The summaries of the Colorado Court of Appeals published opinions constitute no part of the opinion of the division but have been prepared by the division for the convenience of the reader. The summaries may not be cited or relied upon as they are not the official language of the division. Any discrepancy between the language in the summary and in the opinion should be resolved in favor of the language in the opinion.
SUMMARY August 23, 2018
2018COA125
No. 17CA0663 Forfar v. Walmart — Insurance; Damages — Collateral Source Rule — Reduction of Damages for Payment From Collateral — Contract Exception
In this case, a division of the court of appeals concludes that
the trial court correctly applied both the pre-verdict collateral
source rule in section 10-1-135(10)(a), C.R.S. 2017, and the
contract exception in section 13-21-1111.6, C.R.S. 2017, to
Medicare benefits. The division also concludes that Medicare does
not preempt application of the state law collateral source doctrine. COLORADO COURT OF APPEALS 2018COA125
Court of Appeals No. 17CA0663 City and County of Denver District Court No. 15CV31638 Honorable John W. Madden IV, Judge
Robert P. Forfar III,
Plaintiff-Appellee,
v.
Wal-Mart Stores, Inc., d/b/a Wal-Mart, d/b/a Wal-Mart Supercenter, d/b/a Wal-Mart Supercenter #, d/b/a Wal-Mart Market, d/b/a Wal-Mart Neighborhood Market; Wal-Mart Stores East, LP, d/b/a Wal-Mart Stores East I, LP; Wal-Mart Associates, Inc.; Wal-Mart Store #984; and Castle Rock Wal-Mart Supercenter,
Defendants-Appellants.
JUDGMENT AFFIRMED
Division III Opinion by JUDGE WEBB Fox and Márquez*, JJ., concur
Announced August 23, 2018
Burg Simpson Eldredge Hersh & Jardine, P.C., Nelson Boyle, Englewood, Colorado, for Plaintiff-Appellee
Kutak Rock LLP, Mark C. Willis, Mia K. Della Cava, Denver, Colorado, for Defendants-Appellants
Heideman Poor LLC, John F. Poor, Denver, Colorado, for Amicus Curiae Colorado Trial Lawyers Association
*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2017. ¶1 This premises liability case presents a novel question in
Colorado: whether the collateral source rule — codified in section
10-1-135(10)(a), C.R.S. 2017, and section 13-21-111.6, C.R.S. 2017
— applies to Medicare benefits. We conclude that it does.
¶2 Wal-Mart Stores, Inc., appeals the judgment entered on a jury
verdict in favor of Robert P. Forfar III, for injuries he sustained
when he slipped and fell at a Wal-Mart store. The judgment
included $44,000 in economic damages for the reasonable value of
medical services that Mr. Forfar, a Medicare beneficiary, had
received.
¶3 Before trial, Wal-Mart moved to exclude evidence of Mr.
Forfar’s medical expenses owed under agreements that he had
entered into with his medical services providers. Wal-Mart argued
that because these agreements were null and void under Medicare
regulations, evidence of the reasonable value of those medical
services should be “limited to the Medicare approved charges for the
services.”1 Mr. Forfar also moved in limine to exclude any evidence
1 Walmart asserts in its opening brief that $9170.83 could have been properly charged under the Medicare limits for Mr. Forfar’s medical services. This amount was based on an expert disclosure that the trial court found untimely.
1 that he had received Medicare benefits, arguing that such benefits
constituted a collateral source.
¶4 The trial court ruled that Wal-Mart could “not present
evidence to the jury as to the amount of the Medicare limits.” The
court also ruled that Mr. Forfar “may not present evidence of private
contracts between himself and any of the Third-Party Medical
Providers.” Still, it allowed him to “present evidence of the
reasonable value of the medical services . . . and such value need
not be based upon the Medicare limits.” The trial proceeded
according to this ruling, with Mr. Forfar seeking damages of
$72,636 as the reasonable value of the medical services.
¶5 After trial, Wal-Mart moved to reduce the damages under
section 13-21-111.6. It argued that the economic damages awarded
for Mr. Forfar’s medical expenses “should be reduced to Medicare
accepted rates.” The trial court denied the motion, holding that
Medicare benefits fall within the contract exception to the collateral
source rule of section 13-21-111.6.
