Supreme Court Establishes Shifting Burden of Proof for Additional Medical Opinions (“AMO”)

The difference between the amount charged and the amount paid for medical treatment can be substantial. Knowing the dollar amount of the medical specials that a plaintiff will be allowed to seek at trial is often critical in case evaluation and resolution. In this context, the Louisiana Supreme Court provided a “bright-line” rule in Bozeman v. State, 03-1016 (La. 7/2/04), 879 So. 2d 692, that a plaintiff can only seek the amount actually paid for medical treatment, when it is funded by Medicaid. Our state’s highest court then added, in Simmons v. Cornerstone Investments, LLC, 18-0735 (La. 5/8/19), 282 So.3d 199, that only the amount actually paid for medical specials may be sought, when it is funded by workers’ compensation insurance. The “written off” amount is considered a “phantom charge” that the plaintiff will never pay. Some questions remain as to how courts will apply the holding and analysis of Simmons.

The rationale behind Simmons is that any discount in the amount of medical expenses given to the workers’ compensation carrier does not constitute a “collateral source” because the plaintiff did not give anything in exchange for the discount. Roughly six months after Simmons, the Louisiana First Circuit Court of Appeal reversed the trial court’s denial of the defendants’ motion in limine seeking to exclude evidence of the plaintiff’s total past medical expenses. Love v. Nelson, 2020-1050 (La.App. 1 Cir. 1/13/21), 2021 WL 118936, *1. Relying solely upon Simmons, the appellate court stated, “[T]he amount of medical expenses charged above the amount actually incurred is not a collateral source … . Accordingly, we find the trial court abused its discretion, and the motion in limine is granted and evidence of medical expenses not actually owed and paid by or on behalf of plaintiff … is excluded from evidence at the trial.” Id.

Federal courts, relying upon Simmons, have held that the collateral source rule does not apply to third-party-funded past medical expenses. See Collins v. Benton, Civ. A. No. 18-7465, 2021 WL 638116, *5, 8 (E.D. La. Feb. 17, 2021). However, see Lee v. United Rentals, Inc., Civ. A. No. 18-977, 2021 WL 2184763, *3 (M.D. La. May 28, 2021), where the court granted the defendant’s motion in limine to exclude evidence of the plaintiff’s past medical expenses not paid by workers’ compensation. Only the amounts paid by the employer/workers’ compensation carrier would be presented to the jury in support of the plaintiff’s past medical expenses. The court then added:

“However, there are two matters left in contention: first, may the Plaintiff offer evidence of the amounts charged by Plaintiff’s providers in connection with his back injury which [the employer] refused to pay? Second, may Plaintiff present evidence of the market rate for Plaintiff’s future medical needs or is he relegated to the amounts set out in the Workers’ Compensation Fee Schedule? As to both items, Simmons is not controlling.”

In other words, the federal court in Lee found that Simmons applied only to past medical expenses, but it did not apply to future medical expenses (i.e., the plaintiff would be allowed to present the full amount of anticipated future medical charges to the jury). As a federal court sitting in diversity, the Lee court applied the law of the state. Erie R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). The findings in Lee may be correct, but, until it is definitively resolved by legislative act or by the Louisiana Supreme Court, parties will likely continue to debate what impact the reasoning of Simmons will have as to future medical charges past the date of trial. If, as held in Lee, the reduced workers’ compensation rate is irrelevant to future medical specials, then plaintiffs will seek the full future medical charges. This blog does not address the potential impact of the “Civil Justice Reform Act of 2020” which can reduce a plaintiff’s ability seek full medical charges for cases arising after January 1, 2021 in some circumstances.

Louisiana Code of Civil Procedure article 1464 allows a defendant to select a physician to perform a physical and/or mental examination of a plaintiff to challenge the plaintiff’s claimed physical and mental injuries. This is called an Additional Medical Opinion (AMO); this was previously referenced as an Independent Medical Examination (IME). Earlier this year, the Louisiana Supreme Court, outlined the “good cause” requirement of the statute—an essential element required to proceed with an AMO. But, what remained as a question was the scope of an AMO and which party had the burden to deal with requested restrictions on the physician’s medical exam. This question was answered: In Augustine v. Safeco Insurance Company of Oregon, the Louisiana Supreme Court held that after “good cause” has been shown for the examination, the party seeking to limit the scope of the AMO bears the burden to justify the restrictions.

