What Is the Collateral Source Rule in Louisiana

The purpose of civil damages is to “make the victim whole.” But what if the victim is able to receive more than his special damages out of his own pocket because he has a third party who has to pay for his medical care? On May 9, 2019, the Louisiana Supreme Court issued an important opinion limiting the application of the collateral source rule in personal injury lawsuits. In Simmons v. Cornerstone Investments, LLC, et al., 2018-CC-0735 (La. 5/8/19), the court`s decision held that the source of coverage rule does not apply to medical expenses in excess of the amount actually paid by a workers` compensation insurer under the Workers` Compensation Fund. In Louisiana, the answer is no. According to the so-called collateral source rule, “an aggrieved party cannot profit from it, and the unauthorized recovery of an aggrieved claimant cannot be reduced because the claimant receives funds from sources independent of the applicant`s supply or contribution.” Bozeman gegen Stand, 03-1016, (La.7/2/04), 879 Sun.2d 692, 698. In Hoffman v. 21st Century N. Am. In. Co., 2014-2279 (La. 10/02/15); 209 So.3d 702 The Louisiana Supreme Court decision held that the source of coverage rule did not apply to depreciations negotiated by counsel or discounts on medical expenses obtained as a result of the litigation.

Hoffman at 706. In the Guillory case, the Western District of Louisiana refused to apply the source of guarantee rule if the third-party payer and the medical provider negotiated a medical bill themselves, without consideration from the plaintiff. The collateral source rule takes into account the fact that the medical bills of many plaintiffs are paid by third parties after an accident, such as. B private health insurance companies or Medicare. The source of security rule states that an aggrieved defendant cannot rely on these payments to reduce the damage it owes to the plaintiff. Instead, the defendant owes the plaintiff the same amount of damages as it owes if no third-party payer had contributed anything. The court then debated its verdict in Hoffman v. 21st Century North American Ins. Co., 209 So.2d 702 (La. 2015), which concluded that the collateral source rule does not apply to medical reimbursements negotiated by lawyers.

In this case, the court focused on the fact that the discount was not an amount that the plaintiff had paid or had already had to pay. Allowing recovery would be contrary to the “basic principles of unauthorized recovery” to make the claimant complete. Since the plaintiff “also did not undergo a reduction in its assets in order to obtain depreciation,” there was nothing that the defendant could repay or for which the plaintiff could do so completely. But what if the victim pays for health insurance? Would the claimant be able to recover the difference between what the health care provider billed and what they paid from Medicare or a private insurer such as Blue Cross? Bozeman explains that the victim is entitled to the “advantage of the arrangement” and can reap the harvest resulting by far the most important change is the change in the “collateral source rule”. The appeal effectively limits the plaintiff`s damages to the amount of medical expenses actually paid. Current law generally allows a claimant to claim the total amount charged and ignores any discount on the total amount negotiated by an insurance company. The new law provides that after a jury verdict, the judge will be responsible for awarding the plaintiff 40% of the difference between the amount charged by a medical provider and the amount paid by a plaintiff`s health or health insurance, unless the defense proves that such a sentence is inappropriate. In addition, HB57 lowers the jury threshold (i.e., the amount in dispute required for a jury trial rather than a trial) from $50,000 to $10,000. Other notable changes include the repeal of previous legislation prohibiting proof of non-use of seat belts by a party for harm reduction purposes. Many States have abolished or restricted the guarantee source rule. Critics of the collateral source rule argue that it allows claimants to recover the same costs twice. Proponents of the rule argue that it prevents defendants from evading full responsibility for their negligent acts.

The services and what their insurer, Medicaid, paid for those services because the victim did not separate from his or her inheritance to receive Medicaid benefits. Bozeman at 705. A claimant is always entitled to compensation for their insurance underwriting costs. The old collateral source rule promoted the policy that illicit offenders should not be entitled to insurance from a tort victim for whom that victim has paid tort premiums. Bozeman, 879 Sun. 2d to 698, 703-04. The new law does not abandon this policy. Under the Judicial Reform Act of 2020, a plaintiff is entitled to 40% of the difference between the amount invoiced and the amount actually paid by his insurer in return for the cost of taking out the insurance, unless the defendant proves that reimbursement of the procurement costs would make the award unreasonable. This rule should continue to encourage people to take out insurance and not lead to an undeserved advantage for crimes. The collateral source rule is a rule of law that prevents a defendant from presenting evidence that a plaintiff has received payment from a third party.

For example, a plaintiff is injured in a car accident with a defendant. The Applicant is hospitalized for his injuries. The applicant`s health insurance company pays all of the applicant`s hospital bills. The plaintiff brings an action for bodily injury against the defendant. According to the guarantee source rule, the defendant cannot provide evidence in court of the payment of the plaintiff`s hospital bills by the health insurance company. Therefore, if the plaintiff wins the case, he may be able to recover the amount of his hospital bills from the defendant, even if the health insurance company has already paid that amount. The guarantee source rule is not limited to insurance payments. The rule applies to most payments made by third parties to an applicant.

Finally, in Collins v. Benton, 2019 U.S. Dist. LEXIS 214241 (E.D.La. 12/12/19)(J. Brown) ordered the court to produce the finance company`s agreement with the health care provider to determine whether the guarantee source rule applied to the difference between what the finance company paid and the total amount of the invoice, citing Bozeman, Hoffman and Simmons….