“Phantom Damages” is a term used to describe the gross amount of medical charges a plaintiff is billed for treatment of his or her injuries versus the actual reduced amount which is charged and paid by a plaintiff’s insurance company. Plaintiffs will typically seek to recover the gross amounts of past medical bills at trial while defendants will object to the plaintiff’s introduction of the gross amount billed by medical providers instead of the discounted amount paid in full satisfaction of plaintiff’s expenses.
Phantom Damages are often a source of confusion; however, the Fourth District Court of Appeal in Gulfstream Park Racing Association, Inc. v. Volin, recently clarified some of that confusion concerning past medical bills and payments made by Medicare.
In Gulfstream, the plaintiff sought to recover the gross amount of her past medical bills, totaling $101,402.55. The defendant filed a motion to preclude the plaintiff from introducing the gross amount of her medical bills to the jury instead of the discounted amount that Medicare paid in full satisfaction of her medical expenses. The trial court denied the defendant’s motion and allowed the amounts that the medical provider billed to the plaintiff – that the plaintiff will never pay – to be submitted to the jury and, thereafter, set off the difference between the amount of the bill and amount Medicare paid. The Fourth District Court of Appeal reversed the trial court, holding that the setoff statute does not authorize a court to setoff payments from Medicare. Rather, the Fourth District Court of Appeal held that the amounts the medical provider billed the plaintiff were inadmissible in the first place because the amount the medical provider bills is not an actual damage if the debt is settled for a lesser amount by a source such as Medicare.
Florida law is now clear: Medicare benefits are not set off from a verdict; rather, the provider billed gross amount is inadmissible as evidence when Medicare satisfies the plaintiff’s past medical expenses for a lesser amount. In those instances, only the discounted amount Medicare paid in full satisfaction of medical expenses is admissible as evidence of the plaintiff’s damages.