In Augustine, a sequel to Hicks v. USAA General Indemnity Company, Et al, the Court held that if the party to be examined for the AMO, usually the plaintiff, wants to place limits upon the examination, that party then has the burden of proof to justify the need for any restrictions or limitations with competent evidence. This ruling appears to show a trend in which the Court is confirming a defendant’s ability to obtain an AMO to support its defenses to a personal injury claim. Augustine follows another Supreme Court decision from March of 2022, in which the Court held that a party establishes “good cause” for an AMO if that party shows a “reasonable nexus” between the requested examination and the condition in controversy. See Hicks v. USAA General Indemnity Company, Et al. The Hicks decision eased the hurdles that defendants faced when seeking to compel AMOs pursuant to Louisiana Code of Civil Procedure article 1464. For more information on the Hicks decision, see our prior blog here. Supreme Court Clarifies “Good Cause” for Additional Medical Opinion (“AMO”) (keoghcox.com)

In Augustine, the defendants requested an AMO. The plaintiff agreed to the examination, but the parties were unable to agree on “certain restrictions” the plaintiff sought to impose on the scope of the examination. The defendants ultimately filed a Motion to Compel regarding this issue. The District Court limited the examination to only those tests that the plaintiff’s treating physicians had performed. The District Court also noted that it did not want the AMO to turn into a “fishing expedition.” The Court of Appeal denied the defendant’s request for review of the Trial Court’s decision. The defendants then sought relief from the Supreme Court, which vacated the Trial Court’s ruling and remanded the case for further proceedings consistent with its opinion.

In its opinion, the Supreme Court set forth the burden of proof each party has in the context of a Motion to Compel an AMO. As outlined in Hicks, the party requesting the AMO initially has the burden to establish “good cause” for the AMO. Importantly, the Augustine court found that once “good cause” has been found, “the court should presume that the examination will be conducted in a reasonable manner.” Because it is presumed the examination will be conducted reasonably, if a party opposing the AMO wants to place restrictions on the examination, the burden now shifts to that party to establish “special circumstances” that justify the restrictions they request. To meet this burden, the opposing party must produce “competent evidence” to establish (1) the need for the restriction and (2) that harm that will result if the restrictions are not imposed. The type of evidence that may support AMO restrictions under Augustine likely will vary depending on the unique facts of each case. However, Hicks and its “sequel,” Augustine, provide clarification and guidance to parties seeking to compel or limit an AMO under article 1464.

Case References:

Augustine v. Safeco Insurance Company of Oregon, 2021-01753 (La. 10/1/22), __ So.3d __.

Hicks v. USAA General Indemnity Company, Et al., 2021-00840 (La. 3/25/22), 339 So.3d 1106.

Written by Chad A. Sullivan and George A. Wright

In a case handled by our firm, a Lafayette-based global catering and life support client was sued by an employee based in Dubai for alleged violations of the Americans with Disabilities Act. The jury unanimously found that the employer (1) did not discriminate against the plaintiff because of a disability or (2) retaliate against him because he raised a complaint regarding the alleged discrimination.

The plaintiff had a written contract of employment with a one-year term that automatically renewed if he was not terminated. Upon the contract expiration date, the employer advised plaintiff that the contract would not be renewed for a successive term.

Plaintiff, an Army veteran, suffered from PTSD following his military service and deployment in Iraq. He claimed defendant discriminated against him on the basis of his PTSD, which he claimed as a mental health disability. Plaintiff further claimed that defendant retaliated against him after he complained to his direct supervisor and the head of human resources about the alleged discrimination. To support his case, plaintiff claimed he was not disciplined before his termination and did not receive negative performance reviews during employment. Significant pre-trial motion practice occurred and framed the issues for trial in two ways.

First, the defense learned of actions taken by plaintiff following the termination of his employment that would have provided a legitimate basis for termination had the actions been discovered before he was terminated. The defense argued that evidence of such “after-acquired” misconduct was relevant to credibility and independently relevant to calculate backpay that plaintiff sought, citing McKennon v. Nashville Banner Pub. Co. and McClung v. Hajek. Over defendant’s objection, the Trial Court excluded the evidence as highly prejudicial, instead finding that back pay was an equitable remedy to be decided by the Court in a subsequent evidentiary hearing related to the issue of back pay.

Second, the defense argued that non-certified medical record evidence submitted by plaintiff was hearsay and thus inadmissible to prove a disability. The Court agreed with the defendant and issued a limiting instruction that the jury was not to consider uncertified medical records for the truth of the matter asserted.

At trial, our client presented ample evidence of plaintiff’s performance deficiencies with respect to the vetting of vendors, which jeopardized the employer’s government contracts and the jobs of other employees. The majority of plaintiff’s performance issues arose in Dubai, plaintiff’s key area of oversight. Therefore, it was unbelievable that he would not know of, or take responsibility for, those performance deficiencies. In addition, the language of the written employment contract allowed for non-renewal of the contract. In a unanimous verdict as required by Fed. R. Civ. P. 48, the jury ultimately found that although the plaintiff proved he suffered a disability, he failed to prove discrimination or retaliation under the Act.

References:

Staples v. Taylor International Services, Inc., et al., 6:20-cv-00192-RRS-CBW.

McKennon v. Nashville Banner Pub. Co., 513 U.S. 352, 361–62, 115 S. Ct. 879, 886, 130 L. Ed. 2d 852 (1995).

McClung v. Hajek, 79 F.3d 1145 (5th Cir. 1996).