Future Medicare Benefits Can Not Be Used As Collateral Source


Trial courts must reduce jury awards by the total of all amounts which had been paid for the benefit of the claimant, or which are otherwise available to the claimant, from all collateral sources. This statute was designed to reduce insurance costs and prevent plaintiffs from receiving windfalls.


However, insurance carriers and their lawyers tried to argue that this statute means that benefits from government sources should be deducted from such awards. State Farm’s lawyers tried to argue that this statute means that benefits from government sources should be deducted from such awards. In fact, benefits received under Medicare, or any other federal program providing for a federal government lien on or right of reimbursement from the plaintiff’s recovery, the workers compensation law, the Medicaid program of title XIX of the Social Security Act or from any medical services program administered by the Department of Health shall not be considered a collateral source. (Florida statute 768.76(2)(b))

However, it is also well-established in Florida that the admission of evidence of social legislation benefits such as those received from Medicare, Medicaid, or Social Security can be considered highly prejudicial and constitutes reversible error. Therefore, in most cases, the collateral source set off occurs post-verdict. The big question that has never been answered was whether future Medicare benefits should be used to set off a verdict.

The underlying facts in this case are similar to the “perfect storm.” The plaintiff was a developmentally disabled adult who had lived with his parents his entire life and has never worked. As a result of his disabilities, he is entitled to reimbursement from Medicare for his medical bills. He was riding a bicycle and was struck by a car. State Farm was his uninsured/underinsured carrier. A jury subsequently awarded almost $1,500,000 in damages, including almost $470,000 in future medical expenses. State Farm sought a reduction of this award by future Medicare benefits. Since the Medicare benefits were free and unearned, the 2nd district Court of Appeals determined they should not have been excluded by the collateral source rule and reversed the award for future damages.

The Supreme Court of Florida said not so fast and reinstated the award. The opinion analyzes the history of federal legislation regarding such benefits including the creation of the Centers for Medicare and Medicaid Services (CMS) which allow for independent causes of action against any and all entities that are or were required to make payment under a primary plan. Double damages can be obtained against entities that fail to follow these federal laws.

The opinion goes on to state that it would be absolutely speculative to attempt to calculate damage awards based on benefits that a plaintiff has not yet received and may never receive, should either the plaintiff’s eligibility or the benefits themselves become insufficient or cease to continue. The continued existence and sufficient funding of public services is dependent upon legislative action, which is by no means a predictable matter. State Farm’s argument was tantamount to dumping responsibility for these damages on the taxpayer. The opinion goes on to conclude that the trial court properly excluded evidence of the injured plaintiff’s future benefits as collateral sources. From this opinion, we now have a distinct answer to the question of whether future Medicare benefits are a collateral source. They are not.

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