¶6 Wal-Mart challenges both of these rulings on appeal. We
affirm.
2 I. Background
¶7 In Colorado, the collateral source rule has both a pre-verdict
evidentiary component and a post-verdict component. The
evidentiary component is codified at section 10-1-135(10)(a). See
Smith v. Jeppsen, 2012 CO 32, ¶ 19 (stating that section
10-1-135(10)(a) “unambiguously codifies” the common law collateral
source rule). The post-verdict component is codified at section
13-21-111.6. Because this case involves both components, they
require separate discussion.
¶8 Generally, under the collateral source rule, “compensation or
indemnity received by an injured party from a collateral source,
wholly independent of the wrongdoer and to which the wrongdoer
has not contributed, will not diminish the damages otherwise
recoverable [by the injured party] from the wrongdoer.” Colo.
Permanente Med. Grp., P.C. v. Evans, 926 P.2d 1218, 1230 (Colo.
1996) (quoting Kistler v. Halsey, 173 Colo. 540, 545, 481 P.2d 722,
724 (1971)).
¶9 Pre-verdict, this doctrine applies “to bar evidence of collateral
source benefits because such evidence could lead the fact-finder to
improperly reduce the plaintiff’s damages award on the grounds
3 that the plaintiff already recovered his loss from the collateral
source.” Wal-Mart Stores, Inc. v. Crossgrove, 2012 CO 31, ¶ 12.
Section 10-1-135(10)(a) provides, “[t]he fact or amount of any
collateral source payment or benefits shall not be admitted as
evidence in any action against an alleged third-party tortfeasor.”
¶ 10 Still, our supreme court has recognized some tension between
“the pre-verdict evidentiary component of the collateral source rule
that controls this case and the reasonable value rule.” Crossgrove,
¶ 19. Specifically, “the correct measure of damages is the necessary
and reasonable value of the [medical] services rendered.” Kendall v.
Hargrave, 142 Colo. 120, 123, 349 P.2d 993, 994 (1960). And to
prove that value, the amount paid for medical services is “some
evidence of their reasonable value.” Id.
¶ 11 But what happens if evidence of the amount paid would
disclose a collateral source, thus risking that the jury could
improperly reduce the damages award for that reason?
¶ 12 In Crossgrove, ¶ 20, the supreme court resolved this tension
by holding that “the pre-verdict evidentiary component of the
collateral source rule prevails in collateral source cases to bar the
admission of the amounts paid for medical services.” It explained:
4 Admitting amounts paid evidence for any purpose, including the purpose of determining reasonable value, in a collateral source case carries with it an unjustifiable risk that the jury will infer the existence of a collateral source — most commonly an insurer — from the evidence, and thereby improperly diminish the plaintiff’s damages award.
Id. Particularly relevant here, the court offered an example: “[T]he
government sets the rates that providers who honor public
insurance programs, like Medicare and Medicaid, must accept for
certain services,” which “are often significantly lower than those
billed by the provider.” Id. at ¶ 22.
¶ 13 As to the post-verdict component, start with the rule: section
13-21-111.6 “requires the trial court to reduce a successful
plaintiff’s verdict as a matter of law by the amount the plaintiff ‘has
been or will be wholly or partially indemnified or compensated for
his loss by any other person, corporation, insurance company or
fund in relation to the injury . . . sustained.’” Id. at ¶ 14 (quoting
§ 13-21-111.6). Then consider the exception: the statute preserves
the common law post-verdict component of the collateral source
doctrine “to a limited extent by prohibiting trial courts from
reducing a plaintiff’s verdict by the amount of indemnification or
5 compensation that the plaintiff has received, or will receive in the
future, from ‘a benefit paid as a result of a contract entered into
and paid for by or on behalf of’ the plaintiff.’” Id. at ¶ 15 (quoting
§ 13-21-111.6).
¶ 14 So, given all this, what more need be said? A lot, according to
Wal-Mart, because the case involves Medicare — a context in which
the collateral source rule has yet to be addressed by any Colorado
court. After walking us through a labyrinth of federal statutes and
regulations, Wal-Mart asserts the following:
because Mr. Forfar’s providers, who are covered by Part B of
the Medicare program, failed to submit an affidavit opting out
of Medicare, they cannot recover more than Medicare allows
for their services, see 42 U.S.C. § 1395b-3 (2012); 42 U.S.C.
