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Getz v. Peace

Supreme Court of Minnesota

October 16, 2019

Ambree Getz, Respondent,
v.
Eila Kaarina Peace, et al., Appellants.

          Court of Appeals Office of Appellate Courts

          Scott Wilson, Minneapolis, Minnesota; Nathan H. Bjerke, TSR Injury Law, Bloomington, Minnesota; and John M. Skubitz, Anderson, Skubitz & Coryell, PLLC, Le Sueur, Minnesota, for respondent.

          Scott 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.

          Dyan J. Ebert, Laura A. Moehrle, Quinlivan & Hughes, P.A., Saint Cloud, Minnesota, for amicus curiae Minnesota Defense Lawyers Association.

         SYLLABUS

         1. 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).

         2. The 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 damages award.

         Affirmed.

          OPINION

          CHUTICH, JUSTICE.

         After 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.

         FACTS

         On 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.

         The 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.[1] The jury awarded $224, 998 for Getz's past medical expenses.

         That 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.

         Peace 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.[2] The court also reduced the damages award by Getz's 20 percent comparative fault.

         Peace 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.

         The 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).

         Getz 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.

         We granted Peace's petition for review.

         ANALYSIS

         The 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.

         At 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).

         In 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 benefits;
(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. ยง 548.251, ...


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