Senate Bill 1668, which would have eliminated so-called “phantom damages” to be presented to juries as a tort reform measure, failed in committee and the 2020 Florida legislative session has now ended.

“Phantom damages” is the term the litigation defense bar often uses to describe the amount of medical charges a plaintiff is billed for treatment of his or her injuries—and thus the subject of the litigation. These amounts, which are billed to a patient or insurer, are not the ultimate amount paid by the patient’s insurer, which is often lower. Because Florida law presently allows for the jury to hear only about the amount of medical charges initially billed, and does not allow the juries to hear about the actual amount paid by insurers, juries often make damages determinations based on figures that are higher. The actual amount paid for such services is only addressed by the court post-verdict. S.B. 1668’s advocates argued that allowing the billed charges to be presented to juries led to disproportionately high verdicts, as juries based future damages calculations on inflated figures. The bill would have required juries to be presented with the “usual and customary” costs of medical services in the area, as opposed to the billed rates.

The proposed law would have also impacted the use of “letters of protection,” or LOPs. LOPs are agreements between patients, their attorneys, and medical providers, which agree to pay patients’ medical expenses out of the amount recovered through settlements or jury awards. Given that S.B. 1668 limited evidence regarding claims for past, present, or future medical expenses to the amorphous “usual and customary charges in the community” term, and declined to address the limited healthcare resources available to treat patients whose only source of payment for such services would be LOPs, S.B. 1668 seemed flawed and unmanageable.

S.B. 1668 is only the latest in a series of proposed bills aimed at “phantom damages.” This year, the Banking and Insurance Committee never ultimately voted on it. However, it is likely that the litigation defense bar will forward a similar measure in the 2021 Florida legislative session.

Tache, Bronis, Christianson and Descalzo, P. A.
150 S.E. 2nd Avenue, Suite 600, Miami, FL  33131