I am happy to announce that my article, Florida Supreme Court Rules That the Collateral Source Rule Bars Evidence of Future Government Benefits in Personal Injury Cases, was published in the January 2016 issue of The Advocate, a publication of the South Palm Beach County Bar Association. I have reproduced the article below.
Florida Supreme Court Rules That the Collateral Source Rule Bars Evidence of Future Government Benefits in Personal Injury Cases
by Scott J. Edwards
In Joerg v. State Farm, 40 Fla. L. Weekly S 553 (Fla. Oct. 15, 2015), the Florida Supreme Court resolved a split among the Dis- trict Courts of Appeal to hold that evidence of future governmental benefits, such as Medicaid and Medicare, is inadmissible as evidence to reduce the amount of future damages in a personal injury case under the Collateral Source Rule.
The Collateral Source Rule regulates both evidence and damages. In a personal injury case, a trial court is required under Florida Statutes § 768.76(1) to reduce the plaintiff’s damages award by all amounts that have been paid for the benefit of the plaintiff from any collateral source. However, there are no reductions in damages for any collateral sources for which a right of subroga- tion or reimbursement exists. Section 768.76(1) explicitly states that benefits from Medicaid and Medicare are not collateral sources under the rule, because these programs retain a right of reimbursement.
As a rule of evidence, the Collateral Source Rule forbids admission of evidence of payments received by a party from insurance or government benefits. The rule is based on a concern that such evidence will cause a jury to reduce the amount of a damages award, believing that the plaintiff has already been compensated by insurance or governmental benefits. The evidentiary Collat- eral Source Rule thus prevents a jury from altering its verdict due to a belief that the plaintiff will receive a windfall recovery.
However, in Florida Physician’s Insurance Reciprocal v. Stanley, 452 So. 2d 514 (Fla. 1984), the Florida Supreme Court stated an exception to the Collateral Source Rule, allowing a party to introduce evidence of free or inexpensive services from govern- mental or charitable programs to reduce the amount of future damages awarded to a plaintiff. The supreme court concluded that the Collateral Source Rule should only apply to benefits earned by the plaintiff.
Florida courts, however, have struggled to apply the Stanley rule, because it is often unclear whether government benefits are free and available to all, or earned due to payments such as payroll taxes and deductions from Social Security benefits. In the Joerg case, the Second District Court of Appeal ruled that a plaintiff’s future Medicare benefits were free and unearned, and therefore admissible into evidence under the Stanley rule. State Farm Mutual Automobile Insurance Co. v. Joerg, 38 Fla. L. Weekly D1378 (Fla. 2d DCA June 21, 2013).
The Florida Supreme Court rejected the Second District’s conclusion that Medicare benefits are free and unearned. Joerg v. State Farm, 40 Fla. L. Weekly S 553 (Fla. Oct. 15, 2015). Rather, under Federal law, Medicare is a “secondary payer,” authorized to make conditional payments in situations where a primary payer such as an insurer or a tortfeasor does not make prompt pay- ments. The administrators of the Medicare program vigorously enforce its right of repayment from primary payers, including the filing of independent causes of action to recover payments for medical expenses that should have been paid by primary in- surance or a tortfeasor. Medicare’s right of recovery is broad: it can recover funds paid to any entity, including beneficiaries, doctors, attorneys, and private insurers. Medicare can also recover double damages and civil penalties when a primary payer fails to properly reimburse the government for payments made by Medicare.
Thus, rather than being a “free” government benefit, future Medicare benefits are instead a significant liability for all beneficiar- ies: even if a plaintiff does not directly pay for Medicare benefits, he or she nonetheless must reimburse Medicare with any per- sonal injury judgment they receive. Furthermore, Medicare’s right of reimbursement prevents a plaintiff from receiving windfall damages on top of benefits paid by Medicare. Therefore, evidence of future Medicare benefits should be excluded from evi- dence.
The Florida Supreme Court’s ruling is further supported on policy grounds, as evidence of future Medicare benefits is prejudi- cial and speculative. There is no way of knowing the amount of government benefits a plaintiff will receive in the future, or whether the government programs will always be available due to changes in the law.
Finally, the Joerg court’s holding also applies to Medicaid benefits, as Medicaid is likewise a secondary payer with rights of reimbursement.
Scott J. Edwards of Scott J. Edwards, P.A. is an attorney with a practice focused on appeals and litigation support for personal injury, insurance law, and commercial litigation matters. He can be reached at firstname.lastname@example.org or (561) 331-0779