On April 28, 2022, the Florida Supreme Court issued its decision in Dial v. Calusa Palms Master Association, Inc., which addressed the question:
DOES THE HOLDING IN JOERG V. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., 176 SO. 3D 1247 (FLA. 2015), PROHIBITING THE INTRODUCTION OF EVIDENCE OF MEDICARE BENEFITS IN A PERSONAL INJURY CASE FOR PURPOSES OF A JURY’S CONSIDERATION OF FUTURE MEDICAL EXPENSES ALSO APPLY TO PAST MEDICAL EXPENSES?
In short, the answer is no.
In a Florida civil tort action, the measure of a plaintiff’s compensatory damages is limited to the actual damages sustained. In most personal injury cases, the plaintiffs’ medical bills are discounted pursuant to contractual agreements between the plaintiffs’ health insurance providers and their medical service providers. Accordingly, the appropriate measure of compensatory damages for past medical expenses is the amount the plaintiffs, or their insurers, have actually paid, or are obligated to pay, not the gross amount initially charged by the medical providers. To allow plaintiffs to recover the full undiscounted amounts would result in a windfall of “phantom damages” which the plaintiffs would never be responsible to pay.
To accomplish this, plaintiffs are ordinarily able to present (board) the gross amount of their past medical expenses charged to the jury at trial. The medical expenses are then subject to a collateral source setoff after the verdict. In such cases, the jury only knows of the gross amount, and not the lower negotiated amounts that were actually paid or owed. However, under Florida Statute 768.76(2)(b), medical benefits paid pursuant to a federal program, such as Medicare, are not considered collateral sources. Therefore, when medical expenses have been paid under Medicare, plaintiffs are only able to present the net amounts actually paid by Medicare at trial, not the gross amounts charged by the medical providers.
In Joerg v. State Farm Mutual Automobile Insurance Co., 176 So. 3d 1247 (Fla. 2015), the Florida Supreme Court held that evidence of future medical expenses is not subject to this Medicare exception, and evidence of a plaintiff’s eligibility for future Medicare benefits is inadmissible. As Joerg was silent with regard to past medical expenses paid by Medicare, this opened the door for plaintiffs to argue that Joerg allows them to introduce into evidence the gross amount of their medical bills, not the lesser amounts Medicare paid, for both future and past medical expenses. However, in Dial, the Florida Supreme Court conclusively held that Joerg has no application to past medical expenses.
The Court’s ruling in Dial finally and unequivocally establishes that plaintiffs whose past medical expenses were paid by federal programs such as Medicare can only board the amounts actually paid, not the fictitious amounts that no one is actually responsible to pay. One might ask, if the net calculation is the same whether the trial court applies a post-verdict setoff or only allows the medical expenses actually paid, what difference does it make? While the post-verdict setoffs theoretically eliminate “phantom” past medical expense damages, juries are led to believe the plaintiffs’ damages are greater than they actually are. This may prompt them to inappropriately inflate other damages. For example, juries may consider the amount of the plaintiff’s medical expenses when determining subjective non-economic damages, such as pain and suffering. Oftentimes, juries apply a multiplier of the medical expenses to compute their non-economic awards. Limiting evidence of past medical expenses to the amounts that are actually paid can help keep down a total award. Dial should help in this regard.