In recent years, there has been no shortage of media coverage and discourse regarding the Patient Protection and Affordable Care Act (ACA). An emerging - and perhaps unintended - consequence of the ACA in the world of medical malpractice and personal injury litigation is its potential effect on a plaintiff’s claims for future medical damages. Before the ACA, it was a matter of routine that a plaintiff with significant injuries would submit a “Life Care Plan,” primarily based on what a patient would have to pay “out of pocket” rather than through insurance. The assumption being that it would be difficult to get insurance with a pre-existing condition. It was also well-accepted that evidence of any such insurance is precluded from being introduced in court (this is known as the collateral source rule), despite the fact that it is widely known that the plaintiff would never actually expend these huge sums for his or her future care.
The ACA now provides the potential to reverse this system on the specific issue of future medical damages and significantly reduce exposure for defendants in all types of personal injury lawsuits, including medical malpractice where plaintiffs often submit Life Care Plans with large dollar amounts. The hallmarks of the ACA are (1) that all individuals must procure insurance if they do not have it from another source (i.e. their employer) and (2) that they cannot be denied coverage on the basis of pre-existing conditions (for our purposes, prior personal injury of any type). This means that all Americans now have access to relatively affordable insurance that will cover many conditions claimed to be the result of a personal injury event or malpractice by a healthcare provider. In fact, the law requires that insurance be purchased. As such, no plaintiff should ever have to pay for treatments that are appropriately covered by available insurance, on an “out of pocket” or “cash basis” again. This dramatically undercuts many alleged future medical damages put forth by plaintiffs at trial. In some instances, the reduction on projected damages can exceed 75 percent.
A recent opinion out of the Cuyahoga County Court of Common Pleas in Ohio has highlighted such a situation where this defense would be useful as well as the trend towards its acceptance. In Alijah Jones, et al., v. MetroHealth Medical Center, et al., a jury awarded a 12-year-old minor-plaintiff and his mother $14.5 million, secondary to a birth injury with $8 million of that award for future economic damages (i.e., future medical damages), based on the plaintiff’s submitted Life Care Plan.
Following the verdict, the defendant filed a motion to have the future economic damages reduced based on collateral sources of those benefits. In opposition, the plaintiff argued that he may become ineligible for Medicare benefits based on his mother’s verdict award and thus the $8 million should not be reduced. However, the Court disagreed and stated that the plaintiff would become Medicare eligible at age 20, and that during the eight years before that time, his medical expenses would be limited to $116,000 under the ACA. This $116,000 was comprised of eight years of a statutorily defined $8,000 premium and $6,500 maximum out-of-pocket expenses. Therefore, the plaintiff’s award during that period was drastically reduced.
Shortly thereafter, another significant opinion on a pre-trial ruling came out of the Trumball County Court of Common Pleas in Ohio. In the medical malpractice matter of Christy v. Humility of Mary Health Partners, the plaintiff filed a pre-trial motion to (1) preclude the defendant from introducing past medical bills as evidence of (presumably lower) amounts previously accepted as payment by certain medical providers and (2) preclude the defendant from referencing the ACA or Medicaid.
The Court rejected both of the plaintiff’s motions and in doing so ordered that a defendant could not be prohibited from referencing the ACA or Medicaid “as it is the law of the land.” Moreover, the Court stated that it refused to prohibit the defendant from presenting his or her own future medical expense assessments, but at the same time held that it was improper that the plaintiff introduce the “full billed” future medical expenses, implying that allowing the same would be a farce based on the amounts previously accepted by those medical providers.
Significant developments are not only happening in Ohio. In Donaldson v. Advantage Health Physicians, PC, et al., a medical malpractice matter in the Circuit Court (which is Michigan’s trial court) of Kent County, Michigan, the plaintiff filed a pre-trial motion to preclude the defendants from referencing the ACA and the plaintiff’s potential coverage under the Act. While the Court did not go into a detailed explanation of its rationale, in a two-sentence Order, the Court held that because coverage under the ACA is “reasonably likely to continue into the future,” the defendants can reference medical care and therapy that would be provided by ACA provided-insurance.
Comment: These rulings were significant in several ways. First, and most obvious, the Courts in Christy and Donaldson were willing to allow specific references to the ACA during trial, potentially opening the door allowing for real-world reductions of future medical expenses to be reflected in the verdict. Moreover, the Court in Alijah Jones specifically used the ACA to reflect what would actually be paid by the plaintiff after the verdict. Also important is that each of these rulings explicitly quelled an often heard concern regarding whether the ACA will be repealed by future legislation or eviscerated by the Supreme Court.
As a firm, Weber Gallagher has become a national leader on this issue and has been retained as specialty ACA Counsel in Pennsylvania, New Jersey, New York, California, Oregon, Texas, Illinois, Ohio and Michigan. Separately, we employ this tactic in our own medical malpractice cases on a daily basis. Our medical malpractice clients are finding the issue to be vitally important and contact us frequently with questions. We encourage our clients and colleagues to take notice of industry wide opportunities to reshape how damages models are viewed by clients, carriers, mediators and judges nationwide.
For more information, please contact Noah E. Katz at nkatz@wglaw.com or 570.961.2706 or Ryan R. McBride at rmcbride@wglaw.com or 570.961.2527.