§ 1395u(b)(18)(B) (2012); 42 C.F.R. § 405.420 (2017);
to the extent that the providers’ private contracts with him
provided otherwise, because those contracts did not comply
with the disclosure requirements of Medicare, they are — as
the trial court found — null and void, see 42 U.S.C.
§ 1395a(b)(2)(B)(i)-(v) (2012); 42 C.F.R. § 405.405(c) (2017); 42
C.F.R. § 405.415 (2017); 42 C.F.R. § 405.430(b)(1) (2017);
6 “no person” can be liable above the Medicare limits for medical
services provided to a Medicare beneficiary, see 42 U.S.C.
§ 1395u(b)(18)(B) (“No person is liable for payment of any
amounts billed for such a service in violation of the previous
sentence.”); 42 U.S.C. § 1395w-4(g)(1)(A)(ii) (2012) (“No person
is liable for payment of any amounts billed for the service in
excess of such limiting charge.”); and
insofar as the collateral source rule or section 13-21-111.6
may provide for greater liability, they are preempted by
Medicare.
¶ 15 For his part, Mr. Forfar agrees that he was covered by
Medicare based on his Social Security Disability Insurance (SSDI)
benefits. Even so, after taking his own exhaustive tour of both
federal statutes and regulations, he responds that under Barnett v.
American Family Mutual Insurance Co., 843 P.2d 1302 (Colo. 1993),
Medicare is a collateral source, which triggers the evidentiary
limitation in section 10-1-135(10)(a) and is subject to the contract
exception of section 13-21-111.6.
¶ 16 But must we take an equally deep dive into federal statutes
and regulations to decide the narrow question whether the trial
7 court properly applied the collateral source rule, both pre-verdict
and post-verdict? No.
¶ 17 Instead, we assume, without deciding, that Mr. Forfar’s
providers are subject to the Medicare limits.2 Next, we conclude
that under Crossgrove, the trial court correctly applied both the
pre-verdict collateral source rule in section 10-1-135(10)(a) and the
contract exception in section 13-21-111.6. Finally, we conclude
that Medicare does not preempt application of the state law
collateral source doctrine.
II. Application of the Collateral Source Rule
A. Standard of Review
¶ 18 The parties agree that we review a trial court’s evidentiary
rulings for an abuse of discretion. Crossgrove, ¶ 7. A trial court
abuses its discretion when its ruling derives from an erroneous
application of the law or when its ruling is manifestly arbitrary,
unreasonable, or unfair. Smith v. Kinningham, 2013 COA 103, ¶ 9.
2 Because we assume, without deciding, that the private contracts are null and void — and thus Mr. Forfar’s providers are subject to the Medicare limits — we need not address Walmart’s argument that cases preceding the enactment of these regulations are no longer good law.
8 ¶ 19 The parties also agree that whether a trial court has applied
the correct legal standard presents a question of law subject to de
novo review. Crossgrove, ¶ 7. So does interpretation of a statute.
Id.
B. Pre-Verdict Application of the Collateral Source Rule to Medicare Benefits
¶ 20 Should benefits payable up to Medicare limits have been
admitted to show the reasonable value of Mr. Forfar’s medical
services or do those benefits constitute a collateral source, subject
to the evidentiary bar of section 10-1-135(10)(a)? We conclude that
the evidentiary bar applies.
¶ 21 To begin, in Smith the supreme court held that section 10-1-
135(10)(a) “clearly and unambiguously states that ‘the fact or
amount of any collateral source payment or benefits shall not be
admitted as evidence in any action against an alleged third-party
tortfeasor.’” ¶ 21 (quoting § 10-1-135(10)(a)). The court explained
that a “collateral source is a person or company, wholly
independent of an alleged tortfeasor, that compensates an injured
party for that person’s injuries.” Id.
9 ¶ 22 A benefit is not excluded from the definition of a collateral
source merely because it comes from a government program. To
the contrary, Colorado courts have held that benefits from Social
Security, Medicaid, and public retirement plans all meet the
definition of a collateral source. See Pressey v. Children’s Hosp.
