State v. Wagnon

                                       17

           Submitted September 14, 2022, affirmed February 1, 2023


                      STATE OF OREGON,
                       Plaintiff-Respondent,
                                 v.
                   JEFFREY ALLEN WAGNON,
                      Defendant-Appellant.
                    Lane County Circuit Court
                      18CR76413; A175055
                                  

    Defendant appeals from a supplemental judgment imposing criminal restitution, arguing that the trial court erred in awarding compensation for the victim’s
copays because the state failed to establish that each copay amount was reasonable. Defendant’s argument on appeal is that the standard for establishing that
a medical expense is reasonable should be the same standard used for copays.
Therefore, defendant contends, because there was no testimony about the market
rate for copays, or testimony that each of the victim’s copays was “reasonable,”
the state failed to prove that the copays were reasonable. Held: The Court of
Appeals held that the evidence in the record was sufficient to demonstrate that
the copay charges were reasonable. The court concluded that it was not necessary
to provide evidence of the market rate of copays, because copays are not a service
for which there is a market. Additionally, the court reasoned that a factfinder
can be presumed to know whether a charge for a copay is reasonable and therefore the state was not required to put on testimony that the victim’s copays were
reasonable.
    Affirmed.



    Kamala H. Shugar, Judge.
  Ernest G. Lannet, Chief Defender, Criminal Appellate
Section, and John Evans, Deputy Public Defender, Office of
Public Defense Services, filed the brief for appellant.
   Ellen F. Rosenblum, Attorney General, Benjamin Gutman,
Solicitor General, and Lauren P. Robertson, Assistant Attorney
General, filed the brief for respondent.
  Before Tookey, Presiding Judge, and Egan, Judge, and
Kamins, Judge.
    KAMINS, J.
    Affirmed.
18                                                     State v. Wagnon

          KAMINS, J.
         Defendant appeals from a supplemental judgment
imposing criminal restitution, arguing that the trial court
erred in awarding compensation for the victim’s copays,
because the state failed to establish that each copay amount
was reasonable. We conclude that the record contains sufficient evidence that the copays were reasonable, and therefore affirm.
          Defendant pleaded guilty to assault in the fourth
degree, ORS 163.160, for punching the victim, J, in the face,
breaking her zygomatic arch and causing a concussion.1
J incurred significant medical expenses as well as lost
wages as a result of the assault. After a hearing spanning multiple days, the trial court awarded restitution to
the Criminal Injuries Compensation Account (CICA) for J’s
medical copays in the amount of $2,513.80 and lost wages in
the amount of $3,880.33. The trial court also awarded J restitution for lost wages totaling $9,944.10. Providence Health
Plan requested reimbursement for the amount the insurance
plan paid for J’s medical bills, but the trial court declined to
award any compensation, because the record did not establish the fair market value of those expenses. Defendant
appeals and challenges only the $2,513.80 awarded to CICA
for J’s copays, contending that the state failed to prove that
the amount was reasonable.
         Defendant’s sole argument on appeal is that the
standard for establishing that a medical expense is reasonable should apply equally to copays. Therefore, defendant contends, because there was no testimony about
the market rate for copays, or testimony that each of J’s
copays was “reasonable,” the state failed to prove that the
copays were reasonable. He does not challenge any other
aspect of the trial court’s ruling. The state responds that,
because the record established that the copays were paid
in the contracted amount for J’s health insurance, that evidence is sufficient to support a finding that the copays were
reasonable.

   1
     We affirmed defendant’s judgment of conviction without opinion. State v.
Wagnon, 

, 

 (2021).
Cite as 

 (2023)                                                  19

         “In reviewing a restitution award, we review the
trial court’s legal conclusions for legal error and its factual
findings for any evidence.” State v. Skeen, 

, 

 (2021). We view the evidence supporting
the trial court’s restitution order in the light most favorable
to the state. State v. Perdew, 

, 

 (2020).
         A court may order a defendant to pay a victim restitution for “economic damages” resulting from the crime. ORS
137.106(1)(a) (2020).2 A key “purpose of damages and criminal restitution is to make a victim whole[.]” State v. Islam,

, 

 (2016). “When the state seeks
restitution for amounts paid for medical charges, among
other requirements, it must prove that the charges were reasonable.” State v. Gastiaburu, 

, 

 (2022) (internal quotation marks omitted). Under
ORS 137.106 (2020), there is no presumption that medical or
hospital charges are reasonable.3 State v. Dickinson, 

, 683, 

 (2019). “A medical charge is reasonable if it is at (or below) the market rate for the services,
drugs, or other medical items provided[.]” State v. Workman,

, 

 (2019).
         The trial court concluded that the copays charged
to J by the insurance company for certain medical services were reasonable based on the testimony of J, Shaw, a
representative of the Crime Victim and Survivor Services
Division (CVSD), and Cunningham, a subrogation analyst
for Providence Health Plan. J testified that her insurance
set the amount of the copays for which she was financially
responsible and that they were generally between $35 and
$45, depending on the provider. Cunningham testified that
copays are a flat dollar amount and are part of the insured’s
out-of-pocket expenses as outlined by the insurance plan
that, in this case, was purchased by J’s employer. Shaw

