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Florida Supreme Court: Collateral Source Rule & Medicare

Are Medicare benefits a collateral source that a jury should consider when determining future damages? The Florida Supreme Court said NO in Joerg v. State Farm. John Joerg, Jr., etc. et. al v. State Farm Mutual Insurance Co. (October 15, 2015).

What is a collateral source? The collateral source rule, or collateral source doctrine, is an evidentiary rule in Florida that prohibits the admission of evidence that the plaintiff / victim has received compensation from some source other than the damages sought against the defendant. Many people can relate to receiving health insurance benefits or disability benefits following an accident. These benefits can be considered a collateral source. And before the decision in Joerg, the jury was permitted to consider these payments when determining future damages. The collateral source rule in Florida is codified in Florida Statutes Section 768.76. The statute requires the court to reduce an award by the amount which has been paid for the benefit of the claimant from a collateral source because evidence of the collateral source is barred at trial. But, there are certain exceptions to this rule. One primary exception is that there are no reductions "for collateral sources for which a subrogation or reimbursement right exists." F.S. §768.76 ((1)2014). An example of a subrogation claim or claim for reimbursement is when your health insurance company wants part of your personal injury settlement as compensation for the benefits its paid arising from the accident. The statute also directly sets forth that benefits received under Medicare, or any other federal program providing for a Federal Government lien on or right of reimbursement from the plaintiff's recovery, the Worker's Compensation Law, the Medicaid Program of Title XIX of the Social Security Act or from any medical services program administered by the Department of Health shall not be considered a collateral source.

In Joerg, the Florida Supreme Court held that trial courts should exclude evidence of an injured victim's eligibility for future benefits from Medicare, Medicaid, and other social legislation as collateral sources. This decision overturned the 2nd District Court of Appeals (2nd DCA) decision. The 2nd DCA held that the evidence was admissible because Joerg (the Plaintiff) did not earn the Medicare benefits he received, thus, the jury should be allowed to consider Medicare's rates in calculating future medical expenses. Mr. Joerg's son, a disabled adult, was injured when a car hit him as he was riding a bike. The Joergs had uninsured motorists coverage with State Farm and sued for benefits. The jury awarded the family $469,000 to pay for future medical expenses. State Farm appealed the trial verdict to the 2nd DCA, the 2nd DCA granted State Farm's appeal and granted a new trial on the basis that evidence of Medicare benefits should have been admitted to evaluate damages. The Joergs appealed to the Florida Supreme Court, arguing the 2nd DCA's ruling conflicted with decisions from other Florida appellate courts. Florida's highest court agreed and came out with a clear decision. That decision excludes evidence of collateral sources when determine the claimants future damages.

Source: http://www.law360.com/articles/714914/fla-high-court-overturns-medicaid-ruling-for-state-farm

 

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