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Matt Brady

Matt Brady
Public Affairs Director
Federal Affairs

Telephone: 202.580.6742

Lisa Floreancig

Lisa Floreancig
Public Affairs Director
State Affairs

Telephone: 317.876.4246

Arizona: House Committee Passes Admissibility of Collateral Source Evidence Rule, Medical Expenses Recovery: Paid Only

Two important tort reform bills passed out of House Judiciary Committee last week. HB 2547, Admissibility of Collateral Source Evidence Rule, passed on a 6-3 vote, and HB 2546, Medical Expenses Recovery: Paid, passed out on only a 5-4 vote. Unfortunately, HB 2545, Comparative Negligence, which would have converted Arizona's "Pure Comparative Negligence" system to a "Modified Comparative Negligence" system, was held by the committee and is now dead for the session.

“NAMIC has been lobbying in support of these common sense tort reform measures because they promote judicial economy, fairness, and equity for litigants, and will help prevent plaintiffs from recovering civil damages that exceed their "actual" damages,” said Christian J. Rataj, NAMIC’s Western state affairs manager.

HB 2547 would allow the defendant to introduce evidence that the plaintiff has received collateral source benefits that have reduced the plaintiff's alleged civil damages, and would allow the plaintiff to introduce evidence of the amount of money the plaintiff spent to secure or purchase the collateral source payment benefits.

“NAMIC has been actively supporting this reasonable and measured legislation because it strikes a proper balance between the legal rights and interests of both the plaintiff and defendant by allowing the defendant to introduce important damages evidence necessary to prevent the plaintiff from recovering an award of damages that unfairly exceeds the plaintiff's actual damages and allows the plaintiff the right to argue that he/she should be able to recoup the money the plaintiff spent to secure the rights to the collateral source benefit that is being asserted by the defendant as an offset to the plaintiff's damages claim,” Rataj explained.

NAMIC has been working closely with the National Association of Subrogation Professionals to address its concerns that the language of the bill could arguably adversely impact subrogation rights of collateral source payors. The industry and NASP will offer a NAMIC-proposed amendment to clarify that "contractual subrogation" is not prohibited by the bill.

HB 2546, as amended, restricts the claimant's recovery of civil damages for medical damages to the "usual and customary value of the reasonable and necessary medical expenses." “This is a very important bill because it will prevent claimants from arguing that they should recover the ‘billed’ or ‘list price’ of medical services instead of the actual ‘paid’ amount of the medical charges,” Rataj said. “HB 2545, as amended, would have prevented plaintiffs from unfairly collecting ‘phantom damages’ in medical claims, which is an unreasonable insurance rate cost-driver.”

Direct questions to NAMIC State Affairs Manager Christian J. Rataj.