How to Exclude Payments Made by a Health Insurance Carrier in Med/Mal Cases
posted on March 24th, 2008 in Damages, Collateral Source Rule, Medical Expenses by clintSuppose the physician and hospital want to introduce evidence that your clients health insurance carrier paid for medical expenses. You move the Court to exclude any reference to future health care benefits paid by the health insurance carrier. How do you argue it?
The General Assembly abrogated the collateral source rule in medical malpractice cases:
In a malpractice action in which liability is admitted or established, the damages awarded may include (in addition to other elements of damages authorized by law) actual economic losses suffered by the claimant by reason of the personal injury including, but not limited to cost of reasonable and necessary medical care, rehabilitation services, and custodial care, loss of services and loss of earned income, but only to the extent that such costs are not paid or payable and such losses are not replaced, or indemnified in whole or in part, by insurance provided by an employer either governmental or private, by social security benefits, service benefit programs, unemployment benefits, or any other source except the assets of the claimants or of the members of the claimant’s immediate family and insurance purchased in whole or in part, privately and individually. TENN.CODE ANN. § 29-26-119.
Culled to its essence, the statute provides Defendants a credit for services “paid or payable…by any other source.” The statute seeks to prohibit injured parties from making a double recovery by reducing a plaintiff’s recovery by the amount of benefits paid by employer-provided insurance. Nance v. Westside Hosp., 750 S.W.2d 740, 742 (Tenn.1988). It is why the collateral source rule is abrogated in medical malpractice cases.
Excluded from the statute’s general operation are collateral payments made where the collateral payor has subrogation rights. Where the injured insured must repay the insurer out of any damages recovered, the insured gets no double recovery. Hughlett v. Shelby County Health Care Corp., 940 S.W.2d 571, 574 (Tenn.Ct.App.1996). Stated another way, where a right of subrogation exists or where the tort victim has a legal obligation to repay the collateral source payor, then the victim’s losses have not been “replaced or indemnified” for purposes of TENN.CODE ANN. § 29-26-119. Richardson v. Miller, 44 S.W.3d 1, (Tenn.Ct.App.2000). The Plaintiff may prove her medical expenses when the health insurer may legitimately seek reimbursement as a matter of contract law.
The collateral source rule permits plaintiffs to prove and recover medical expenses, whether paid by insurance or not. Donnell v. Donnell, 415 S.W.2d 127, 134 (Tenn.1967). The Supreme Court has found TENN.CODE ANN. § 29-26-119 to be in derogation of the collateral source rule, and therefore, it “must be strictly construed.” Hunter v. Ura, 163 S.W.3d 686 (Tenn.2005)(quoting Steele v. Ft. Sanders Anesthesia Group, P.C., 897 S.W.2d 270, 282 (Tenn.Ct.App.1994)). The common law may not be altered any further by statute than the statute expressly declares and necessity requires. Davenport v. Chrysler Credit Corp., 818 S.W.2d 23, 28 (Tenn.App.1991). In Hunter, the Supreme Court held that the defendant in a medical malpractice case was not entitled to a $1,033,497 credit against the damages award for the amount of benefits paid by decedent’s employer because the decedent had contributed to her employer’s benefits plan. Hunter v. Ura, 163 S.W.3d at 710-711.
In your case, the client paid for their health insurance. Under the plain language of the statute, these are not losses “replaced or indemnified.” The Supreme Court does not allow a defendant credit in medical malpractice cases for payment of health expenses when the patient has contributed to the payment of health insurance. Therefore, the trial court should exclude any evidence of medical expenses paid for by health insurance, now or in the future.