Colo., 2017 COA 28, ¶ 13 (“Private insurance, private disability
benefits, [SSDI], and retirement benefits all fall within the contract
exception to the collateral source statute.”); Kinningham, ¶ 15
(“[T]he alleged Medicaid benefits were paid on [the plaintiff’s] behalf,
and fall squarely within the definition of a collateral source.”).
¶ 23 This is so because under the collateral source rule,
making the injured plaintiff whole is solely the tortfeasor’s responsibility. Any third-party benefits or gifts obtained by the injured plaintiff accrue solely to the plaintiff’s benefit and are not deducted from the amount of the tortfeasor’s liability. These third-party sources are “collateral” and are irrelevant in fixing the amount of the tortfeasor’s liability.
Volunteers of Am. Colo. Branch v. Gardenswartz, 242 P.3d 1080,
1082-83 (Colo. 2010).
¶ 24 Undaunted, Wal-Mart argues that “amounts paid by Medicare
are dispositive of the necessary and reasonable value of medical
10 services provided” because Mr. Forfar never incurred liability for
any greater amounts. And allowing him to recover more than the
Medicare limits, Wal-Mart continues, results in a windfall for him.
One does not usually think of applying the collateral source rule to
Medicare as creating a windfall, where the recipient has given value
by paying social security taxes during his or her work life. But to
the extent that a windfall occurs, we conclude that the plaintiff —
not the tortfeasor — should be the beneficiary.
¶ 25 Recall, our supreme court has acknowledged that “healthcare
providers accept significantly less than the amount billed for certain
services in satisfaction of government insured patients’ bills.”
Crossgrove, ¶ 22. Even so, by any reckoning, “the pre-verdict
evidentiary component of the collateral source rule prevails over the
older ‘reasonable value rule,’ which allowed trial courts to admit
evidence of the amount actually paid for healthcare services.”
Kinningham, ¶ 18.
¶ 26 This application of the collateral source rule “prohibits the
wrong-doer from enjoying the benefits procured by the injured
plaintiff.” Gardenswartz, 242 P.3d at 1083. The supreme court
justified applying the prohibition because
11 [i]f either party is to receive a windfall, the rule awards it to the injured plaintiff who was wise enough or fortunate enough to secure compensation from an independent source, and not to the tortfeasor, who has done nothing to provide the compensation and seeks only to take advantage of third-party benefits obtained by the plaintiff.
Id.; see also Crossgrove v. Wal-Mart Stores, Inc., 280 P.3d 29, 33
(Colo. App. 2010) (rejecting the defendant’s argument that the
“collateral source rule does not apply to written-off expenses
because the rule ‘excludes only “evidence of benefits paid by a
collateral source”’” (quoting Robinson v. Bates, 857 N.E.2d 1195,
1200 (Ohio 2006))), aff’d, 2012 CO 31.
¶ 27 Still persisting, Wal-Mart cites some out-of-state authority
holding that Medicare benefits do not constitute a collateral source
and “the amount paid by Medicare [is] dispositive of the reasonable
value of healthcare provider services.” Stayton v. Del. Health Corp.,
117 A.3d 521, 533 (Del. 2015). But these cases do not treat the
collateral source rule as broadly as section 10-1-135(10)(a) does;
the statute bars evidence of “the fact or amount of any collateral
source payment or benefits.” (Emphasis added.) See Sinclair
12 Transp. Co. v. Sandberg, 2014 COA 76M, ¶ 38 (“[T]he term ‘any’
means ‘without limit or restriction.’”) (citation omitted).
¶ 28 Unsurprisingly, “[a] majority of courts have concluded that
plaintiffs are entitled to claim and recover the full amount of
reasonable medical expenses charged, based on the reasonable
value of medical services rendered, including amounts written off
from the bills pursuant to contractual rate reductions.” Felts v. Bd.
of Cty. Comm’rs, No. 13-CV-1094-MCA/SCY, 2017 WL 3267742, at
*4 (D.N.M. July 31, 2017) (quoting Pipkins v. TA Operating Corp.,
466 F. Supp. 2d 1255, 1259 (D.N.M. 2006)); see Bynum v. Magno,
101 P.3d 1149, 1162 (Haw. 2004) (Limiting the reasonable value of
medical services “to the pecuniary loss suffered by a plaintiff would
mean, for example, that injured plaintiffs who received gratuitous
medical services, were treated at a veteran’s hospital, or were
covered by medical insurance plans such as offered to Kaiser
Hospital patients would not be entitled to recover any monetary
amount from the tortfeasor (except perhaps nominal out-of-pocket
fees) . . . . [S]uch an approach [is] contrary to the ‘great weight of
authority in this country.’” (quoting Pryor v. Webber, 263 N.E.2d
235, 240 (Ohio 1970))).
