In a number of recent cases we’ve defended where the cost of future medical care was an item of claimed damages by the plaintiff, there were proposals by some enterprising defendants to argue at trial that the costs of future care (such as plaintiffs’ very expensive Life Care Plans) could be reduced by the terms of the federal Affordable Care Act, the effect of which could dramatically lower that typically-high item of special damages. Because (at least generally speaking) (1) the application of the ACA is federally mandated, (2) the ACA carries a wide array of mandated benefits, and (3) its costs to a user are both relatively predictable, and lower than the charged expenses for medical and ongoing care, the thinking was that the expense of the ACA benefits to the plaintiff could be shown to be far lower than the anticipated expense the medical provider or Life Care Planner would describe. Such an approach was attempted at trial by defendants in the Philadelphia County Court of Common Pleas case of Deeds v. University of Pennsylvania, 110 A.3d 1009 (Pa.Super. 2015), a medical malpractice action alleging a failure to diagnose that culminated in severe birth defects of the minor plaintiff. At trial, the court permitted the defendant to “inform the jury that [the minor plaintiff’s] substantial medical needs were all being attended to at little to no cost to [the] legal guardian due to the existence of state and federal education and medical benefits programs,” in the form of Medicaid and the ACA.
On appeal, however, the Superior Court found these references at trial to be “a patent violation of the collateral source rule,” 110 A.3d at 1013. “Collateral sources” are benefits arrangements a plaintiff may have, such as health insurance benefits, wage payments from accrued vacation allowance or disability (or workers comp) plans, or pension benefits, that serve to lower the claimant’s own out-of-pocket losses. The Collateral Source Rule provides that payments from a collateral source cannot be relied on by the defendant to diminish the damages otherwise recoverable from the wrongdoer. The rule is “intended to prevent a wrongdoer from taking advantage of the fortuitous existence of a collateral remedy.” Beechwoods Flying Service, Inc. v. Al Hamilton Contracting Corp., 504 Pa. 618, 476 A.2d 350, 353 (1984). Longstanding defense objections, that the absolute application of the Collateral Source Rule represented a windfall to plaintiffs, have received little sympathy in Pennsylvania courts; the ACA argument, it was hoped, may have served to dent the effect of the Rule, but Deeds represented the first failure of that effort.
Notably, subsequent decisional law addressing Deeds has uniformly followed it. In November 2015, the Western District of Pennsylvania in Cordes v United States, 2015 WL 10986360 (W.D.Pa. Nov 20, 2015), followed Deeds and barred a defendant from arguing that the ACA limited the future medical expenses of the plaintiff. In the summer of 2016, in the Pennsylvania Superior Court case of Scott v. Lower Bucks Hosp., 2016 WL 5210668 (Pa. Super. Jul. 21, 2016) and a few weeks later in the Middle District of Pennsylvania’s Bernheisel v. Mikaya, 2016 WL 4211897 (M.D. Pa. Aug. 9, 2016), the courts both found that “the collateral source rule precludes counsel from pursuing certain inquiries, including raising an individual’s access to Medicare, Medicaid, and benefits under the Affordable Care Act.” Bernheisel, 2016 WL 4211897 at *4; see also, Scott, 2016 WL 5210668 at *16 (“A new trial is necessary where evidence of collateral sources of payment may have improperly influenced the jury’s verdict”, citing Deeds). Most recently, Judge Nealon of Lackawanna County, also relying on Deeds, barred defense cross examination of plaintiff’s economic experts that sought to limit damages on the basis of the Affordable Care Act. Vaccaro v. Scranton Quincy Hospital Company, LLC, No. 2014-CV-7675 (C.P. Lacka. Co. Oct. 24, 2016 Nealon, J.),
One distinguishing feature of these cases is that they all were medical malpractice actions that are statutorily governed by the Medical Care Availability and Reduction of Error Fund (“MCARE”) which statute in certain respects (subject to some exceptions) abrogated the Collateral Source Rule. See, 40 P.S. § 1303.508 (2016). The fact that the foregoing cases still invoked the Collateral Source Rule meant that, not only are MCARE’s exceptions carefully constrained, but the Collateral Source Rule will still enjoy unfettered application in all other tort claims (i.e., those that do not sound just in medical malpractice).
In sum, defendants don’t stand a good chance at relying on the Affordable Care Act as a basis to roll back application of the Collateral Source Rule in Pennsylvania courts.
Please contact Tom Tyler of the firm Davis Parry & Tyler, P.C., should you have any comments or questions regarding these developments.