of Appeals Office of Appellate Courts
Wilson, Minneapolis, Minnesota; Nathan H. Bjerke, TSR Injury
Law, Bloomington, Minnesota; and John M. Skubitz, Anderson,
Skubitz & Coryell, PLLC, Le Sueur, Minnesota, for
V. Kelly, Daniel J. Bellig, Joseph A. Gangi, Farrish Johnson
Law Office, Chtd., Mankato, Minnesota, for appellants.
Jennifer E. Olson, Schwebel, Goetz & Sieben, P.A.,
Minneapolis, Minnesota, for amicus curiae Minnesota
Association for Justice.
J. Ebert, Laura A. Moehrle, Quinlivan & Hughes, P.A.,
Saint Cloud, Minnesota, for amicus curiae Minnesota Defense
Discounts negotiated by managed-care organizations under
Minnesota's Prepaid Medical Assistance Plan are
"payments made pursuant to the United States Social
Security Act" and therefore are not deducted from the
jury's damages award under the collateral-source statute,
Minnesota Statutes section 548.251, subdivision 1(2) (2018).
Legislature intended to displace the common-law
collateral-source rule for medical insurance payments and
thus the common law cannot be used to reduce the jury's
her car struck a school bus that failed to yield at an
intersection, respondent Ambree Getz brought a suit against
the bus driver, appellant Eila Peace, and the owner of the
bus, appellant Palmer Bus Service (collectively, Peace). Getz
was a medical-assistance enrollee, and her medical expenses
were covered by two managed-care organizations that
contracted with Minnesota's Prepaid Medical Assistance
Plan under Minnesota's Medicaid program. After a trial,
the jury awarded Getz damages, but the district court
deducted from the award the amount of discounts negotiated by
Getz's managed-care organizations. The court of appeals
reversed, holding that the discounts were excepted from
offset because they were "payments made pursuant to the
United States Social Security Act," under Minnesota
Statutes section 548.251, subdivision 1(2) (2018). We affirm
the court of appeals.
September 25, 2012, Getz was driving her car when she was
involved in an accident with a school bus that failed to
yield. Getz suffered extensive injuries as a result of the
accident and brought a suit against Peace.
case proceeded to trial. Peace stipulated that she was
negligent in driving the school bus, and the jury found that
Peace's negligence was a direct cause of the collision.
The jury also found that Getz was partially negligent and
that her negligence was a direct cause of the collision. The
jury attributed 80 percent of the fault to Peace and 20
percent of the fault to Getz. In its special verdict, the
jury found that Getz had incurred past medical expense
damages, among other types of damages. The jury awarded
$224, 998 for Getz's past medical expenses.
amount was what Getz's medical-care providers charged
her. But she did not have to pay that much because Getz was
enrolled in Medical Assistance, and she received benefits
through that program. Getz's medical expenses were paid
by two managed-care organizations, UCare and Medica, who were
under contract with Minnesota's Prepaid Medical
Assistance Plan. Although Getz's medical charges were
$224, 998, UCare and Medica paid far less than that to the
medical-care providers, as the result of negotiated discounts
between the medical-care providers and the managed-care
organizations. UCare paid $15, 852, and Medica paid $30, 127,
for a total of $45, 979 in past medical expenses actually
paid by the managed-care organizations.
moved for a determination of collateral sources under the
collateral-source statute, Minnesota Statutes section
548.251. Getz agreed to reductions for the no-fault insurance
benefits that she had received from her automobile insurance,
and the district court reduced the award for past medical
expenses by $20, 000 to offset those benefits. UCare and
Medica asserted subrogation claims of $15, 852 and $30, 127,
respectively. The court also reduced the damages award
by Getz's 20 percent comparative fault.
also moved under the collateral-source statute to limit
Getz's award for past medical expenses to $45, 979, the
amount that the managed-care organizations actually paid,
seeking to deduct the discounts that the organizations
negotiated with the medical-care providers from Getz's
award. Getz asserted that the collateral-source statute did
not allow deducting from the award "payments made
pursuant to the United States Social Security Act."
