Lagerstrom v. Myrtle Werth Hospital-Mayo Health System

Vance Lagerstrom died due to the negligent care of Myrtle-Werth Hospital-Mayo Health System (defendant). Vance’s wife, Klover Lagerstrom, brought suit for medical malpractice and wrongful death. Lagerstrom presented evidence that Vance’s medical expenses totaled $89,000. The circuit court permitted Myrtle to present evidence that Klover’s out-of-pocket costs totaled only $755 due to payments from various collateral sources, including Medicare, write-offs, and health insurance. Medicare had a statutory right to reimbursement if Vance’s estate received any recovery resulting from the injuries. Medicare informed Klover that it intended to seek such reimbursement. Despite this, Klover chose not to include Medicare in the lawsuit. Klover did seek to introduce evidence of the obligation to reimburse Medicare. The circuit court excluded this evidence. Wisconsin’s medical-malpractice statute stated that evidence of payments from collateral sources was admissible, but the statute did not specify how courts should use such evidence. The statute also provided for subrogation claims from third parties. The circuit court instructed the jury that it may, but was not required to, reduce Klover’s award for the reasonable value of her medical expenses by the amount of the collateral-source payments. The jury returned a verdict in favor of Klover with an award of $55,755, including $20,000 for Vance’s pain and suffering, $35,000 for the loss of companionship, and only $755 for medical expenses. Klover appealed.