COLLATERAL SOURCE RULE FOR WRITTEN-OFF LHWCA MEDICAL EXPENSES

By Caitlin Morgenstern of Koch & Schmidt posted in Longshore and Harbor Worker’s Compensation Act on Tuesday, December 6, 2016.

The primary issue before the U.S. Court of Appeals for the Fifth Circuit in Deperrodil v. Bozovic Marine Inc., No. 16-30009, 5th Cir., Nov. 17, 2017 was whether the collateral source rule allows plaintiff to recover the unpaid, written-off portion of his billed medical expenses, when the remaining, paid portion of the billed expenses was through workers’-compensation insurance provided by his non-tortfeasor employer, pursuant to the Longshore and Harbor Worker’s Compensation Act (“LHWCA”)

In this case the plaintiff, Robert dePerrodil, was a passenger on a vessel owned and operated by Bozovic Marine, Inc. The plaintiff was being transported from Venice, La. to an offshore platform. Unable to board the platform, the vessel returned and ran into heavy seas. The plaintiff injured his back when the vessel struck a large wave. The plaintiff received workers compensation benefits under the LHWCA and of the $186,000+ in medical expenses billed, the compensation carrier paid $57,000+ . The trial judge, applying the strict collateral source rule, awarded the plaintiff the full amount of the medical expenses billed.

On appeal, Bozovic Marine asserted that the trial court erred in applying the collateral source rule and awarding the plaintiff medical expenses as billed, rather than paid. The Fifth Circuit found that as a third party, the collateral source rule applied to the tortfeasor. The Fifth Circuit noted, however, that there was no direct authority regarding the treatment of written-off LHWCA medical expenses in the maritime-tort context. As a result, the court looked to analogous state and other maritime authority.

The most analogous maritime precedent was found in the Fifth Circuit’s decision in Manderson v. Chet Morrison Contractors, Inc., 666 F.3d 3734 (5th Cir. 2012) as it involved a similar issue in the context of maintenance and cure and that the rationale of the decision was “very persuasive because maritime cure and LHWCA insurance create similar obligations for employers.” Therefore, the LHWCA medical payments made by the compensation insurer “are collateral to the third party but only to the extent paid; in other words, under [the] circumstances, plaintiff may not recover for expenses billed, but not paid.” Thus, the Fifth Circuit found that trial court committed error in awarding the full amount of medical expenses billed. The judgment was then reduced to the amount paid, $57,000+.