13 ¶ 29 The majority rule better aligns with our supreme court’s view
in Crossgrove that “[d]ue to the nature of modern healthcare billing
practices, a reasonable juror could easily infer the existence of a
collateral source if presented with evidence, for example, that the
provider accepted $40,000 in satisfaction of a $250,000 medical
bill.” Crossgrove, ¶ 21.
¶ 30 For these reasons, we conclude that the trial court properly
held Medicare benefits to be a collateral source inadmissible as
evidence based on section 10-1-135(10)(a). In other words, the
reasonable value of Mr. Forfar’s medical services was not limited to
amounts that Medicare paid to his providers, even assuming that
they could receive no more from Mr. Forfar or anyone who might be
vicariously liable to them, such as a guarantor. But that
conclusion brings us to the contract exception.
C. Post-Verdict Application of the Contract Exception in Section 13-21-111.6
¶ 31 Should the trial court have reduced Mr. Forfar’s damages for
Medicare benefits or do those benefits fall within the contract
exception of section 13-21-111.6? We further conclude that they
fall within the contract exception.
14 ¶ 32 Recall, the General Assembly modified the common law
collateral source rule by enacting section 13-21-111.6. The first
clause directs a trial court to reduce a plaintiff’s award for any
benefits the plaintiff received from collateral sources. But the
second clause says “the verdict shall not be reduced by the amount
by which [the injured plaintiff] has been or will be wholly or
partially indemnified or compensated by a benefit paid as a result of
a contract entered into and paid for by or on behalf of such person.”
§ 13-21-111.6 (emphasis added).
¶ 33 Although no Colorado court has addressed Medicare benefits
under section 13-21-111.6, the reasoning of cases sweeping other
benefits under this section is informative as to Medicare benefits.
¶ 34 The division in Pressey, ¶ 14, explained that “Medicaid
benefits are paid on behalf of [the plaintiff], and she was required to
enter into a written Medicaid application agreement to repay the
state for any Medicaid benefits she receives for which she would not
qualify under the federal guidelines.” Thus, “[u]nder section
13-21-111.6, these benefits are dependent upon ‘a contract entered
into . . . by or on behalf of’ [the plaintiff] for which she remains
financially responsible.” Id. (quoting § 13-21-111.6).
15 ¶ 35 In Barnett, 843 P.2d at 1310, the supreme court held that
SSDI “benefits fall within the exception to section 13-21-111.6”
because they “are the result of payments made under a
contributory insurance system, rather than gratuities or public
assistance.”
¶ 36 In Van Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070, 1079
(Colo. 1992), the supreme court held that disability benefits payable
to a firefighter under a public pension plan fell within the contract
exception to the collateral source statute:
Because an employee exchanges something of value, his services, in return for an employment contract and its derivative benefits, benefit payments received as part of the compensation for these services are entitled to the same protection against offset that would apply to benefits received as a result of an insurance contract for which that person had paid money.
¶ 37 Consistent with these Colorado cases, in Baumann v. American
Family Mutual Insurance Co., Civ. A. No. 11-cv-00789-CMA-BNB,
2012 WL 122850, at *7 (D. Colo. Jan. 17, 2012), the federal district
court addressed Medicare benefits under section 13-21-111.6. It
found “no meaningful difference between Medicare and SSDI
16 benefits given that they are funded by the same employment
taxation scheme.” Id.
¶ 38 And in Berg v. United States, 806 F.2d 978, 985 (10th Cir.
1986), the court reasoned:
Further support for the conclusion that Medicare benefits are a collateral source is provided by the decisions of the other courts that have considered the issue. They have each concluded that when a plaintiff has paid Social Security taxes while employed, any Medicare benefits that are subsequently received are a collateral source.
¶ 39 Similarly, in applying the contract exception to the Medicare
benefits received by Mr. Forfar, the trial court explained that Mr.
