Collateral Source Payments may be Admissible at Trial to Show a Treating Physician’s Bias and the Unreasonableness of the Plaintiff’s Alleged Medical Damages

Collateral Source Payments may be Admissible at Trial to Show a Treating Physician's Bias and the Unreasonableness of the Plaintiff's Alleged Medical Damages

by M. Jansen Voss, Partner

In ML Healthcare Services, LLC v. Publix Super Markets, Inc. (15-13851), the U.S. Court of Appeals for the Eleventh Circuit recently upheld a trial judge's order allowing the defendant to present evidence to the jury concerning a litigation investment company that provided post-incident medical care to a plaintiff in a slip and fall case. Applying Georgia law, the Court found evidence concerning the litigation investment company's funding of the plaintiff's medical care did not violate Georgia’s collateral source rule. The Court noted that the evidence was presented to show the litigation investment company's physicians may have been biased in favor of additional or unnecessary medical care, thereby inflating the costs of the plaintiff's medical care.

M. Jansen Voss

Under the collateral source rule, a health insurer's (or other non-party payment sources) payment for medical care for injuries a plaintiff suffered as the result of a tortfeasor's wrongful conduct are not typically admissible at trial. The logic of this rule is that admission of such evidence would unfairly reward the tortfeasor by lowering the plaintiff's medical damages simply because medical care was funded by another source. However, in ML Healthcare Services, the trial judge allowed the defendant to present evidence of the litigation investment company's payments to the plaintiff's treating physicians, stating the evidence was admitted for the purposes of attacking the physicians' credibility and the reasonableness of the plaintiff's medical bills.

The Eleventh Circuit is implicitly recognizing that behind-the-scenes financial relationships may affect medical opinions and medical treatment in personal injury cases. Typically a litigation investment company pays a discounted rate to medical providers to render post-incident medical care to plaintiffs with viable tort claims. The financial arrangement between the litigation investment company, medical providers and the plaintiff requires that the litigation investment company be paid the full amount for the medical services — not the discounted rate — from any settlement or judgment. The litigation investment firm does not recover if the plaintiff does not recover in the lawsuit.

This arrangement could incentivize medical providers who receive patient referrals from the litigation investment company to provide favorable medical testimony or provide unnecessary treatment. Favorable testimony and unnecessary treatment increases the plaintiff's potential damages and increases the litigation investment company's potential recovery.