Fifth Circuit Rules on Applicability of the “Collateral Source Rule” for Medical Benefits Paid Under a Workers’ Compensation Insurance Policy Required by the Longshore and Harbor Workers’ Compensation Act

The Fifth Circuit Court of Appeals recently ruled that the “collateral source rule,” which prevents a defendant from reducing his liability by the amount a plaintiff recovers from independent sources such as health insurance, does not apply when the defendant’s workers’ compensation insurance carrier pays benefits pursuant to the Longshore and Harbor Workers’ Compensation Act (LHWCA). Under the court’s ruling, written off portions of billed medical expenses are not recoverable when the remaining portion of the billed medical expenses were paid through LHWCA workers’ compensation insurance.

In its opinion, the Fifth Circuit reasoned that, due to the requirement that maritime employers carry workers’-compensation insurance to pay for work-related injuries, any recovery from workers’-compensation may preclude additional awards from other sources. The ruling limits the ability of longshoremen to recover the full billed amounts of their medical damages resulting from an accident.

The plaintiff has not yet appealed the court’s ruling to the Supreme Court, but may do so. The Fifth Circuit’s holding undermines the ability of injured longshoreman and harbor workers from fully recovering their medical bills, and it may be used by defendants to argue against jury awards in the future. It is unclear how other circuits may view the legal question if similar cases are filed in their jurisdiction.

It takes the skill of a competent maritime attorney to insist that their client receive the proper amount of damages for injuries at sea. If you were seriously injured while working offshore as a seamen, it is important to find a law firm with experience handling maritime cases. The law firm of Abraham, Watkins, Nichols, Agosto, Aziz & Stogner is the oldest personal injury firm in Texas, and our attorneys are standing by to assist with your claim. Call us today at (713) 222-7211 or 713-222-7211 for your free consultation.