A major legislative package, House Bill 837 (companion to Senate Bill 236) expected to be signed into law by Florida Governor Ron DeSantis this week, would consummate tort reform in Florida. The package introduces significant changes to how lawsuits are filed and litigated in Florida, and seeks to bring balance and transparency to tort litigation. If signed into law, the bill provides an effective date of July 1, 2023, and will be applied prospectively.

Altogether, HB 837 makes multiple substantive changes to Florida’s civil justice system. For purposes of this article, we focus solely on how the bill provides for transparency in damages by providing uniform standards to aid juries in calculating the accurate value of medical damages in personal injury or wrongful death actions.

Restrictions on the Admissibility of Past and Future Medical Bills as Evidence at Trial

HB 837’s language notably modifies the collateral source rule to limit the introduction of evidence for medical damages at trial. If the bill is signed into law, evidence offered to prove the amount of damages for past or future medical treatment at trial generally will be limited to evidence of the amount actually paid.

Past Medical Care
First, the proposed bill limits evidence of past paid medical bills to the amount actually paid for the services regardless of the source of the payment. Therefore, if a full medical bill for past services has been paid by an insurer, the actual amount paid by the insurer is the only amount admissible at trial. The initial billed amount presented by the provider may not be presented as evidence.

Second, the bill hinges on the admissibility of evidence to prove the amount of past unpaid medical bills on the type of health care coverage provided to a plaintiff.

• If a plaintiff has health care coverage, evidence of the amount the coverage is obligated to reimburse the health care provider for satisfaction of the medical services rendered under an insurance contract or regulation (including a plaintiff’s share of medical expenses) is admissible at trial.

• If a plaintiff has health care coverage but chooses instead to fund medical care through use of a letter of protection (defined in the bill as “any arrangement by which a health care provider renders treatment in exchange for a promise of payment for the claimant's medical expenses from any judgment or settlement of a personal injury or wrongful death action), then only evidence of the amount the coverage would reimburse under an insurance contract or regulation (including plaintiff’s share of expenses) had the plaintiff obtained treatment pursuant to his/her health care coverage is admissible at trial.

• If a plaintiff does not have health care coverage, then evidence of 120 percent of the Medicare reimbursement rate in effect on the date of the claimant's incurred medical treatment or services, or, if there is no applicable Medicare rate for a service, 170 percent of the applicable state Medicaid rate.

• Finally, if a plaintiff receives services pursuant to a letter of protection and the medical bill is subsequently assigned to a third party, then only evidence of the amount the third party agreed to pay the provider for the right to receive payment is admissible.

Future Medical Bills
The proposed bill also provides guidance on the admissibility of evidence relating to damages for future medical care.

• If a plaintiff has health care coverage or is eligible for health care coverage, only evidence of the amount for which the future charges could be satisfied if submitted to such health care coverage (including a plaintiffs’ portion of medical expenses) is admissible at trial.

• Whereas, if a plaintiff does not have health care coverage or has health care coverage through Medicare or Medicaid, or is eligible for such health care coverage, evidence of 120 percent of the Medicare reimbursement rate in effect at the time of trial for the medical treatment or services the claimant will receive, or, if there is no applicable Medicare rate for a service, 170 percent of the applicable state Medicaid rate, is admissible.

Amount of Damages Recoverable at Trial

The proposed bill prohibits damages from including any inflated amounts above the amount actually paid for the services provided to a plaintiff by a health care provider. Moreover, the bill forbids an award of damages from exceeding the amount:

• Actually paid by or on behalf of the claimant to the health care provider who rendered medical treatment or services

• Necessary to satisfy charges for unpaid medical services at the time of trial

• Required to provide for any reasonable and necessary future medical treatment.

Letters of Protection Disclosure

The proposed bill provides for a mandated procedure in relation to the use of a letter of protection. If a plaintiff receives care pursuant to a letter of protection, the bill mandates that the plaintiff disclose:

• A copy of the letter of protection

• All billing for a plaintiff’s medical expenses, which must be itemized and appropriately coded

• Whether the health care provider sold the accounts receivable to a third party, the name of the third party, and the dollar amount paid by the third party to purchase the accounts

• Whether the plaintiff had health insurance at the time of treatment and the identity of the health care coverage provider

• Whether the claimant was referred for treatment under a letter of protection and, if so, the identity of the person who made the referral.

To this end, the bill amends section 90.502(4), Florida Statutes, to declare that there exists no lawyer-client privilege in communications related to an attorney’s referral of a client for treatment. Notably, this provision would overturn the Florida Supreme Court’s 4–3 decision in Worley v. Central Florida YMCA, which found that “the defense could not seek discovery information about the relationship between plaintiff attorneys and medical providers to whom they referred clients, finding that was protected by attorney-client privilege.”

Looking Ahead

If HB 837 is signed into law, the amount of damages that may be awarded to a plaintiff at trial will be limited to the actual costs of medical treatment as opposed to inflated or arbitrary charges. This bill, in turn, may lower tort costs by reducing a plaintiff’s recovery in certain cases and is expected to have a positive fiscal impact on private entities and state and local governments. As a downstream effect, the bill may serve to indirectly lower the cost for insurance products and medical services in Florida.

 HB837 also will allow defendants to tell the jury whether the plaintiff’s attorneys referred their clients to a certain doctor and what that doctor’s relationship is with a plaintiff’s attorney. The bill is clearly designed to reverse past case law that kept the plaintiff’s attorney’s dealings with certain medical providers safe from discovery and hidden from the jury. This shift levels the playing field for defendants whose relationship with compulsory medical exam (CME) physicians is subject to discovery by plaintiff’s attorneys and disclosure to the jury.”