Forfar was eligible for Medicare based on his SSDI benefits (not
based on his age). Then the court noted that Mr. Forfar had
“qualified for SSDI benefits . . . after he had accumulated a
sufficient work history, and . . . [as a] result of his contributions to
Social Security.” It found that “Medicare benefits available as a
result of [Mr. Forfar’s] eligibility for SSDI benefits also fall under the
contract exception of [section] 13-21-111.6.”
¶ 40 Like the court in Baumann, we perceive no meaningful
difference between SSDI benefits and Medicare benefits. Thus,
17 because the supreme court has concluded that SSDI benefits “fall
within the exception to section 13-21-111.6,” Barnett, 843 P.2d at
1310, we conclude that Mr. Forfar’s Medicare benefits — which
were available to him based on his SSDI benefits — also fall within
this exception.
¶ 41 Even so, Wal-Mart argues that the contract exception should
not apply to any charges that exceeded the Medicare limits because
Mr. Forfar is not liable for these charges. In other words, no benefit
is involved. And Wal-Mart points out “at least one court has
recognized that the value of Medicare-approved rates inures
primarily to the benefit of the program and taxpayers, not
plaintiffs.” See Stayton, 117 A.3d at 534.
¶ 42 Yet, a similar argument was rejected by the supreme court in
Gardenswartz, 242 P.3d at 1086-87. There, the plaintiff’s
“healthcare providers billed $74,242 for their services in treating his
injuries,” but because the plaintiff’s insurance company “satisfied
his medical debts with a payment of $43,236,” the plaintiff “could
not be billed the difference.” Id. at 1085. Based on this discount,
the defendant argued “that the pricing differential between the
18 amounts billed and the amounts paid is illusory because the
charges are never actually paid by anyone.” Id. at 1086.
¶ 43 The supreme court disagreed. It held that “by discharging [the
plaintiff’s] obligations to his medical providers, the insurer’s
remittances do constitute a ‘benefit’ that was ‘paid.’” Id. (emphasis
added). This is so because “[i]f [the plaintiff] had not had insurance
coverage, he would have been liable for the entire amount billed or
he may not have been treated at all.” Id. By the same token, had
Mr. Forfar not been Medicare eligible, he would have been liable
above the Medicare limits.
¶ 44 In the end, we conclude that the trial court properly applied
the contract exception in section 13-21-111.6 to Medicare benefits.
III. Medicare Statutes Do Not Preempt Colorado’s Collateral Source Rule
¶ 45 Despite all of this, Wal-Mart contends the trial court violated
the Supremacy Clause by “failing to apply the express provisions of
Medicare statutes and regulations over the collateral source rule.”
Specifically, Wal-Mart asserts that under the Medicare statutes,
“‘No Person’ — which would include a defendant or alleged
tortfeasor such as Wal-Mart — may be held liable for ‘payment of
19 any amounts billed’ in excess of Medicare approved charges.” This
contention does not survive scrutiny.
A. Preservation and Standard of Review
¶ 46 Wal-Mart does not point to where it raised preemption before
the trial court. Still, Mr. Forfar does not challenge preservation.
Regardless, we need not comb through the record to determine if
preemption was raised, because we can exercise our discretion to
review a preemption claim, especially where — like here — no
further record development is required. See Fuentes-Espinoza v.
People, 2017 CO 98, ¶ 19.
¶ 47 Federal preemption is a question of law subject to de novo
review. Kohn v. Burlington N. & Santa Fe R.R., 77 P.3d 809, 811
(Colo. App. 2003).
B. Law
¶ 48 The preemption doctrine, derived from the Supremacy Clause,
U.S. Const. art. VI, mandates that state law give way when it
conflicts with federal law. Id.
¶ 49 Congressional intent to preempt state law may be explicitly
stated in the federal statute. Banner Advert., Inc. v. City of Boulder,
868 P.2d 1077, 1080 (Colo. 1994). Even absent such explicit
20 language, however, preemption occurs when state law conflicts with
federal law. Id. This type of preemption — conflict preemption —
“is implicated when it is impossible for a private party to
simultaneously comply with both state and federal laws, or where
the state law ‘stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of Congress.’” Id.
(footnote omitted) (quoting Hines v. Davidowitz, 312 U.S. 52, 67
(1941)).
¶ 50 Wal-Mart argues only conflict preemption.
