Florida Law Update: Tort Reform

Finally, changes have come to Florida with regard to Tort Reform.  On March 24, 2023, Governor Ron DeSantis signed HB 837 into law. The bill took effect immediately and applies to causes of action filed thereafter.

Statute of Limitations

With limited exceptions, Florida Statute § 95.11 (“Limitations of Actions”) provided a four year statute of limitations for actions founded on negligence.  This section has been amended to reduce the statute of limitations for negligence actions to two years.

Negligence Standard: From Pure to Modified

Florida previously applied a “pure comparative” fault standard.  Now, any party to a negligence action that is found to be more than 50% liable for his or her own harm is barred from making a recovery for damages.

Medical Damages

In recent years, we have seen a massive increase in the way that medical damages can be manipulated and are often inflated and do not accurately reflect the actual costs.

To combat this, a new statutory provision (Florida Statute § 768.0427) was created and will require certain disclosures of information and establishes a uniform process for the calculation of medical damages in personal injury actions.

Moving forward, a party will only be able to present evidence of medical expenses in the amount actually paid for the services, not the original billed amount which is often artificially-inflated.

Past medical care with insurance

For past medical care that has been paid by insurance, evidence will be limited to the amount paid for the medical expenses, regardless of the source of payment.  The evidence to prove past medical care that has not been paid depends on whether the plaintiff has insurance, Medicare, Medicaid, or no insurance:

1. If the party has insurance other than Medicare or Medicaid, evidence is limited to the amount the insurer is required to pay the medical provider in satisfaction of the treatment.
2. If the party has insurance but opts to treat under a letter of protection, evidence is limited to the amount the insurer would have paid under the policy if the party utilized their insurance would be admissible, plus the claimant’s share of medical expenses under the insurance contract, such as copays and coinsurance.
3. If the party has no insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial. If there is no Medicare reimbursement rate that exists for the services, the admissible amount is 170% of the applicable state Medicaid rate.
4. If the party treats under a letter of protection and that bill is sold to a third party, the amount is limited to what the third party paid to purchase the bill.
5. Claimants will also be able to offer any evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.

Future medical care

Evidence relating to future medical treatment will be handled in a similar manner. In a case where the party has insurance other than Medicare or Medicaid, evidence of the amount the insurer would be required to pay to satisfy the treatment is admissible. If there is no insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial for such treatment is admissible; if there is no applicable Medicare rate for the future treatment at issue, 170% of the applicable state Medicaid rate amount is admissible.

Under the new law, an award for damages that may be recovered by a claimant in a personal injury or wrongful death action for the reasonable and necessary cost or value of medical care rendered may not exceed the sum of the following:

1. The amount actually paid by or on behalf of the injured party to the medical provider regardless of who paid;
2. The amount necessary to satisfy charges for medical services that are owed or not yet satisfied at the time of trial; and
3. The amount necessary to provide for any reasonable and necessary future medical treatment.

In other words, the amount of damages that can be awarded at trial will be limited to the actual costs of past and future medical treatment, not inflated or made up charges.

Required Disclosure of Letters of Protection, Third Party Factoring and Health Coverage

A letter of protection is a contract between a medical provider and injured party where the provider agrees to administer treatment and care on credit, with the understanding that they will be paid if and only the lawsuit is resolved. Plaintiffs will often times use letters of protection to place excessive medical bills in front of a jury, claiming the figures to be reasonable and necessary just to negotiate these figures down to 50-75% below the billed amounts once a settlement has been reached.

The new bill will now require an injured party who seeks medical treatment under a letter of protection to disclose the following for the determination of damages:

1. A copy of the letter of protection;
2. All billings for the rendered medical expenses, which must be properly itemized and use billing codes in effect for the year the services are rendered;
3. If the provider sells the accounts receivable to a third party or factoring company, the name of the third party and the dollar amount for which the third party purchased the accounts;
4. Whether the injured party had health care coverage at the time of treatment, and the identity of such coverage; and
5. Whether the injured party was referred for treatment under a letter of protection and, if so, the identity of the person who made the referral. If the referral is made by the claimant’s attorney, disclosure of the referral is permitted, and evidence of such referral is admissible.

Essentially, defendants will be allowed to tell the jury whether the plaintiff attorney referred their clients to the doctor and what if any relationship exist with the doctor or facility. This helps even the playing field where defendants had relationships with CME doctors.

Summary of the important provisions:

1. Statute of limitations for general negligence cases has been reduced from four years to two years;
2. Florida’s comparative negligence system has changed from a “pure” comparative negligence system to a “modified” one under which a plaintiff who is more than 50 percent at fault for his or her own injuries is barred from recovering any damages; and
3. Encouraging transparency regarding damage awards by eliminating “phantom” medical expenses and providing uniform standards to assist juries to more accurately calculate the value of past and future medical expenses.

Foley Mansfield has offices in Tampa and Miami. Our attorneys regularly handle general liability matters and work together on claims throughout the state of Florida. Mr. Clark runs our National Hospitality practice and Mr. Morley is the managing partner of our Tampa/St. Pete office.