LMTA Seeks To Put An End To Phantom Medical Expenses
NEW ORLEANS — LMTA's HB 789 by Rep. Major Thibaut (D-New Roads) is scheduled for 9:00 a.m. Monday April 16 in the House Civil Law Committee.
This bill was brought on behalf of LMTA to put an end to phantom medical expenses, a key factor as to why so few insurance providers will do business in Louisiana. As an example, a medical procedure may be billed to an injured party and/or their insurer for $200,000 with $100,000 in "write-offs or write-downs." The plaintiff and his private or public insurer are only responsible for paying $100,000. Yet, the plaintiff can sue and will recover the $200,000 from the defendant. Louisiana auto accidents are nearly twice as likely to have "injuries" than the national average - that means our industry is paying twice as many phantom damages.
Here are some key facts:
- The courts currently allow plaintiffs to recover medical expenses that were never actually paid by anyone. In the trucking industry, this is called "phantom damages" because they aren't real.
- As an example, a medical procedure may be billed to an injured party and/or their insurer for $200,000 with $100,000 in "write-offs or write-downs." The plaintiff and his private or public insurer are only responsible for paying $100,000. Yet, the plaintiff can sue and will recover the $200,000 from the defendant.
- The number of auto accidents in Louisiana is slightly higher than the national average, but the number of accidents with "injuries" in Louisiana is about twice the national average. That means twice as many phantom damages facing the trucking industry.
- Knowing that we face phantom medical expenses, particularly in the common cases where it’s "his word versus mine" on fault, trucking companies can't risk going to trial. Our insurers will settle almost every time. This drives up insurance costs tremendously.
- Some trucking companies are starting to install cameras on trucks to help defend themselves, but this is very costly and as long as plaintiffs are entitled to phantom damages, frivolous lawsuits will keep coming and Louisiana will have higher than average accidents with "injuries."
- This bill simply ensures that plaintiffs are able to recover their actual medical expenses. It does nothing to the many other recoverable items such as wages, earning capacity, etc.
- The argument against this bill is that defendants shouldn't enjoy the benefit of reduced medical expenses that an insured plaintiff gets. This is a flawed argument because everyone must be insured and the "write-offs or write-downs" are pre-established business arrangements between the insurer and the health care provider. Opponents of this bill are only seeking to maintain the "phantom damages" windfall.
- Opponents will also say that they need more than the actual medical cost to help cover attorney fees. This isn't true because the courts make a plaintiff whole before they make an insurer whole. If there isn't enough money, the insurance company ends up taking the hit not the plaintiff.
- Lawyers can argue over technicalities all day on this issue, and that's the problem. It's very simple - defendants should pay for the actual cost of medical expenses.