Minn. Stat. § 548.251, subd. 1(2). She contended that
the discounts negotiated by the managed-care organizations
were such payments, so they could not be deducted from the
past medical expenses award.
district court found that the discounts negotiated by the
managed-care organizations were subject to offset under the
collateral-source statute, and it therefore reduced the
amount of Getz's award for past medical expenses from
$224, 998 (the amount of past medical expenses actually
billed) to $45, 979 (the amount of past medical expenses that
UCare and Medica actually paid).
appealed to the court of appeals, which reversed. Getz v.
Peace, 918 N.W.2d 233, 234 (Minn.App. 2018).
Interpreting the collateral-source statute, the court of
appeals held that, because Getz was a Medicaid beneficiary
and Medical Assistance enrollee, the discounts negotiated on
her behalf by the managed-care organizations "were
obtained according to the authority granted by the Social
Security Act and therefore constitute 'payments made
pursuant to the United States Social Security Act.'"
Id. at 237 (quoting Minn. Stat. § 548.251,
subd. 1(2)). Accordingly, the court held that the payments
were excepted from offset. Id.
granted Peace's petition for review.
issue before us is whether discounts negotiated for Medicaid
beneficiaries under Minnesota's Prepaid Medical
Assistance Plan are "collateral sources" subject to
offset under Minnesota Statutes section 548.251, subdivision
1(2). "When an individual or entity other than a
tortfeasor compensates a tort plaintiff for his or her
injuries, the plaintiff has received a 'collateral-source
benefit.'" Swanson v. Brewster, 784 N.W.2d
264, 268 (Minn. 2010). Examples of "collateral-source
benefits" include payment of medical expenses by medical
insurance entities, "job benefits, donations, and
gratuitous services." Id.
common law, the collateral-source benefits received by
plaintiffs had no impact on the responsibility of tortfeasors
to pay damages: "Under the collateral source rule, a
plaintiff may recover damages from a tortfeasor, although the
plaintiff has received money or services in reparation of the
injury from a source other than the tortfeasor."
Hueper v. Goodrich, 314 N.W.2d 828, 830 (Minn.
1982). "The central justification for the common-law
collateral-source rule is that a tortfeasor, as a wrongdoer
who caused a particular harm, should not benefit from a tort
plaintiff's ability to secure other compensation."
Swanson, 784 N.W.2d at 269 n.7 (citation omitted).
This rule furthers public policy by encouraging members of
the public to secure their own sources of self-protection,
such as through buying insurance, while preserving the
deterrent effect of civil litigation against a wrongdoer.
See Hueper, 314 N.W.2d at 830 (explaining the policy
justifications for the common-law rule).
1986, the Legislature enacted a statute altering the
common-law rule to limit the recovery of damages in certain
cases in which plaintiffs had received benefits from sources
other than the tortfeasor. Act of Mar. 25, 1986, ch. 455,
§ 80, 1986 Minn. Laws 878, 878-79 (codified at Minn.
Stat. § 548.251). The primary purpose of the
collateral-source statute was to prevent some double
recoveries, including recoveries from a tortfeasor for
medical expenses that an insurer paid. See Imlay v. City
of Lake Crystal, 453 N.W.2d 326, 331 (Minn. 1990);
see also Swanson, 784 N.W.2d at 269.
For purposes of this section, "collateral sources"
means payments related to the injury or disability in
question made to the plaintiff, or on the plaintiff's
behalf up to the date of the verdict, by or pursuant to:
(1) a federal, state, or local income disability or
Workers' Compensation Act; or other public program
providing medical expenses, disability payments, or similar
(2) health, accident and sickness, or automobile accident
insurance or liability insurance that provides health
benefits or income disability coverage; except life
insurance benefits available to the plaintiff, whether
purchased by the plaintiff or provided by others,
payments made pursuant to the United States Social
Security Act, or pension payments . . . .
Minn. Stat. § 548.251, subd. 1 (emphasis added).
Specifically, Minnesota's collateral-source statute
excepts from offset "payments made pursuant to
the United States Social Security Act." Minn. Stat.
§ 548.251, ...