How would you like to be charged $1,000 for a car repair and then find out later that the market rate for that service is just $100? My guess is you would speed back to the repair shop and demand answers or a refund.
Unfortunately, a similar scenario is festering in Florida’s courtrooms when it comes to how medical service costs are calculated in injury lawsuits. The current system reflects costs based on what is called “transparency in damages.” In short, these are dollar amounts billed to patients for medical care as opposed to the actual amounts—figures that are often much lower—that were paid for treatment, usually by an insurer or government assistance.
The gap in these dollar figures can be significant, and Florida’s legal system incentivizes certain bad actors such as trial lawyers, medical financing companies, and even some medical providers to conceal the true costs of treatment for their clients in order to score huge paydays. In fact, our juries aren’t even allowed to know the amount billed. With nothing to stop them, why wouldn’t interested parties inflate that number to line their own pockets?
Well, any upstanding attorney or medical professional wouldn’t, especially if they knew the victims of this lawsuit abuse are everyday Floridians like you and me, as well as our state’s thousands of small businesses. But unlucky for us, this isn’t the world we live in. Instead, insurance premiums go up for everyone when insurers are forced to factor in the far more expensive verdicts in our state. Additionally, consumer prices increase, and jobs are lost when businesses are on the hook for claims. As things stand, Florida families are bankrolling a crony system, and most don’t even know it.
This has gotten so out of hand, that “medical financing” is now a thriving industry here in Florida. These companies offer to pay the full costs of care for victims, knowing the odds of a much higher award in court are quite good, and they will likely receive a significant return on their “investment.” Similarly, many providers work with attorneys to persuade clients to forgo health insurance and sign a “letter of protection.” In both cases, lawyers are often in league with certain financing companies or providers they know will order unnecessary tests and procedures to drive up the cost of the medical care. Unfortunately, what is rarely disclosed is that victims end up as the only ones with anything to lose. Having been swindled into forgoing insurance assistance, they are on the hook for a much higher cost of treatment should their case go the wrong way in court.
This blatant abuse is perfectly depicted in the case of a Florida plaintiff who slipped and fell in the grocery store, injuring both knees and requiring identical surgery on each. The plaintiff used health insurance for the first surgery and was billed $19,000 but only paid $3,400 out of her own pocket. The plaintiff used a letter of protection for the second procedure and was billed $59,000. Without this key information, a jury is left with no options. If the plaintiff is a victim and deserves medical compensation, they can only award the dollar figure that’s been disclosed. And while the plaintiff may “win,” the attorneys, financing companies, and providers score a windfall of $55,600 paid for by us through higher premiums and prices.
Unfortunately, more and more personal injury cases like this are being filed in Florida each day, bloating our justice system, and indirectly ripping off everyone who lives, works, and pays taxes here. To change this, it seems logical that defendants should be allowed to compare the market value of certain procedures with what is billed in Florida in order to weed out inflated costs. It also seems reasonable that jurors should be made aware of what medical services have been paid for, what those costs were, and who paid for them.
In reality, any of the above solutions would be a dramatic step forward for our state. With record inflation, rising interest rates, and a labor shortage already wreaking havoc on our economy, the last thing Florida needs is additional unnecessary economic strain. It cannot stand that our civil justice system is being manipulated by bad actors and exploited for financial gain. Florida voters must let our lawmakers know that transparency in damages reform is a top priority.
Mike McCalister is a retired U.S. Army colonel who served more than three decades, businessman, university instructor and father. He is a licensed and degreed Agri-Business professional and owner-operator of a small tree farm. He is also a university instructor in accredited MBA and DBA programs, teaching working professionals about today’s extremely competitive global economy in areas of Operations Management, Strategy & Policy, Entrepreneurship and Strategic Thinking.
This is a great article about a subject that most readers will never see but is happening to all of us once we enter the insurance and healthcare systems. In Florida we have hospitals owned by religious organizations so they operate tax free, yet one of these stalwarts had one of the largest medicare-fraud suits filed and collected by the federal government. Look at the largest buildings in most cities around the world and you will usually see the name of an insurance company on the top. I have experienced what Mr MacCallister write about firsthand several years ago when we had a house fire that put me in the hospital for months, essentially destroyed our thriving plant business, and left us with nothing but God and each other. The insurance claim adjuster and the attorney saw we were devastated financially, so they denied our claim one Friday after 5 PM so our bank called us to say we had no insurance. We moved into a tiny travel trailer and put all our resources into fighting them for 3 years. The cost was $ 600,000 out of pocket. The insurance company attorney kept asking me at depositions why we were fighting so hard. He said out of 100 claims he denied, 93 families didn’t have the money to fight. Of the 7 that did, he made their lives a living hell and 4 dropped out. The remaining 3 won 100 percent of the claim. His point was that he won 97% of the time so our claim and our lives were irrelevant. We had never had a claim in 18 years and they offered us 20 cents on the dollar. Our bank balked at this and we decided to never give up. We won treble damages from the court, 3 times the amount, and demanded and received an apology from the CEO of the insurance in person asking for forgiveness. The systems Mr. MacCallister mentions are so flawed and against truth and honesty that WE THE PEOPLE should make them accountable. Blessings to all, MannyJ