Governor Ron DeSantis signed HB 837 into law this morning after the Florida Legislature passed sweeping tort reform intended to bring long-overdue balance and transparency to tort litigation.

In a 23 to 15 vote on March 23, 2023, HB 837 passed in the Florida Senate. The bill took effect upon Governor DeSantis’ signature.  The provisions of the bill shortening the statute of limitations for negligence claims will apply to causes of action which accrue after the effective date.  All of the other provisions of the bill will apply to lawsuits filed after the effective date.

HB 837 includes the following provisions:

1. Reducing the statute of limitations for general negligence cases from four years to two years;
2. Changing Florida’s comparative negligence system from a “pure” comparative negligence system to a “modified” one under which a plaintiff who is more than 50 percent at fault for his or her own injuries is barred from recovering any damages; and
3. Encouraging transparency regarding damage awards in an effort to eliminate “phantom” medical expenses by permitting additional evidence which can be admitted to assist juries to more accurately calculate the value of past and future medical expenses.

The impact HB 837 will have in tort litigation in the Florida cannot be overstated. Below is a brief summary of the bill and the changes the bill brings, to the statute of limitations for negligence claims, comparative fault, and medical damages.

Statute of Limitations

With limited exceptions, Florida Statute § 95.11 (“Limitations of Actions”) provided a four year statute of limitations for actions founded on negligence.

HB 837 amends Section 95.11 to reduce the statute of limitations for negligence actions to two years. In doing so, Florida will join 44 other states which have negligence statutes of limitations of less than four years.

Negligence Standard: From Pure to Modified

Florida previously applied a “pure comparative” fault standard.  Under the current standard, the jury apportions fault among the responsible parties and the plaintiffs’ damages are proportionally reduced based upon their percentage of liability. 

In an effort to limit recovery by plaintiffs who are the majority at fault for causing their own injuries, under HB 837, any party to a negligence action that is found to be more than 50% liable for his or own harm is barred from making a recovery for damages. In adopting this provision, Florida will join 34 other states who have a modified comparative negligence standard.

Medical Damages

In recognition that medical damages are often inflated and do not accurately reflect the actual costs, HB 837 provides significant changes.

HB 837 creates a new statutory provision (Florida Statute § 768.0427) which will require certain disclosures of information and allows for introduction of evidence regarding insurance, Medicare, or Medicaid rates for services and treatment provided which the jury can take into consideration in its calculation of medical damages in personal injury actions.

Moving forward, for past medical expenses that have been paid, a party will only be able to present evidence of medical expenses in the amount actually paid for the services, not the original billed amount which is often artificially-inflated. 

Required Disclosure of Letters of Protection, Third Party Factoring and Health Coverage

One of the more popular ways to inflate medical billing is the use of letters of protection. A letter of protection is a contract between a medical provider and injured party where the provider agrees to administer treatment and care on credit, with the understanding that they will be paid if and only the lawsuit is resolved. Plaintiffs will often times use letters of protection to place excessive medical bills in front of a jury, claiming the figures to be reasonable and necessary just to negotiate these figures down to 50-75% below the billed amounts once a settlement has been reached. Under current Florida law, courts are not permitted to reduce awards for bills not yet paid, allowing letters of protection to “prop-up” unrealistic medical charges.

In an effort to improve transparency in medical damages, HB 837 will now require an injured party who seeks medical treatment under a letter of protection to disclose the following for the determination of damages:

1. A copy of the letter of protection;
2. All billings for the rendered medical expenses, which must be properly itemized and use billing codes in effect for the year the services are rendered;
3. If the provider sells the accounts receivable to a third party or factoring company, the name of the third party and the dollar amount for which the third party purchased the accounts;
4. Whether the injured party had health care coverage at the time of treatment, and the identity of such coverage; and
5. Whether the injured party was referred for treatment under a letter of protection and, if so, the identity of the person who made the referral. If the referral is made by the claimant’s attorney, disclosure of the referral is permitted, and evidence of such referral is admissible.

Evidence and Calculation of Unpaid Past and Future Medical Damages

HB 837 will also expand the scope of evidence that is admissible to prove the amount of unpaid damages for both unpaid past and future medical treatment.

Past Unpaid Medical Care

The evidence admissible to prove past medical care that has not been paid depends on whether the plaintiff has insurance, Medicare, Medicaid, or no insurance:

1. If the party has insurance other than Medicare or Medicaid, evidence of the amount the insurer is required to pay the medical provider in satisfaction of the treatment is admissible.
2. If the party has insurance but opts to treat under a letter of protection, evidence of the amount the insurer would have paid under the policy if the party utilized their insurance would be admissible, plus the claimant’s share of medical expenses under the insurance contract, such as copays and coinsurance is admissible.
3. If the party has no insurance or is covered by Medicare or Medicaid, evidence of 120% of the Medicare reimbursement rate at the time of trial is admissible. If there is no Medicare reimbursement rate that exists for the services, the admissible amount is 170% the applicable state Medicaid rate.
4. If the party treats under a letter of protection and that bill is sold to a third party, evidence of the amount the third party paid to purchase the bill is admissible.
5. Claimants will also be able to offer any evidence of reasonable amounts billed to the claimant for medically necessary treatment or services.

Future Medical Care

Evidence relating to future medical treatment will be handled in a similar fashion. In a case where the party has insurance other than Medicare or Medicaid, evidence of the amount the insurer would be required to pay the medical provider in satisfaction of the treatment is admissible. If the party is without insurance, evidence is limited to 120% of the Medicare reimbursement rate at the time of trial for such treatment is admissible; if there is no applicable Medicare rate for the future treatment at issue, 170% of the applicable state Medicaid rate amount is admissible. Claimants will also be able to offer evidence of reasonable future amounts to be billed to the claimant for medically necessary treatment or services.

Under the new law, an award for damages that may be recovered by a claimant in a personal injury or wrongful death action for the reasonable and necessary cost or value of medical care rendered may not exceed the sum of the following:

1. The amount actually paid by or on behalf of the injured party to the medical provider regardless of who paid;
2. The amount necessary to satisfy charges for medical services that are owed or not yet satisfied at the time of trial; and
3. The amount necessary to provide for any reasonable and necessary future medical treatment.

In other words, the amount of damages that can be awarded at trial will be more closely related to the actual costs of past and future medical treatment, not inflated, illusory charges.