On June 30, 2020, the Louisiana Legislature passed House Bill 57, the Civil Justice Reform Act of 2020, which represents a compromise on the previously sought tort reforms that were vetoed by Governor John Bel Edwards in the prior legislative session. Governor Edwards signed HB 57 into law on July 16, 2020, and several tort reforms became law after January 1, 2021.
You can read a detailed analysis of what tort reforms were accomplished and what the Act failed to do in the article, “Louisiana Legislature Passes Civil Justice Reform Act Of 2020.”
As noted in that article, the implementation of the medical expense provisions of the Act will likely generate several issues that will need to be litigated and interpreted by our Louisiana courts.
Collateral Source Rule and Calculation of Recoverable Medical Expenses Under the Act
The Civil Justice Reform Act of 2020 applies to all accidents occurring after January 1, 2021. Under the Act, a claimant’s recovery of medical expenses is now limited if payment is made by private health insurance or Medicare, long considered collateral sources under Louisiana law. The court is instructed to award the claimant up to 40% of the difference between the amount billed by the healthcare provider and the amount paid by Medicare or the health insurance.
It is anticipated that the plaintiff’s bar may seek to skirt the provisions of the Act by having their clients treat with doctors who do not accept Medicare or private health insurance or, alternatively, by simply instructing their client not use those collateral benefits to pay their medical expenses. Instead, either the attorneys will pay and/or guarantee payment to the healthcare provider so that their client can recover the higher charged amount.
The Duty to Mitigate Damages
Under Louisiana law, a claimant has a duty to mitigate his or her damages. Generally, the duty to mitigate is an affirmative defense that must be proven by the defendant. Arguably, the duty to mitigate would require a claimant to utilize health insurance and/or Medicare benefits when available to reduce the damages incurred. It would seem that defendants now can argue that a claimant should not be allowed to recover more than the amount that would have been recoverable under the Act had the claimant utilized his or her health insurance and/or Medicare benefits.
It could further be argued that claimants should have their recovery limited if they choose to treat with medical providers who are not covered by their health insurance or Medicare. While a court is not likely to instruct a claimant as to which physicians he or she may see, the court could allow the defendants to put on evidence of what the medical treatment would have cost if the plaintiff had gone to a provider covered by insurance. To do so, defendants would likely be required to present testimony from a medical billing expert.
Under the Act, the jury is required to be instructed only as to the total medical expenses charged, and the calculation of recoverable medical expenses under the Act is to be made after the jury verdict, by the presiding judge. This will complicate the ability of a defendant to argue the duty to mitigate under the Act, as it would appear that any such arguments would have to be presented to the court alone after a jury verdict is rendered. This provision may severely inhibit the ability of defendants to argue that claimants failed to mitigate their damages by not utilizing health insurance or Medicare benefits.
It is anticipated that there will be significant litigation over the interpretation of the Civil Justice Reform Act of 2020 in the coming months and years. If claimants are allowed to avoid the collateral source provisions of the Act by not using their insurance benefits, the collateral source provisions of the Act will be rendered virtually ineffective.