A red car and one black crash in an accidentIn a galaxy far far away, tort victims sue their tortfeasors for the harms that the tortfeasors wrongfully inflicted on the victims. The cost to the victims to vindicate their rights against the wrongdoers is zero (because why would one short-pay or penalize tort victims, effectively charging them money for compensation and justice?). The validation (or invalidation) of the victims’ claims is fast, easy, cheap, and determined with complete certainty. The awards to the victims, if warranted (after the lightning fast no-cost decision-making), compensates victims 100% for their injuries, no more, no less. The tortfeasors learn their lessons and change their conduct to avoid liability (and accidents, and injuries) going forward.

On this planet, in this country, in this state, the narrative is different. In fact, our tort system is painfully inefficient and expensive (though, arguably, no one seems able to devise a better system in this galaxy, at least).

It is bad enough that the process starts with lawyers who have to be paid so that a tort victim’s “complete recovery” is discounted by maybe 30-50% off the top (or more). (Most personal injury cases are handled on a contingent fee (maybe a contingent fee of 25% to 49%of an injured person’s recovery PLUS the lawyers’ out-of-pocket costs, which come out of the victim’s share of the recovery).

Things get even more complicated and unsatisfactory when we add in the staggering complexity and inefficiencies of our healthcare system and the tort system’s interplay with health insurance (whether public (Medicaid/Medicare) or private).

This, in turn, brings us to Getz v. Peace, a car accident case headed for Minnesota Supreme Court review on the issue of insurance-negotiated discounted health-care costs and the effect on tort-victims’ claimed damages.

To put it in the rhetoric of the tortfeasors (that is, their insurance defense counsel):

Are hyperinflated medical charges, that were never collected and never expected to be collected because private health insurers providing Medical Assistance benefits negotiated steep discounts pursuant to their own profit motives, recoverable by a personal injury claimant?

Unsurprisingly, the personal injury plaintiffs’ bar sees the question from a very different angle:

Did the Court of Appeals correctly apply the collateral source statute’s exception for ‘payments made pursuant to the United States Social Security Act’ to exclude Medicaid-related provider discounts, negotiated by statutorily authorized ‘PMAP’ managed care organizations, from collateral source deduction?

In other words, the advocates for the tort-feasors (that is, insurance companies) rely on something “extra-textual,” something they might call intuitive, or something like “appealing to common sense.” The tort-victim in Getz v. Peace seeks $224,998.15 for past medical costs, which she did not pay and, in fact, which no one paid, and no one ever will pay because the insurer negotiated a sharply discounted amount for Ms. Getz’s medical bills. The insurer paid $45,979.41. Given that, how can the plaintiff claim the whole $224,998.15 “past medical bill” as part of her damages? How could that be?

The advocates for the tort victims, on the other hand, rely on a simple straight reading of a Minnesota statute which provides for exceptions to the “collateral source” rule. (The Minnesota Court of Appeals agreed with with the plaintiff’s lawyers.)

The trial court agreed with the insurance defense lawyers.

It seems to us that no outcome before the Minnesota Supreme Court is patently obvious or inevitable.

However it ends up, we’re dealing here with an injury/healthcare compensation system that is a not-so-fun-house labyrinth papered with funny-money and wall-to-wall-to-ceiling-to-floor distortion from which there is no easy or obvious escape. 

 

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