Rep. André Jacque and Sen. Paul Farrow have introduced legislation (Senate Bill 22/Assembly Bill 29) that will allow juries in personal injury cases to see all the evidence when determining the amount required to compensate a plaintiff for his or her past medical expenses.
Under current law, defendants are not allowed to introduce evidence of payments made to the plaintiff by third parties (collateral sources), except in medical malpractice cases, when determining the “reasonable value” of the medical expenses. As a result, plaintiffs and their attorneys are overcompensated, with the extra money being referred to as “phantom damages” by some courts.
“By passing this legislation, Wisconsin will join numerous other states that allow the jury to see all the evidence when determining how much a plaintiff should be compensated for his or her medical expenses,” said Bill G. Smith, President of the Wisconsin Civil Justice Council and State Director, National Federation of Independent Business (NFIB).
Other states recently have passed legislation more stringent than SB 22/AB 29. Those laws allow the plaintiff to receive only the amount paid by the health insurer or Medicaid. Senate Bill 22/Assembly Bill 29 does not go this far. Instead, SB 22/AB 29 simply allows the jury to see the evidence of the amount billed by the medical provider and the amount actually paid, and then allows the jury to determine how much the plaintiff should be compensated – which can still be more than the amount paid by the plaintiff’s insurer or medical assistance. Senate Bill 22/Assembly Bill 29 does nothing to take away the plaintiffs’ ability to obtain noneconomic damages, such as pain or suffering. Nor does SB 22/AB 29 affect the plaintiff’s ability to obtain punitive damages.
The California Supreme Court has also gone further than the language drafted in SB 22/AB 29. In 2011, that court held[1] that plaintiffs in California are only allowed to receive the amount paid by their health insurer to the medical provider. The California Supreme Court concluded that “the negotiated rate differential – the discount medical providers offer the insurer – is not a benefit provided to the plaintiff in compensation for his or her injuries…”
Senate Bill 22/Assembly Bill 29 addresses a number of Wisconsin Supreme Court decisions preventing all of the evidence to be offered at trial. For example, in Leitinger v. DBart[2] the court held that the plaintiff was entitled to receive the full amount billed by the medical provider, $154,819, even though the plaintiff’s health insurer paid only $111,395. This led to $43,424 in overcompensation to the plaintiff and his attorney.
“Most Wisconsinites understand that a person should only be awarded the actual costs of the medical expenses associated with their injuries,” added Smith. “Businesses and individuals all benefit when plaintiffs and their attorneys are not overcompensated for medical expenses they never incurred,”
said Smith.
[1] Howell v. Hamilton Meats and Provisions, Inc., 52. Cal. App. 4th 541, 257 P.3d 1130, Ca. Rptr. 3d 325 (Cal. 2011).
[2] 2007 WI 84