Collateral Source Rule Does Not Apply to Louisiana Workers’ Compensation Insurance Payments

As we previously reported, the Louisiana Supreme Court granted writs in a case questioning whether worker’s compensation benefits are subject to the collateral source rule. Simmons v. Cornerstone Investments, LLC, 252 So. 3d 491, writ granted, 18- 0735 (La. 9/21/18). The lower courts granted the third-party defendants’ request to limit the plaintiff’s medical bill recovery to only the amount paid under the worker’s compensation schedule of benefits.

As of today, the Court ruled that “the amount of medical expenses charged above the amount actually incurred is not a collateral source and its exclusion from the purview of the jury was proper.” Simmons v. Cornerstone Investments, 18-0735 (La. 5/8/19).

Simmons v. Cornerstone Investments: Background

By way of background, Plaintiff was employed by Cintas Corporation, at its warehouse in Pineville, Louisiana. Plaintiff was working in the course and scope of his employment when he was injured on October 12, 2011, while attempting to close a building’s roll-up rear bay door.

Plaintiff received workers’ compensation benefits from Cintas, including disability and medical expenses. The total amount of Plaintiff’s medical bills was $24,435.00; this amount was reduced, however, to $18,435.00 in accordance with the Louisiana Workers’ Compensation schedule. Thus, there was a “written off” amount of $6,000 at issue in the third-party tort suit against the Defendants, the building owner and its insurer.

The Defendants filed a motion in limine seeking to exclude from trial the amount of “written off” medical expenses due to workers’ compensation payments and include only the medical expenses that were actually paid by workers’ compensation. In turn, Plaintiff filed his own motion in limine seeking to have the totat amount in medical charges presented to the jury as a collateral source. The trial and intermediate appellate court agreed with the Defendants and prohibited the introduction of Plaintiff’s total charged medical bills.

Louisiana Supreme Court Ruling

On supervisory writ to the Louisiana Supreme Court, Plaintiff argued, among other things, that La. Code Evid. art. 414 prohibits, in a jury trial, any mention of medical expenses paid by a workers’ compensation insurer. Conversely, the Defendants asserted that Article 414 was written to prevent a jury from hearing about the source of the payment, but not the amount.

The Louisiana Supreme Court agreed with the Defendants, stating that “[s]uch an approach…perfectly preserves the collateral source rule.” Id. As it relates to Plaintiff’s patrimony arguments, the Court did not find any diminishment as he did not actually incur the “fictional expenses”. Id.

Notably the Court referenced a federal maritime case tried and successfully argued on appeal by our own Georges Legrand and Adam Sanderson that where medical expenses are paid through workers’ compensation coverage provided by the employer pursuant to Longshore and Harbor Workers’ Compensation Act (LHWCA), an injured plaintiff may not recover from a third-party tortfeasor for the full amount of medical expenses billed but not paid. See Deperrodil v. Bozovic Marine Inc., 842 F.3d 352 (5 Cir. 2016). While Deperrodil had no precedential effect as to the Simmons case, the Court cited with approval the analysis interpreting the collateral source rule.

Simmons: The Upshot

To summarize, Simmons brings the “written off” amount created by a reduced reimbursement fee under the Workers’ Compensation Act in line with those cases pertaining to the Medicaid program or an attorney-negotiated medical discount (i.e. not a collateral source). The plaintiffs in these types of cases did not actually incur, and need not repay, the “written off” amounts at issue. Therefore, any recovery in addition to the reduced amount of medical bills would be a windfall to the plaintiff.

This article updates Adam Sanderson’s article, Collateral Source Rule Applies to Louisiana Workers’ Compensation Insurance Payments—or Does It?