Section 1. Title. This Act may be known as the Phantom Damages Elimination Act.

Section 2. Purpose. The purpose of this Act is to provide fair compensation for past and future medical expenses based on the reasonable value of medical services and treatment.

Section 3. Definitions. For purposes of this Act:

(a) “Factoring company” means any person or entity that purchases a healthcare provider’s accounts receivable at a discount below the invoice value of such accounts.
(b) “Health plan” means any medical care insurance, healthcare insurance, health benefit plan, employer-provided healthcare plan or medical insurance, workers’ compensation insurance, Medicaid, Medicare, other public or government-sponsored healthcare insurance or benefit program, or other similar source available to pay for services provided to the injured person at the time or after the medical services or treatment were provided.
(c) “Healthcare provider” includes hospitals, institutions, laboratories, pharmacies, doctors, physicians, optometrists, chiropractors, dentists, nurses, pharmacists, therapists and any other medical or healthcare facility, professionals or persons who diagnose, evaluate, treat, or otherwise deliver medical services or treatment to a plaintiff.
(d) “Letter of protection” means any arrangement by which a healthcare provider renders treatment in exchange for a promise of payment for the plaintiff’s expenses for medical services or treatment from any judgment or settlement of a personal injury or wrongful death action. The term includes any such arrangement, regardless of whether referred to as a letter of protection.
(e) “Medical services or treatment” means any actions taken by a healthcare provider to observe, identify, diagnose, stabilize, address, ameliorate, correct, remedy, rehabilitate, manage, combat or care for a plaintiff’s injury, condition, disease or disorder, or symptoms of a plaintiff’s injury, condition disease or disorder. The term includes any equipment, facilities, medicines, drugs, prescriptions, devices, or products provided or applied to a plaintiff by a healthcare provider or consumed by a plaintiff at a healthcare provider’s direction.

Section 3. Damages Recoverable for Medical Services or Treatment. Except as provided in by Section 4, in an action to recover damages resulting from injury or death, damages that may be recovered for the reasonable value of any necessary medical services or treatment may not exceed amounts actually:

• (a) paid by or on behalf of the plaintiff to healthcare providers who rendered medical services or treatment;
• (b) necessary to satisfy charges for medical services or treatment that are due and owing to healthcare providers but at the time of trial are not yet satisfied; and
• (c) necessary to provide medical treatment or services the plaintiff will need in the future.

Section 4. Establishing the Reasonable Value of Medical Services or Treatment. Evidence to establish the reasonable value of past or future medical services or treatment in any action to recover damages resulting from injury or death is admissible as provided in this section.

• (a) Evidence offered to prove the amount of damages for past medical treatment or services that have been satisfied is limited to evidence of the amount actually paid, regardless of the source of payment.
• (b) Evidence offered to prove the amount necessary to satisfy unpaid charges for incurred medical services or treatment shall include, but is not limited to, evidence as provided in this paragraph.
  • (1) If the plaintiff is covered by a health plan, evidence of the amount that such health plan is obligated to pay the healthcare provider to satisfy the charges for the plaintiff’s incurred medical services or treatment, plus the plaintiff’s share of medical expenses under the health plan.
  • (2) If the plaintiff is covered by a health plan but obtains treatment under a letter of protection or otherwise does not submit to the health plan for payment any charges for any healthcare provider’s medical services or treatment, evidence of the amount the plaintiff’s health plan would pay the healthcare provider to satisfy the past unpaid medical charges, plus the plaintiff’s share of medical expenses under the health plan, had the plaintiff submitted the healthcare provider’s charges to the health plan for payment.
  • (3) If the plaintiff obtains medical services or treatment under a letter of protection and the healthcare provider subsequently transfers the right to receive payment under the letter of protection to a third party, evidence of the amount the third party paid or agreed to pay the healthcare provider in exchange for the right to receive payment pursuant to the letter of protection.
  • (4) Any evidence of reasonable amounts billed to the plaintiff for necessary medical services or treatment provided to the plaintiff.
• (c) Evidence offered to prove the amount of damages for any future medical services or treatment the plaintiff will receive shall include, but is not limited to, evidence as provided in this paragraph.
  • (1) If the plaintiff is covered by a health plan or is eligible for any such medical care plan, evidence of the amount for which the future charges of healthcare providers could be satisfied if submitted to such health plan, plus the plaintiff’s share of medical expenses under the health plan.
  • (2) Any evidence of reasonable future amounts to be billed to the plaintiff for necessary medical services or treatment that will be provided to the plaintiff.

Section 5. Disclosure of Letters of Protection and Referral Arrangements. In any action to recover damages resulting from injury or death, when asserting any claim for damages for medical services or treatment rendered under a letter of protection, the plaintiff must disclose to the other parties to the action:

• (a) A copy of the letter of protection.
• (b) All charges for the plaintiff’s medical expenses, which shall be itemized and, to the extent applicable, coded according to generally accepted medical billing practices.
• (c) If the healthcare provider sells the accounts receivable for the plaintiff’s medical expenses to a factoring company or other third party:
  • (1) The name of the factoring company or other third party that purchased such accounts.
  • (2) The dollar amount for which the factoring company or other third party purchased such accounts, including any discount provided below the invoice amount.
• (d) Whether the plaintiff, at the time medical services or treatment was rendered, had coverage pursuant to a health plan and, if so, the identity of such health plan.
• (e) Whether the plaintiff 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 plaintiff’s attorney, disclosure of the referral is permitted and not protected by any privilege, and evidence of such referral is admissible. In such situation, the financial relationship between a law firm and a medical provider, including the number of referrals, frequency, and financial benefit obtained, is relevant to the issue of the bias of a testifying medical provider