With universal health coverage fast becoming a reality under the Affordable Care Act, medical malpractice defendants are looking to challenge jury awards of future medical costs on the basis that they will be largely paid by health insurance.
A Massachusetts statute allows a medical defendant in a post-trial hearing to challenge a jury award of medical costs to the extent those costs were covered by health insurance. The statute (G.L. c. 231, § 60G) creates an exception to the common law “collateral source” rule, which prohibits juries from considering evidence of insurance payments for medical costs and other alleged damages, and from offsetting any awards by the amount of any such payments.
The Massachusetts statute, which predates passage of the ACA, refers specifically to “past” medical expenses.
In the event an award for a med-mal plaintiff includes the costs of medical care, custodial care or rehabilitation services, the statute provides that the judge will hear evidence of the amount of those damages that are replaced, compensated or indemnified by any available collateral source, such as health insurance.
The judge must reduce the award by the amount a collateral source (e.g., health insurance) paid for the medical costs, less the premium or other amounts paid by the plaintiff for such benefits in the one-year period preceding the date he or she knew or should have known of his or her cause of action.
Prior to the passage of the ACA, defendants focused on insurance payments for past medical costs. However, by mandating universal health coverage, the ACA will essentially ensure that insurance will now cover most, if not all, future medical costs of a med-mal plaintiff.
The ACA identifies “essential health benefits” that most health insurance plans must cover, including hospitalization, mental health services, prescription drugs, chronic disease management, and rehabilitative services and devices.
Private health insurers under the ACA cannot discriminate against individuals based on pre-existing conditions. This means even the most severely injured victim can purchase health insurance from a carrier at the same cost as any other person of the same age and geographic location. The ACA also mandates that all individuals must purchase adequate health insurance or face penalties.
Extending the Massachusetts collateral source statute to future medical expenses is consistent with the intent of the law and its underlying policy—namely, plaintiffs should only be awarded “out-of-pocket” economic damages, i.e., the cost of premiums for health insurance.
This argument is untested in Massachusetts to date, but it will only be a matter of time before the courts are called upon to address it.
Case law on this new line of argument remains undeveloped around the country.
One unreported case from California rejected a hospital’s argument that it should have been allowed to introduce evidence of the plaintiff’s health insurance to rebut alleged future medical expenses expected to be covered under ACA. Aidan Ming-Ho Leung v. Verdugo Hills Hospital, 2013 WL 221654 (Calif. Ct. App. 2013).
In Leung, the jury returned a medical malpractice verdict for the plaintiff that included an award for future medical expenses. The hospital argued on appeal that the ACA’s mandated coverage made future health insurance coverage for the plaintiff likely.
However, the defendant belatedly raised the ACA as a potential defense against the claim for future medical defenses, and then failed to present meaningful evidence in support of it at trial, prompting the court to exclude the amount of future insurance coverage as too speculative. According to the court, the likely prospect of health coverage under the ACA alone did not prove that specific items of future care and treatment would be covered, and it did not prove the amount and duration of coverage.
The lesson from this ruling is that a defendant must offer sufficient evidence demonstrating that ACA-mandated health coverage will specifically apply to the future medical costs in question.
Pam is administrative partner of Barton Gilman’s Boston office. She focuses her practice on defending medical professionals against professional liability claims. Ed is also a partner in the firm’s Boston office, where he focuses his practice on professional liability defense.