A recent decision from the Florida Supreme Court may increase exposure evaluations in claims involving future damages and Medicare beneficiaries. In Joerg v. State Farm Mutual Automobile Insurance Co., the Court held that defendants may not present evidence of a claimant’s entitlement to future free or low cost benefits including Medicare, Medicaid, and other social legislation in an effort to reduce future medical damages. 176 So. 3d 1247, 1257 (Fla. 2015). The lengthy opinion clarifies prior case law on collateral sources and reminds practitioners of the many pitfalls in handling cases involving Medicare beneficiaries.

Medicare is Not Free, to Anyone

Typically, Florida’s collateral source rule prevents juries from hearing evidence of a claimant’s receipt of payments from third-party payers, such as health and disability insurance. However, a narrow exception created in a 1984 Florida Supreme Court decision, created confusion among courts regarding the presentation of future benefits such as Medicare and Medicaid. In Florida Physician’s Insurance Reciprocal v. Stanley, the Florida Supreme Court held that “free or low cost services from governmental or charitable agencies available to anyone with specific disabilities is admissible.” 452 So. 2d 514, 515 (Fla. 1984).

Florida Physician’s Insurance Reciprocal v. Stanley, 452 So. 2d 514, 515 (Fla. 1984).

In Joerg, the uninsured motorist carrier, State Farm, seized upon the exception announced in Stanley, to argue that because Mr. Joerg was developmentally disabled and had never worked, his future Medicare benefits were “free” to him and thus, should not be excluded from evidence by the collateral source rule. 176 So. 3d at 1252-53. State Farm appealed after the trial court did not permit the jury to hear evidence regarding Mr. Joerg’s future entitlement to Medicare benefits relative to his claim for future damages. Id.

The Florida Supreme Court stated that the introduction of future Medicare benefits was improper because they were not truly “free” to Mr. Joerg. Id. at 1253. Specifically, Justice Lewis explained the Medicare Secondary Payer Act allows the Centers for Medicare and Medicaid Services (CMS) to seek reimbursement from any primary payers and any beneficiaries who may have received payments from a primary payer. Id. In that sense, Justice Lewis reasoned where Medicare benefits subjects beneficiaries to CMS’ enforcement tools, including demands for reimbursement, receiving Medicare constitutes a “serious liability.” Id. at 1254. Even for someone who has never paid into the Medicare system, like Mr. Joerg, Medicare is not truly “free.” Id.

The Future of Medicare is Not Guaranteed

The Florida Supreme Court also found future Medicare benefits to be too speculative to serve as a basis to reduce a plaintiff’s future medical damages. Id. at 1251. The Court echoed the reasoning of Justice Shaw in a prior opinion where he stated “’[t]here is simply no assurance that public assistance will continue, that the injured victim will continue to be eligible for such assistance if it continues, or that the assistance, if it continues, will continue at the same level.’” Id. at 1251 (quoting Stanley, 452 So. 2d at 517). Future Medicare benefits become even more speculative when a primary payer is involved – such as a tortfeasor’s insurance carrier. Id. at 1256.

Public Policy

Finally, the opinion also finds support in the resurging public policy against allowing tortfeasors to benefit from the plaintiff’s collateral sources. Id. at 1251. “’I cannot agree that an injured victim should be required to seek charity or public aid, or that the compassion of charitable contributors and taxpayers should become a device for reducing the legal liability of a tortfeasor.’” Id. (quoting Stanley, 452 So. 2d at 517). Moreover, the Court noted there was an inherent prejudicial effect to informing a jury the plaintiff is a beneficiary of government assistance. Id.

Past Medical Damages

While the Joerg case does not pertain to past medical damages, the opinion reminds us of the importance of pre-trial motions to limit the presentation of past medical damages to the amount Medicare has reimbursed. Specifically, Joerg re-affirms that Medicare is excluded from Florida’s collateral source statute, § 768.76, and because the collateral source statute does not apply to Medicare benefits, there is no basis for a post verdict set-off for amounts adjusted by medical providers upon acceptance of Medicare benefits. See Thyssenkrupp Elevator Corp. v. Lasky, 868 So. 2d 547, 548-49 (Fla. 4th DCA 2004). Instead, plaintiffs must be prevented from presenting evidence of the gross, past medical damages beyond the Medicare reimbursement amount accepted by the provider or else the defendant may be responsible for the windfall without any post verdict remedies.

Conclusion

The importance of Joerg, is that it impacts the ability to curtail a claimant’s future damages and thus, should be taken into account during initial case evaluation. However, reducing a plaintiff’s presentation of past medical damages to the Medicare reimbursement amount may facilitate an argument for reduced future medical damages proportionately.