For years, Tennessee businesses defending personal injury claims focused primarily on liability and causation. Increasingly, however, disputes are centering on damages—particularly the medical expenses being used to support settlement demands.
Corporate defendants, insurers, and risk managers are seeing more claims involving treatment provided outside the traditional health-insurance system. Instead of billing a plaintiff’s health insurer at negotiated reimbursement rates, some providers agree to delay payment until the case resolves, often through a Letter of Protection (“LOP”) tied to a future settlement or verdict. The resulting medical bills can differ substantially from the amounts typically paid in the ordinary healthcare market.
The issue itself is not new. What has changed is the level of attention these arrangements are receiving from courts, insurers, and state legislatures nationwide. In Tennessee, lawmakers recently considered House Bill 2108 and Senate Bill 2101, legislation addressing litigation financing arrangements and commercial litigation financiers.¹ The legislation passed both chambers of the General Assembly and was transmitted to the Governor in May 2026.² Whether the legislation ultimately takes effect in its current form, the proposal itself reflects increasing attention to the role outside funding may play in shaping litigation strategy, medical treatment, and damages claims in high-exposure civil cases.
In Tennessee, these issues matter because medical expenses often shape the value of the entire case. Higher medical bills can affect reserve calculations, mediation positions, and jury expectations long before a court evaluates whether the charges are reasonable.
The Tennessee Supreme Court’s decision in Dedmon v. Steelman remains the starting point for analyzing these disputes.³ In Dedmon, the court held that plaintiffs may introduce the full amount billed for medical treatment, even if healthcare providers would ordinarily accept lower amounts from insurers.⁴ At the same time, the court did not prevent defendants from challenging whether those charges are actually reasonable or necessary.⁵
That distinction has become increasingly important in commercial litigation.
Some litigation-related treatment arrangements can produce medical charges that exceed what providers regularly accept for the same services. As a result, defense strategy has evolved. Instead of focusing on what an insurer paid, defendants are increasingly using billing experts, coding specialists, and regional reimbursement data to evaluate whether claimed expenses reflect ordinary market rates.
For Tennessee businesses, timing matters. Under Tennessee Code Annotated § 24-5-113, itemized medical bills may be admitted as presumptive evidence that charges are reasonable and necessary if statutory requirements are satisfied.⁶ That presumption is rebuttable, but defendants who intend to challenge medical expenses must act early. Waiting until late-stage discovery or shortly before trial can make it far more difficult to respond effectively to inflated damages claims.
Another area receiving greater attention involves the financial relationships underlying litigation-related treatment. In some cases, providers regularly receive referrals from the same plaintiff’s firms or agree to defer payment based on the outcome of litigation. Those arrangements may become relevant to issues of credibility, bias, and the reliability of future-treatment opinions.
Tennessee’s discovery rules permit inquiry into matters relevant to witness credibility and financial interest,⁷ and disputes concerning litigation funding and provider relationships are increasingly appearing in discovery practice nationwide. Tennessee already regulates certain consumer litigation financing agreements through the Tennessee Litigation Financing Consumer Protection Act,⁸ and the recent legislative activity involving commercial litigation financing reflects growing attention to transparency and outside influence in civil litigation.
Federal court may also present different strategic considerations. In cases within the Sixth Circuit applying Tennessee law, expert testimony concerning medical billing and future treatment remains subject to Daubert scrutiny.⁹ Courts continue to emphasize that expert opinions must rest on reliable methodology rather than unsupported assumptions.¹⁰ That can create opportunities to challenge opinions based primarily on unusually high billed charges without corresponding market analysis.
More companies are responding to these issues much earlier in the life of a claim.
Certain indicators tend to appear repeatedly: treatment outside available health-insurance networks, unusually high charges for routine services, immediate referrals to particular imaging facilities or specialists, and rapid escalation from conservative care to invasive procedures.
The growing focus on these issues is also changing how claims are evaluated internally. Companies that once treated medical bills as largely fixed numbers are increasingly examining whether those figures reflect actual market value. Early expert review, targeted discovery, and independent medical examinations are becoming more common earlier in litigation, particularly in higher-exposure cases.
None of this means that all treatment provided under an LOP is improper or inflated. Many plaintiffs receive legitimate care through these arrangements, particularly where immediate insurance coverage is unavailable. But commercial defendants are no longer assuming that billed charges necessarily reflect reasonable value simply because they appear in medical records.
As attention remains focused on litigation funding and rising damages exposure, Tennessee businesses should expect continued disputes over how medical damages are calculated and presented to juries. While Dedmon permits plaintiffs to introduce the full amount billed for treatment, defendants retain the ability to challenge whether those charges are reasonable, necessary, and grounded in ordinary market practices.
For commercial defendants, addressing those issues early—and with the right evidentiary support—may significantly affect case valuation, settlement posture, and litigation outcomes.
Endnotes
- Tenn. H.B. 2108, 114th Gen. Assemb. (2025–2026); Tenn. S.B. 2101, 114th Gen. Assemb. (2025–2026).
- Tennessee General Assembly bill history reflects that HB 2108 passed both chambers and was transmitted to the Governor on May 7, 2026.
- Dedmon v. Steelman, 535 S.W.3d 431 (Tenn. 2017).
- Id. at 433–34, 441–43.
- Id. at 442–43.
- Tenn. Code Ann. § 24-5-113.
- Tenn. R. Civ. P. 26.02(1).
- Tenn. Code Ann. §§ 47-16-101 to -110.
- Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993); Fed. R. Evid. 702.
- Tamraz v. Lincoln Elec. Co., 620 F.3d 665, 670–72 (6th Cir. 2010).
