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Tort Reform: Evidence of Medical Expenses

Submitted by Phil Wiseberg on 28 Apr, 2023

Florida Tort Reform:  HB 837 and new Fl. Stat. 768.0427

(Medical Expenses)

On March 24, 2023, the governor signed a significant Tort Reform bill that had been passed by the Florida Senate.  This bill applies to any new lawsuits filed after the date that the bill was signed into law. WLC has summarized the key portions of the significant changes as they will affect our clients moving forward regarding medical expenses and what is now admissible.

The legislature in Fl. Stat. 768.04279(1)(d) has now codified what a Letter of Protection (LOP) is. LOP is now defined as “any arrangement by which a health care provider renders treatment in exchange for a promise of payment for the claimant’s medical expenses from any judgment or settlement of a personal injury or wrongful death action.” The document does not have to be called a LOP but can have any name so long as it works for the same purpose. The term includes any such arrangement, regardless of whether referred to as a letter of protection. The statute also defines a Factoring Company as “a person who purchases a health care provider’s accounts receivable at a discount below the invoice value of such accounts.”

Plaintiffs will now be limited in what they can offer as evidence as it relates to past and future medical bills in personal injury and wrongful death cases. Initially, evidence offered to prove past medical bills is limited to the amount actually paid for the services, regardless of the source of the payment for the services. There are five different categories of what is admissible evidence for past medical bills dependent on certain situations:

  1. If the Plaintiff has private health coverage that is not Medicare or Medicaid, only the amount that the private health insurer is obligated to pay the provider to satisfy the charges, plus the Plaintiff’s share of the medical expenses under the insurance contract is admissible.
    1. EXAMPLE: If the medical bill is $10,000 but the contractual reimbursement rate with private health insurer A is $250 with a required co-pay of $50 by Plaintiff, then the amount that can be presented to the jury is $300 and not the $10,000 initially billed.
  1. If the Plaintiff has health care coverage but treats under a LOP or does not submit the charges to their health care provider, evidence of the amount that the health care coverage would pay the provider to satisfy the unpaid charges, plus the Plaintiff’s share of the medical expenses under the insurance contract if it was submitted is admissible.
    1. EXAMPLE: If the medical bill is $10,000, and the Plaintiff has health insurance but treats under a LOP and the bills are not submitted to the health care provider, but the contractual reimbursement rate with private health insurer A is $250 with a required co-pay of $50 by Plaintiff, then the amount that can be presented to the jury is $300 and not the $10,000 initially billed.
  1. If the Plaintiff has no health care coverage or is covered through Medicare/Medicaid, evidence of 120% of the Medicare reimbursement rate in effect on the date of the treatment or, if there is no Medicare rate for the service, then 170% of the state Medicaid rate is admissible.
    1. EXAMPLE A: Plaintiff has no health insurance, or has Medicare, and treats with a doctor who bills $10,000 for the services provided but the Medicare reimbursement rate is $100. This information is admissible to prove that the reasonable value of services provided is only $120.
    2. EXAMPLE B: Plaintiff has no health insurance, or has Medicaid, and treats with a doctor who bills $10,000 for the services provided but the Medicaid reimbursement rate is $100. This information is admissible to prove that the reasonable value of services provided is only $170.
  1. If the Plaintiff treats under a LOP and the health care provider transfers/sells the bill to a third party, the amount the bills were sold for is admissible
    1. EXAMPLE: Plaintiff treats under a LOP and obtains services for $10,000.  The medical provider sells the bills to a third party for $500.  The $500 that the bills was sold/bought for is admissible.
  2. Any evidence of the reasonable amounts billed for services provided to Plaintiff is admissible.

Similarly, there is new information as to what is admissible for the value of future medical treatment.  There are three listed categories of the information admissible for the value of future medical treatment.

  1. If the Plaintiff has private health care coverage that is not Medicare or Medicaid, or is eligible for any such health care coverage, evidence of the amount that the health care coverage would pay for the future treatment, plus the Plaintiff’s share of the medical expenses under the insurance contract is admissible.
    1. EXAMPLE: The medical provider opines that Plaintiff needs $10,000 in future medical treatment and has private health insurance. Private health insurance would contractually pay $250 for the future treatment with Plaintiff to pay a $50 Co-Pay ($300 total) is now admissible as reasonable cost for future treatment.
  1. If the Plaintiff has no health care coverage or is covered through Medicare/Medicaid, or eligible for coverage, evidence of 120% of the Medicare reimbursement rate in effect on the date of the trial or, if there is no Medicare rate for the service, then 170% of the state Medicaid rate is admissible.
    1. EXAMPLE A: Plaintiff has no health insurance, or has Medicare, and the doctor opines that there is the need for $10,000 for future services and the Medicare reimbursement rate is $100 on the date of trial. This information is admissible to present only $120 as the reasonable value of future treatment.
    2. EXAMPLE B: Plaintiff has no health insurance, or has Medicaid, and the doctor opines the need for $10,000 for future services and the Medicaid reimbursement rate is $100 on the date of the trial. This information is admissible to present only $170 as the reasonable value of future treatment.
  2. Any evidence of the reasonable future amounts to billed for services determined to be medically necessary in the future.

The law also places new obligations on Plaintiffs as to disclosures related to LOPs.  Plaintiffs now have a requirement, as a condition precedent, for any medical treatment provided under LOPs, to disclose certain items including:

  1. A copy of the LOP
  2. Itemized and coded (CPT, HCPCS, or ICD) billing for all medical expenses sought to be paid
  3. If the accounts receivable were sold to a factoring company or other third party:
    1. The name of the party that purchased the account
    2. The amount that the account was purchased for including discounts provided below the invoice amount
  4. If the Plaintiff had health care coverage at the time of the treatment, the identify of such coverage
  5. Whether the Plaintiff was referred for treatment under a LOP, the identity of the person who made the referral
    1. If the referral was from Plaintiff’s attorney, the disclosure of the referral is permitted. Evidence of the referral is admissible to show bias. Also makes relevant the financial relationship between the law firm and provider including the number of referrals, frequency, and financial benefits obtained

In total, the damages that can be recovered for claims of personal injury or wrongful death may not include any amount that is over the amounts indicated above and also cannot exceed: the amounts actually paid, amounts necessary to satisfy bills that are due at the time of the trial but are not yet satisfied, and amounts necessary for reasonable medical treatment in the future.