July 21, 2019

Colorado Court of Appeals: Medicare Benefits Fall Within Contract Exception to Collateral Source Rule

The Colorado Court of Appeals issued its opinion in Forfar v. Wal-Mart Stores, Inc. on Thursday, August 23, 2018.

Insurance—Collateral Source Rule—Medicare Benefits—Premises Liability.

Forfar, a Medicare beneficiary, slipped and fell at a Wal-Mart store. He filed a premises liability case. Before trial, Wal-Mart moved to exclude evidence of Forfar’s medical expenses owed under agreements he had with his medical providers. Forfar moved in limine to exclude evidence that he had received Medicare benefits. The trial court ruled that Wal-Mart could not present evidence to the jury as to the amount of the Medicare limits and that Forfar could not present evidence of private contracts between himself and any third-party medical providers. Forfar was allowed to present evidence of the reasonable value of medical services, for which he sought $72,636. After trial, Wal-Mart moved to reduce the damages under C.R.S. § 13-21-111.6, arguing that the economic damages awarded for medical expenses should be reduced to Medicare accepted rates. The trial court denied the motion, holding that Medicare benefits fall within the contract exception to the collateral source rule in C.R.S. § 13-21-111.6. The judgment entered on a jury verdict included $44,000 in economic damages for the reasonable value of medical services that Forfar had received.

On appeal, Wal-Mart contended that the trial court should have reduced the damages, arguing that the amounts paid by Medicare are dispositive of the necessary and reasonable value of medical services provided to Forfar. Pre-verdict, the collateral source rule, C.R.S. § 10-1-135(10)(a), bars evidence of collateral source benefits, and the correct measure of damages is the reasonable value of medical services. A benefit is not excluded from the definition of a collateral source simply because it comes from a government program. The trial court properly held Medicare benefits to be a collateral source inadmissible as evidence based on C.R.S. § 10-1-135(10)(a).

Wal-Mart also challenged the trial court’s holding that Medicare benefits fall within the contract exception to the collateral source rule. Post-verdict, the trial court is required to reduce a plaintiff’s verdict by the amount the plaintiff “has been or will be wholly or partially indemnified or compensated for his loss by any other person, corporation, insurance company or fund.” The exception to this prohibits trial courts from reducing a plaintiff’s verdict by the amount of indemnification or compensation that the plaintiff has received from “a benefit paid as a result of a contract entered into and paid for by or on behalf of the plaintiff.” Medicare benefits fall within the contract exception to the collateral source rule of C.R.S. § 13-21-111.6. The trial court properly applied the contract exception to Medicare benefits.

Wal-Mart further contended that the trial court violated the Supremacy Clause by failing to apply the Medicaid statutes and regulations over the collateral source rule, asserting that no person may be liable for payment of amounts billed in excess of Medicare approved charges. The Medicare statutes Wal-Mart relies on do not preempt Colorado law holding it liable for the reasonable value of Forfar’s medical services.

The court of appeals declined to award Forfar attorney fees because the issues presented by Wal-Mart were novel and supported by some out-of-state authority.

The judgment was affirmed.

Summary provided courtesy of Colorado Lawyer.

Colorado Court of Appeals: Plaintiff in Personal Injury Action Has No Affirmative Duty to Mitigate Medical Expenses when Pain is Unresolved

The Colorado Court of Appeals issued its opinion in Banning v. Prester on Thursday, December 27, 2012.

Automobile Accident—Injuries—Jury Instructions—Mitigation of Damages—Collateral Source Rule—Testimony.

In this automobile accident case, plaintiff Michelle Banning appealed the judgment awarding her damages following a jury verdict against defendant William Prester. The judgments were reversed and the case was remanded for a new trial.

Prester negligently drove his vehicle, causing a low-speed rear-end collision with Banning’s vehicle. Banning sought medical attention for neck and back pain. Her billed medical expenses eventually reached approximately $140,000.

On appeal, Banning asserted that the trial court erred in instructing the jury concerning Prester’s mitigation of damages defense by allowing the jury to find she failed to mitigate if she “continued to undergo expensive treatment when it was not resolving her pain.” Plaintiffs do not have an affirmative duty to cease medical treatment when it is “expensive” and “fails to resolve a complaint of pain.” Therefore, the court erred in so instructing the jury, and the erroneous instruction was prejudicial to Banning. Accordingly, the case was remanded for a new trial on damages.

Banning also contended that the trial court erred in admitting evidence of amounts her health insurer paid to her medical providers. On remand, the trial court should apply the collateral source rule to this evidence.

Banning further asserted that the trial court erred when it allowed Dr. Lambden, Prester’s expert witness, to provide testimony about the “delta forces” involved in the accident, as well as testimony concerning Banning’s history of being subjected to domestic abuse. Contrary to Banning’s assertion, however, Dr. Lambden did not mention delta forces again after Banning’s objection to this testimony was sustained by the court. Further, the reference to Banning’s history of domestic abuse was relevant to Banning’s claim of depression after the accident and Prester’s assertion that Banning suffered from delayed recovery syndrome. Therefore, the court did not err in this regard.

Summary and full case available here.