a motion in limine seeking to limit evidence of medical expenses to the amount actually paid by Medicare. The trial court denied Via Christi's motion, finding that the collateral source rule applied.

A jury found Via Christi to be 36 percent at fault and awarded total damages of $582,186.01, including $261,422.46 in medical expenses. Via Christi's portion of the judgment totaled $209,586.96.

Thereafter, Via Christi filed a motion to offset the $209,586.96 judgment by the medical expenses it wrote off. Following a hearing, the court granted Via Christi's motion, allowing Via Christi to offset the award by $94,112.09, its pro rata share of the medical expense damage award. This appeal followed, and the matter was transferred to this court pursuant to K.S.A. 20-3018(c).

Rose raises three arguments in support of her claim that the trial court erred when it granted Via Christi's motion to offset the judgment. First, Rose argues that the district court's decision has no legal support. Second, Rose argues that the decision abrogates Medicare's right of subrogation. Third, Rose argues that the offset violates federal law.

Rose and Via Christi agree that the issue raises a question of law requiring the application of a de novo standard of review. Neither party, however, has cited any authority to support this standard of review, and both parties are wrong. A decision to offset a damage award is within the trial court's discretion. When reviewing such a decision, an appellate court must determine whether the trial court abused its discretion. Mynatt v. Collis, 274 Kan. 850, Syl. ¶ 1, 57 P.3d 513 (2002); Carson v. Chevron Chemical Co., 6 Kan. App. 2d 776, 793, 635 P.2d 1248 (1981). "`An abuse of discretion occurs where the district court clearly erred or ventured beyond the limits of permissible choice under the circumstances.'" Unwitting Victim v. C.S., 273 Kan. 937, 944, 47 P.3d 392 (2002) (quoting Wright ex rel. Trust Co. of Kansas v. Abbott Labs., 259 F.3d 1226, 1233 [10th Cir. 2001]).

Rose first argues that the trial court erred because there is no law to support its decision. Rose correctly notes the trial court's failure to cite to any authority. However, such a failure does not make a decision reversible. Rose fails to point to any authority that contradicts the trial court's decision. In fact, Rose's argument cites no legal authority whatsoever. Issues raised by an appellant with no supporting authority are not addressed by appellate courts. Enlow v. Sears, Roebuck & Co., 249 Kan. 732, 744, 822 P.2d 617 (1991).

For her second argument, Rose claims that the trial court's decision is wrong because it abrogates Medicare's right to subrogation. This argument is also without merit. Rose fails to explain how the court's order abrogates Medicare's rights when nothing in the district court's decision addresses Medicare's right to subrogation. The reduction of Rose's judgment only affects the amount available for Medicare's subrogation claim, it does not abrogate Medicare's right of subrogation.

For her final argument, Rose contends that the trial court's decision violates federal law. Rose relies on 42 U.S.C. § 1395cc(a)(1)(A)(i) (2000), which makes payment eligibility under Medicare dependent on a medical provider's agreement not to charge any individual for items or services for which he or she is entitled to have payment made from Medicare. Via Christi fails to address this issue other than in a footnote that summarily dismisses it without any argument or citation to authority.

The Supremacy Clause of the United States Constitution provides that federal law is the supreme law of the land. U.S. Const. art. VI, cl. 2. State laws that conflict with federal laws are without effect. Jenkins v. Amchem Products, Inc., 256 Kan. 602, 607, 886 P.2d 869 (1994). The same rule applies to state common law. 256 Kan. at 616-17 (holding that common-law actions based on inadequate labeling or failure to warn are preempted by FIFRA).

42 U.S.C. § 1395cc(a)(1)(A)(i) provides in pertinent part:

"Any provider of services . . . shall be qualified to participate under this subchapter and shall be eligible for payments under this subchapter if it files with the Secretary an agreement — not to charge, except as provided in paragraph (2), any individual or any other person for items or services for which such individual is entitled to have payment made under this subchapter . . . ."

If a provider violates the agreement not to charge patients, the Secretary of Health and Human Services may terminate or refuse to renew the provider's Medicare contract. 42 U.S.C. § 1395cc(b).

In Holle v. Moline Public Hosp., 598 F. Supp. 1017, 1021 (C.D. Ill. 1984), the court applied 42 U.S.C. § 1395cc(a)(1)(A) to void a hospital's lien, holding that the hospital was bound by its agreement with Medicare not to charge any other person for the items or services for which a person is entitled to Medicare payment. In Holle, the plaintiff was injured in an automobile accident and settled with the tortfeasor's insurance company. Subsequently, the plaintiff filed an action to establish the amounts that he had to pay from the settlement for medical service provider's liens. Medicare paid the hospital in full for the plaintiff's Medicare-covered expenses, but the hospital filed a lien seeking payment for the amount written off after the Medicare payment. The Holle court stated that if the hospital were allowed to enforce its lien, it "would violate 42 U.S.C. § 1395cc(a)(1)(A) and the duties it assumed by contract and would flaunt Medicare regulation and public policy aimed at protecting beneficiaries of the Medicare program." 598 F. Supp. at 1021.

We agree with the Holle court and conclude that the Medicare statute prohibits health care providers from charging Medicare-qualified patients for items or services that are covered by Medicare. With the exception of the items specified in 42 U.S.C. § 1395cc(a)(2) that may apply to Mr. Rose's hospitalization, 42 U.S.C. § 1395cc(a)(1)(A)(i) is in direct conflict with the trial court's decision granting Via Christi's motion to offset the written-off medical expenses. We conclude that the Medicare statute preempts the trial court's ruling. See Jenkins, 256 Kan. at 611. Thus, the trial court ventured beyond the limits of permissible choice and abused its discretion. See Unwitting Victim, 273 Kan. at 944. As a result, we reverse the district court's order granting Via Christi a general offset against the written-off medical expenses.

Cross-Appeal

In the event we reversed the trial court's decision regarding Via Christi's motion to offset, Via Christi cross-appealed, arguing that the trial court should have limited the evidence of medical expenses to those amounts actually paid, without including the amounts it wrote off. The admission or exclusion of evidence lies within the sound discretion of the trial court. Subject to exclusionary rules, a trial court's decision is reviewed using an abuse of discretion standard. State v. Lumley, 266 Kan. 939, 950, 976 P.2d 486 (1999).

The trial court denied Via Christi's motion to limit the admission of the evidence under the common-law collateral source rule which provides that "`benefits received by the plaintiff from a source wholly independent of and collateral to the wrongdoer will not diminish the damages otherwise recoverable from the wrongdoer.'" Farley v. Engelken, 241 Kan. 663, 666, 740 P.2d 1058 (1987).

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