Use of Third Party Billing Agent Not Enough to Invoke Collateral Source

In the personal injury lawsuit, Walter George v. Progressive Waste Solutions of LA, Inc., 2022-CC-01068, the Louisiana Supreme Court found that the collateral source rule does not apply if there is no evidence Plaintiff was released from their original obligation to pay their medical bills, even if Plaintiff’s medical providers entered into an agreement with a third party billing agent to accept less than the billed amount.

Walter George v. Progressive Waste Solutions of LA, Inc. – Background

On December 29, 2015, Plaintiff was picking up garbage on his street when he was struck by a Progressive Waste garbage truck and sustained injuries. Plaintiff was treated by Champion Medical Center (“Champion”) for his injuries and received a back surgery totaling $192,020.14.

On December 1, 2016, Champion entered into a “Professional Service Agreement” with Ascendant Healthcare (“Ascendant”). The agreement provided that Ascendant would act as the billing agent for Champion. Champion would invoice Ascendent for the full price of the back surgery but accept half the billed charges as full and final reimbursement for services rendered. Ascendant also agreed to pay Champion by a certain date. Champion further assigned to Ascendant their rights to a medical lien regarding any proceeds recovered by Plaintiff under La. R.S. 9:4752.

On January 17, 2017, Plaintiff’s former counsel executed a Letter of Guaranty and Protection. The letter acknowledged Ascendent retained a privilege on any net proceeds payable to Plaintiff from the amount recovered in the lawsuit. The letter was only signed by the attorney.

On March 10, 2020, and after initial discovery, Progressive filed a Motion in Limine, seeking to exclude Plaintiff’s medical bills charged to Ascendant. Progressive argued the billed amount was not relevant because there was no evidence Plaintiff was personally responsible for payments to Ascendant and therefore the collateral source rule did not apply. Plaintiff argued they were liable to Ascendant for the full amount of the medical bills as a result of the agreement between Ascendant and Champion and therefore should be entitled to show the jury the full-billed medical charges. After some delays, the trial court granted Progressive’s motion, and ruled Plaintiff may only present the discounted medical charges at trial.

Court of Appeal, First Circuit, Denies Plaintiff’s Writ Application

The Court of Appeal, First Circuit, denied Plaintiff’s writ application, with one dissent. The dissent noted in the absence of evidence showing Plaintiff was not liable for the full amount billed, Progressive could not subtract the discounted medical bills from a theoretical damage award to Plaintiff.

Louisiana Supreme Court Reversal

Plaintiff appealed to the Louisiana Supreme Court. The Court granted Plaintiff’s writ application, and reversed.

The issue for the Court was whether Plaintiff had been released from his original and separate obligation to pay their medical bills. The Court noted Plaintiff and Ascendant agreed to the assumption of Plaintiff’s obligation, but that Ascendant’s agreement with Champion did not release Plaintiff from their obligation. Plaintiff was not a party to the agreement between Ascendant and Champion, nor was there any language in the agreement releasing Plaintiff from their obligation to pay their medical bills as charged.

Similarly, the Court noted the letter of guarantee from Plaintiff’s counsel did not evidence any intent to release Plaintiff from any obligation to pay their medical bills as charged. The Court found the collateral source rule did not apply because: 1) the application of the rule to this particular case would not support the policy consideration of tort deterrence, and 2) Plaintiff had not diminished his patrimony to receive medical treatment from his medical providers, and 3) there was no indication Plaintiff would have received a “double recovery,” should he be awarded the full-billed charges.

Reverse and Remanded.