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Limiting Phantom Damages – Co-Sponsorship of LRB-0986

LRB-0986 would limit “phantom damages” awarded to plaintiffs and their attorneys in personal injury cases by allowing the jury to see all the evidence of past medical expenses paid by the plaintiff.

LRB-0986 is specifically designed to address several negative decisions by the state Supreme Court.  In these decisions, the Court has ruled that plaintiffs are entitled to be paid the full amount billed for past medical expenses rather than the actual amount paid by Medical Assistance or the health insurer.  This overcompensation occurs because the jury is not allowed to hear the evidence of the amounts actually paid by the plaintiff for his or her medical expenses (known as “phantom damages”).  These payments are also known as “collateral source” payments.
WMC supports LRB-0986 and encourages you to contact Sen. Paul Farrow and Rep. Andre Jacque to co-sponsor this legislation.
In one of the state Supreme Court cases pertaining to phantom damages, Koffman v. Leitchtfuss, the plaintiff was injured in an automobile accident and required medical treatment.  The total amount billed by the health care provider was $187,932.  However, due to contractual relationships between the health care provider and the health insurer, the plaintiff ended up paying only $66,063 for his medical expenses.
The defendants asked to introduce into evidence the amount actually paid ($66,063) by the plaintiff’s health insurer to prevent the plaintiff from receiving the full billed amount ($187,932).  The trial court allowed the defendant to introduce this evidence.  The state Supreme Court, however, reversed the decision of the lower court by stating that the “collateral source rule” prohibited the defendants from introducing into evidence the amount that was actually paid.
As a result, the plaintiff received the difference between the amount billed ($187,932) and the amount the plaintiff paid for his medical expenses ($66,063), a windfall of $121,969.
Wisconsin should join the many states that have adopted similar laws to prohibit or limit this excessive overcompensation.  Please contact Sen. Farrow or Rep. Jacque to co-sponsor LRB-0986 and limit phantom damages.




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