Collateral Source Rules

One of the major new laws affecting trial attorneys to come out of the 1993 Legislative Session was a significant amendment to the collateral source rules. The changes, which apply to all actions accruing after October 1, 1993, greatly standardized collateral source limitations in Florida by eliminating the Automobile Collateral Source Act and providing for the uniform application of the general collateral source rule found at Fla.Stat. § 768.76. A similar amendment has been made to the Health Maintenance Organization Act. Section 641.31 has been amended to repeal an HMO’s absolute right of reimbursement without consideration of fees or costs. Instead, an HMO will be now treated like all other collateral sources under § 768.76. Thus, there is no set off for collateral sources for HMO benefits since there will exist a right of subrogation. In addition, providers will be required to assert their collateral source claims within 30 days of the date the plaintiff notifies them of a potential right of recovery. Upon notification, the benefit provider must formally advise the plaintiff of the basis of that provider’s subrogation rights, and the amount of reimbursement that is sought. If the provider fails to comply with this section, the claim is waived. When determining the amount that the collateral source claimant may be entitled to receive from a particular settlement amount, the determination will be made using the principles of equitable distribution. This will maximize the recovering parties likelihood of achieving a just result. Remember that the collateral source statute only applies to past benefits provided. There is no right of subrogation for future collateral sources to be provided.Florida Physician’s Ins. Reciprocal v. Stanley, 452 So.2d 514 (Fla. 1984). The new law specifically states that the health care provider or collateral source provider will have no right of subrogation or reimbursement for collateral sources paid after the date of the settlement or judgment. The new law also specifies that the right of reimbursement shall be limited to the actual amount of collateral sources recovered by the plaintiff from the tortfeasor, minus the plaintiff’s pro-rata share of costs and attorney’s fees. The plaintiff is required to send the collateral sources a copy of the complaint by certified or registered mail as official notice of the lawsuit. The collateral sources must then assert their notice of payment and right of subrogation reimbursement within 30 days or waive any potential claim. Section 768.76, commonly known as the Collateral Source Act, requires that the court reduce the amount of damages awarded in negligence cases by the amounts which have been paid to the plaintiff by insurers or other collateral sources. The statute specifically excludes from the set-off any collateral sources that have the right of subrogation or the right of reimbursement. Included in that scenario are Medicare, or any other federal program providing for a federal government lien or right of reimbursement from the plaintiff’s recovery. Worker compensation benefits shall not be considered a collateral source of indemnity. The changes to the collateral source law are significant and important. The amended collateral source law attempted to correct many inequities encountered before its passage. The amended collateral source law should be read, understood, and referred to anytime a collateral source issue arises in a case that accrues after October 1, 1993