    2
      ORS 137.106 has subsequently been amended; we cite the version of the
statute in effect at the time of the hearing. Or Laws 2022, ch 57, § 1.
    3
      We note that, under the current version of ORS 137.106, as amended by
House Bill 4075 (2022), at a restitution proceeding, “economic damages will be
presumed reasonable if the damages are documented in the form of a record, bill,
estimate or invoice from a business, health care entity or provider or public body
as defined in ORS 174.109.”
20                                            State v. Wagnon

testified that CVSD pays the copays and deductibles for victims with health insurance based on the medical bill and
the explanation of benefits. The state also submitted an
exhibit that broke down the copays by date, provider, and
amount. We agree with the trial court that that evidence
was sufficient to demonstrate that the copay charges were
reasonable.

         Beginning with defendant’s argument that the market-rate analysis should apply to copays, we conclude that it
is not necessary to provide evidence of the market rate of
copays in order to establish that a particular copay amount
is reasonable. It is true that, to ascertain whether a medical
expense is reasonable, we normally look to the market rates
for the services provided. See Workman, 

(“A medical charge is reasonable if it is at (or below) the market rate for the services, drugs, or other medical items provided[.]”). However, copays are not a service for which there
is a market. As explained at the restitution hearing, copays
are a flat fee set by the insurance company that the patient
must pay for medical services, and that amount can differ
based on the type of provider—copays are not the amount
the provider charges for the service. See ORS 743B.281(2)(c)
(including copayment as a type of “cost share to be paid by
the enrollee [of a health insurance plan] for the procedure or
service”).

         By contrast, the market-rate analysis for medical
expenses is appropriate because “the market rate is the
value ascribed to the services in a given market, and the
market rate is the burden a victim bears to receive care
in that time and place.” State v. Campbell, 

, 

 (2019), rev’d in part on other grounds,

, 

 (2020). That analysis is not appropriate in assessing the reasonableness of copays, because
the amount of the copay is not correlated to the actual value
of the services received. Nor are copays themselves a commodity that can be bought and sold such that their value
can be determined using market concepts.

       Our decision in State v. Fox, 

, 

 (2021), rev’d in part on other grounds, 

,
Cite as 

 (2023)                               21

 (2022), does not compel a contrary result. In
Fox we reversed in part a supplemental judgment awarding
restitution for the victims’ medical expenses and attorney
fees, concluding that the state had failed to present sufficient evidence that one of the victim’s medical expenses
was reasonable. Id. at 318, 325. We concluded that, without
evidence breaking down the cost of each service and how
the amounts related to the customary market rates, the
record was insufficient for the trial court to conclude that
those expenses were at or below market rate and, therefore,
reasonable. Id. at 325. The evidence relating to copays consisted solely of testimony that CVSD had paid the victim
$300 for “copays” that insurance would not cover. Id. at 318.
Based on that limited evidence, we observed that “because
the state failed to establish that the $300 [copay] amount
was reasonable, … the trial court erred in awarding restitution to CVSD for that expense.” Id. at 325. Here, by contrast, there was testimony as to how the amounts of the
copays were established and an itemized breakdown of each
copay.
          As to defendant’s argument that there must be specific testimony stating that the copays are “reasonable,” we
further conclude that a factfinder can be presumed to know
whether a charge for a copay is reasonable, such that additional testimony is unnecessary. Unlike other charges related
to medical services, the copay is the amount that is typically
paid by the individual consumer. Cf. State v. McClelland,

, 

, rev den, 

(2016) (“The finder of fact cannot be presumed to know what
is a ‘reasonable’ charge for medical services based on their
own experience and without further evidence, particularly
given that many medical services are paid by third parties
and insurance companies.”). As copays are a standard feature of health insurance, the rates for copays are a matter of
common knowledge. See State v. Hedgpeth, 

,

 (2019) (“[A] factfinder’s common knowledge can
supply the bridge to a factfinder’s reasonable inference.”);
ORS 743B.281(2)(c) (in its estimate of costs, an insurer must
include an itemization of the “[c]oinsurance, copayment or
other cost share to be paid by the enrollee for the procedure
or service”).
22                                           State v. Wagnon

          We do not foreclose the possibility that there may be
a situation where a copay functions like a commodity such
that a market-value test for reasonableness would be appropriate. However, that is not the situation presented here.
The evidence in this case included an exhibit containing
a breakdown of the date, medical provider, and amount of
each copay and testimony that J’s insurance provider set the
amounts of the copays at a flat rate based on the plan’s benefits, that that rate was derived from an arms-length transaction between the insurance company and the employer
that purchased the insurance, and that the amounts were
generally between $35 and $45 depending on the medical
provider. That evidence was sufficient for a factfinder to find
that the amounts of the copays were reasonable. See State v.
Aguirre-Rodriguez, 

, 

 (2021) (“[T]he
issue on review is whether a rational factfinder, accepting
all reasonable inferences, could have found the facts necessary to support the [restitution] award.”). Therefore, the
trial court did not err when it awarded restitution to CICA
for those expenses.
        Affirmed.