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.