335 So.3d 957
La. Ct. App.2021Background
- On June 28, 2018 Marco Ochoa was injured in an automobile accident and received medical treatment from three providers (One Spine Institute/Dr. Liechty; Crescent View Surgery Center; Louisiana Rehab Products).
- Each provider and Ochoa executed Assignment Agreements assigning the providers’ rights (including liens and rights to recovery) to HMR Funding, LLC (HMRF); the agreements state Ochoa remains personally responsible for the full billed amount and that the providers intend to assign their rights to HMRF.
- HMRF purchased the providers’ receivables at a substantial discount (cumulative purchase <42% of billed amounts); HMRF did not sign the Assignment Agreements with Ochoa and Ochoa did not negotiate or contract directly with HMRF.
- Ochoa sued defendants for injuries; defendants moved in limine to exclude evidence of total billed medical expenses and to limit proof to amounts actually paid to providers (i.e., the discounted amounts paid by HMRF).
- The district court granted the motion and excluded billed amounts; Ochoa sought supervisory review. The Fifth Circuit (La.) granted the writ, vacated the district court judgment, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ochoa remains liable for the full billed medical amounts after providers assigned receivables to HMRF | Assignment Agreements expressly preserve Ochoa’s obligation to pay the full billed amounts; Ochoa therefore remains liable | HMRF’s purchase discharged or should limit Ochoa’s liability; providers were fully compensated by HMRF’s purchase | Held: The Assignment Agreements are unambiguous — Ochoa remains liable for the full billed amounts and providers assigned rights to HMRF |
| Whether the collateral source rule allows Ochoa to present total billed amounts (vs. discounted amounts paid to HMRF) as damages | Ochoa argues the collateral source rule applies because he remains obligated to pay the full billed amounts and received no benefit from the HMRF discount | Defendants argue the collateral source rule is inapplicable because a third party paid a discounted amount (citing Hoffman/Bozeman line of cases) and allowing billed amounts would be a windfall | Held: Collateral source rule applies here — because Ochoa gave no consideration for the HMRF discount and suffered no diminution of patrimony, he may present total billed amounts |
| Admissibility of evidence about HMRF’s discounted purchase to limit Ochoa’s recovery | Ochoa: HMRF discount is collateral-source/fact pattern and inadmissible to reduce damages | Defendants: Discount shows plaintiff will not (and need not) pay billed amounts; thus billed amounts should be excluded | Held: Defendants may not introduce the HMRF purchase/discount to argue plaintiff’s recoverable damages should be limited to the discounted amounts |
| Whether billed medical expenses should be reduced for bad faith, customary/reasonableness, or overcharging | Ochoa: No evidence of bad faith; expenses were incurred for treatment and are recoverable unless bad faith shown | Defendants: Argue overcharging/unreasonableness and point to HMRF practices and audit-type reports to show bills are excessive | Held: No evidence of bad faith or that Ochoa incurred treatment solely to inflate damages; billed expenses may not be reduced on that ground absent proof of bad faith |
Key Cases Cited
- Bozeman v. State, 879 So.2d 692 (La. 2004) (sets out collateral source rule principles and when write-offs may be recoverable)
- Hoffman v. 21st Century N. Am. Ins. Co., 209 So.3d 702 (La. 2015) (declined collateral-source recovery for attorney‑negotiated medical discounts)
- Simmons v. Cornerstone Investments, LLC, 282 So.3d 199 (La. 2019) (explains recovery limits where plaintiff has no obligation to pay discounted amounts)
- Lockett v. UV Ins. Risk Retention Grp., Inc., 180 So.3d 557 (La. App. 5 Cir.) (discusses collateral source considerations: deterrence and patrimonial diminution)
- Bellard v. American Central Ins. Co., 980 So.2d 654 (La. 2008) (framework for evaluating collateral source and double‑recovery concerns)
- Emigh v. West Calcasieu Cameron Hosp., 145 So.3d 369 (La. 2014) (addresses Balance Billing Act context and insurer‑provider contract expectations)