Phantom Damages Addressed in New Montana Law
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Montana Gov. Greg Gianforte has signed a bill that revises civil liability laws relating to damages in lawsuits.
Specifically, the legislation deals with inflated bill amounts, which are known as phantom damages. American Trucking Associations cheered the legislative action, identifying the bill as an important piece of legislation in the ongoing effort to curb lawsuit abuse. ATA President Chris Spear has made reforming the industry’s litigation environment a priority.
“We applaud Montana’s leadership and look forward to more states following their lead,” said ATA spokesman Sean McNally. “Finding tools to increase transparency will curb inflated medical damages, which is an important part of addressing this critical issue.”
The bill notes every person who suffers detriment from “the unlawful act or omission” of another may recover from the person at fault a compensation in money, which is known as damages. The legislation outlines the measure of the damages recoverable from the person at fault for the reasonable value of medical services or treatment in legal actions arising from bodily injury or death.
“Damages must in all cases be reasonable, and where an obligation of any kind appears to create a right to unconscionable and grossly oppressive damages contrary to substantial justice, no more than reasonable damages can be recovered,” the text of the legislation states.
The bill states that, in an action arising from bodily injury or death, a plaintiff’s recovery may not exceed amounts actually:
• Paid by or on behalf of the plaintiff to health care providers that rendered “reasonable and necessary” medical services or treatment to the plaintiff.
• Necessary to satisfy charges that have been incurred and at the time of trial are still due to health care providers for reasonable and necessary medical services or treatment rendered to the plaintiff.
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• Necessary to cover any future reasonable and necessary medical services or treatment for the plaintiff.
The jury shall determine its award for the reasonable value of medical services or treatment without consideration of any charges for services that were included on health care providers’ bills but resolved by way of contractual discount, price reduction, disallowance, gift, write-off or otherwise not paid.
The bill outlines evidence that is admissible to establish the reasonable value of medical services or treatment. Specifically, the bill states this evidence is limited to evidence identifying the amounts actually:
• Paid by or on behalf of the plaintiff, regardless of the source of payment, to satisfy the financial obligation for medical services that the plaintiff received.
• Necessary to satisfy the financial obligation for medical services rendered to the plaintiff that have been incurred but not yet satisfied. This evidence may not include any reference to sums that exceed the amount for which unpaid charges could be satisfied if submitted to any health insurance covering the plaintiff or any government-sponsored health care benefit program for which the plaintiff is eligible, regardless of whether the incurred but not yet satisfied charges have been or will be submitted to the plaintiff’s health insurance or benefit program.
• Necessary to satisfy the financial obligation for reasonable future medical services rendered to the plaintiff. This evidence may not include any reference to sums that exceed the amount for which future charges could be satisfied if submitted to any health insurance covering the plaintiff or any government-sponsored health care benefit program for which the plaintiff is eligible.
If a defendant or defendant’s insurer, prior to trial, pays any part of the financial obligation for medical services provided to the plaintiff, then prior to the entry of judgment the court shall reduce the sum awarded to the plaintiff at trial by the amount of the payment or other collateral source as defined in the bill.
“This is a good bill to make sure that the appropriate amount is being compensated for damages,” Duane Williams, CEO of the Motor Carriers of Montana, told Transport Topics.
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