Article Summary

• In a recent win for MBLB Attorney Andrew Miner, a trial Court limited evidence of Plaintiff’s medical billing to actual payments by Medicaid, meaning the jury will not see the higher, total billed amounts.
• This evidentiary rule also applies to workers’ compensation medical payments under Louisiana’s collateral source rules.
• For Medicare and private insurance, the jury will still see full billed amounts under Louisiana’s collateral source rules.
• There is pending legislation in Louisiana to further reform Louisiana’s skewed litigation medical billing rules.

On January 1, 2021, the Louisiana legislature’s most recent reforms of the Collateral Source Rule went into effect. Four years later, we are starting to see some tangible results. Louisiana Revise Statute § 9:2800.27 addresses how trial courts deal with an injured plaintiff’s incurred medical costs in civil litigation. The statute provides for three different methods of addressing past medical costs depending on who paid for those costs.

MBLB Attorney Limits Damages Evidence

In what appears to be a case of first impression under this statute, a Louisiana trial court agreed with the arguments of Mouledoux, Bland, Legrand & Brackett attorney Andrew Miner, drastically limiting the amount of damages a plaintiff was able to both show to the jury, and recover at trial, when the plaintiff’s medical treatment was paid for by Medicaid. The trial court ruled that the Plaintiff was limited to presenting and collecting only the amounts Medicaid paid to the plaintiff’s medical providers and excluding from trial the total amounts billed by those providers. The practical result is that the jury will no longer see or hear about the nearly $70,000 the plaintiff’s medical providers billed to Medicaid, but only the $3,580 Medicaid paid for that treatment.

Medicaid and Workers’ Comp Versus Medicare or Private Insurance

Medicaid is government sponsored health insurance that is provided, typically, at no cost to the insured, based on income or disability. Medicaid pays for treatment based on a payment schedule, which provides the amount Medicaid will pay for each specific medical task performed. These payments are typically drastically lower than the amount medical providers bill for those tasks, and as a result significant amounts of the provider’s bills are written off or adjusted.

La. R.S. § 9:2800.27 provides that medical costs paid for by Medicaid are limited to the amounts Medicaid actually paid to the provider, but the statutory language is vague as to what exactly is admissible at trial. The statute treats medical costs paid by Workers’ Compensation insurance the same way it treats medical costs paid for by Medicaid: only the amounts paid by such insurance is owed by a tortfeasor. If a plaintiff’s claimed medical costs were paid by either Medicaid or under the Workers’ Compensation Act, it is important to obtain itemized billing records from the provider so damages can be appropriately limited.

La. R.S. § 9:2800.27 treats other payors differently. Specifically, medical costs paid for by private health insurance, Medicare, or other third-party payors (e.g. a third-party funding company) do not result in the same pre-trial reductions. Instead, under the current version of the law, the jury only sees the much higher amount the medical providers billed. It is only after trial at a special hearing with the trial judge that these medical costs are reduced to the amounts actually paid to the provider.

When the medical costs are paid for by private health insurance or Medicare, the statute entitles the plaintiff to a discretionary penalty, which can be as much as 40% of the difference between the amount paid and the amount billed. This unearned “bonus” is ostensibly to compensate the plaintiff for the premiums paid for the insurance and to cover their attorney’s fee.

Plaintiffs’ Work Around and Potential Reforms

To get around the limitations, more and more plaintiffs with Medicaid or other health insurance simply do not use the coverage, and instead have the medical provider bill the attorney directly or put the treatment on lien.

The latest round of collateral source reform bills proposed during the current legislative session include several seeking to close this and other loopholes. Specifically, proposed House Bill 440 would require an injured party with health insurance, Medicare, or Medicaid to use that coverage to pay for their treatment. If they do not, the bill provides for a statutory failure to mitigate defense, which would allow the defendant to introduce evidence of what the amount paid would be if insurance was used.

Another exciting bill, proposed House Bill 34, would amend La. R.S. § 9:2800.27 to allow Defendants to introduce evidence as to the reasonableness of a medical provider’s bill, when that bill is not charged to insurance (i.e. whether the provider is billing at an excessive rate for purposes of litigation to an attorney or third-party funding company, for example).

Finally, proposed Senate Bill 230 would limit all past medical costs to the lesser amount of what the medical provider was paid, 120% of Medicare’s reimbursement schedule, or 170% of Medicaid’s reimbursement schedule.

It will be interesting to see what the Legislature does this session on these important issues. We will be tracking their progress closely and providing regular updates on any changes.