Health Law Case Brief: N.E. Physical Therapy Plus, Inc. v. Liberty Mutual Insurance Company

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By: Tucker W. Wade

On September 10, 2013, the Supreme Judicial Court of Massachusetts (the “Court”) affirmed a trial court’s decision to exclude statistical evidence offered by Liberty Mutual Insurance Company (“defendant”) contesting the reasonableness of high cost services provided by New England Physical Therapy Plus, Inc. (“plaintiff”) to a passenger of defendant’s insured.[1]  Under Massachusetts G.L. c. 233, § 79B, an exception to the hearsay rule, defendant sought to introduce geographical billing statistics from a third-party database marketed by Ingenix to support its refusal to reimburse plaintiff for the total amount of the chiropractic bills submitted.[2]  In excluding the database, the judge noted the defendant did not meet its burden of persuading the court of the admissibility of the evidence required under the exception.[3]  Section 79B has been interpreted to allow the admission of exhibits ordinarily excluded if the moving party persuades the trial court the exhibit is, at a minimum a) issued to the public, b) published for members of the relevant profession, and c) used and relied upon by such individuals.[4]  Defendant claimed the trial judge abused his discretion in denying the admission of the database as it fulfilled these three elements.

The Court considered whether the trial judge had the discretion to deliberate upon the reliability of the data offered by the defendant under §79B.  Even if the data satisfied all of the requirements set forth under §79B, the Court assessed whether the subsequent barring of the data amounted to an abuse of judicial discretion.[5]

The Court began its analysis by applying the abuse of discretion standard of review.[6]  In applying the standard, the Court looked for a decision which was arbitrary or capricious, noting it would not set aside the trial judge’s decision “simply because [it] might have reached a different result.”[7]

First, the Court found that if the defendant’s interpretation of the statute were accurate, the trial court would have contravened the legislative intent underlying the statute.[8]  The Court noted the language of the statute provides the trial court with discretion to determine the admissibility of evidence.[9]  The Court held the plain language of the statute controlled.[10]

Next, relying on precedent, the Court held the traditional role of the judge precludes the defendant’s interpretation of §79B, as the judge is the final arbiter on the admissibility of proposed exhibits.[11]  In dicta, the Court noted despite the statute’s requirement that “the offered publication be commonly used and relied upon…to ensure a certain level of reliability,” the trial court was not barred from addressing its own concerns on the reliability of the publication.[12]  The trial court concluded the database, while meeting the elements in §79B, was comprised of unverified, voluntary submissions of raw data provided by select insurance companies.[13]  Furthermore, Ingenix applies proprietary value and conversion factors to the volunteered submissions making extrapolations which cannot be verified as “accurately correspond[ing] with the actual charges for medical procedures.”[14]  The Court found the defendant’s interpretation of the statute led to an “absurd” distortion of the judge’s role, effectively hindering the court’s ability to exclude unreliable or weak data due to its reliance, no matter how pervasive, in a given profession.[15]

In light of its findings, the Court held the trial judge did not abuse his discretion in barring the admission of the database.

Tucker W. Wade is a J.D. student at Boston College Law School.  He is a graduate of College of the Holy Cross in Worcester, Mass.  He served as a summer intern in the Massachusetts Attorney General’s Office where he worked on subprime mortgage securities and false claims litigation.  Tucker is a native of southern California.

[1] N.E. Physical Therapy Plus, Inc. v. Liberty Mut. Ins. Co., 466 Mass. 358, 359 (2013).

[2] Mass. G.L. c.233, § 79B.

[3] N.E. Physical Therapy Plus, Inc. at 364.

[4] See id.  Mass. G.L. c.233, § 79B states that “Statements of facts of general interest to persons engaged in an occupation contained in a list, register, periodical, book or other compilation, issued to the public, shall, in the discretion of the court, if the court finds that the compilation is published for the use of persons engaged in that occupation and commonly is used and relied upon by them, be admissible in civil cases as evidence of the truth of any fact so stated.”

[5] Id. at 359.

[6] Id. at 363 (citing Commonwealth v. Polk, 462 Mass. 23, 32 (2013)).

[7] Id. (citing Cruz v. Commonwealth, 461 Mass. 664, 670 (2012), quoting Bucchiere v. New England Tel. & Tel. Co., 396 Mass. 639, 641, 642 (1986)).

[8] Id. at 364 (quoting Mazzaro v. Paull, 372 Mass. 645, 653 (1977) (noting ultimate admissibility of exhibits under by §79B is entrusted to the trial judge)).

[9] See id.

[10] Id. at 364 (citing Commonwealth v. Jones, 417 Mass. 661, 664 (1994) (stating it is not the practice of the Court to tamper or deviate from the clear expression of legislative intent)).

[11] See id. at 364-65.

[12] Id. at 365.

[13] Id. at 361.

[14] Id. at 366.

[15] Id. at 364-65.

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