C. Analysis
¶ 51 Analysis of federal preemption begins with “the basic
assumption that Congress did not intend to displace state law.”
Middleton v. Hartman, 45 P.3d 721, 731 (Colo. 2002) (quoting
Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). In other words,
“while Congress has the power to preempt state law, it is
anticipated that state and federal law will peaceably coexist.” Id.
(citation omitted).
¶ 52 Wal-Mart relies on two Medicare statutes to overcome this
presumption:
21 42 U.S.C. § 1395u(b)(18)(B), which says that “[a] practitioner
described in subparagraph (C) or other person may not bill (or
collect any amount from) the individual or another person for
any service described in subparagraph (A), except for
deductible and coinsurance amounts applicable under this
part. No person is liable for payment of any amounts billed for
such a service in violation of the previous sentence”; and
42 U.S.C. § 1395w-4(g)(1)(A)(ii), which says that “[n]o person is
liable for payment of any amounts billed for the service in
excess of such limiting charge.”
¶ 53 Although neither of these statutes expressly preempts
Colorado law, Wal-Mart argues that the trial court’s application of
the collateral source rule effectively held Wal-Mart liable for
“amounts billed” by Mr. Forfar’s providers in excess of Medicare
limits, which conflicts with the “no person is liable” language of
these statutes. Wal-Mart does not assert statutory ambiguity,
relying instead on the plain language.
¶ 54 Wal-Mart cites no authority applying conflict preemption to
either statute, nor have we found such authority. And in any event,
22 the plain language of these statutes does not support Wal-Mart’s
interpretation.
¶ 55 Looking first at 42 U.S.C. § 1395u(b)(18)(B), Wal-Mart does not
cite authority, nor have we found any, applying the “no person
liable” language to tortfeasors. But even if this language could be
applied to Wal-Mart, it would limit liability only for amounts billed
by practitioners: a “practitioner described in subparagraph (C) . . .
may not bill . . . for any service described in subparagraph (A),
except for deductible and coinsurance amounts applicable under
this part.” 42 U.S.C. § 1395u(b)(18)(B); see Clemons v. Quest
Diagnostics, Inc., No. 99 C 6122, 2000 WL 950291, at *3 (N.D. Ill.
June 6, 2000) (“Subparagraph (B) limits the paragraph’s
applicability to the services described in subparagraph (A), which by
its terms applies only to services furnished by a practitioner
described in subparagraph (C).”).
¶ 56 Wal-Mart has not been billed for any of Mr. Forfar’s medical
services by his providers, Medicare, or anyone else. Rather, and
consistent with the collateral source rule, the jury awarded Mr.
Forfar the reasonable value of their services. And it did so without
having seen any of the providers’ bills.
23 ¶ 57 Turning to 42 U.S.C. § 1395w-4(g)(1)(A)(ii), this section
prohibits a nonparticipating physician or nonparticipating supplier
or other person (as defined in § 1395u(i)(2)) from billing a
beneficiary for an amount that exceeds a statutorily defined
“limiting charge.” See White v. Jubitz Corp., 219 P.3d 566, 575 (Or.
2009). Again, Wal-Mart cites no authority, nor have we found any,
applying this prohibition to a tortfeasor. Given that the subject line
of this subsection is “[l]imitation on beneficiary liability,” 42 U.S.C.
§ 1395w-4(g) (emphasis added), this lack of authority is
unsurprising. See Larson v. Sinclair Transp. Co., 2012 CO 36, ¶ 8
(“We may also consider the title of the statute and any
accompanying statement of legislative purpose.”).
¶ 58 But even if the “no person is liable” language in 42 U.S.C.
§ 1395w-4(g)(1)(A)(ii) could apply to a tortfeasor such as Wal-Mart,
this section only precludes liability “for payment of any amounts
billed.” Again, no amounts have been billed to Wal-Mart.
¶ 59 In sum, we conclude that the Medicare statutes relied on by
Wal-Mart do not preempt Colorado law holding it liable for the
reasonable value of Mr. Forfar’s medical services.
24 IV. Attorney Fees
¶ 60 Mr. Forfar requests appellate attorney fees under section
13-17-102(2), C.R.S. 2017, because Wal-Mart’s appeal lacked
substantial justification. But the issues presented by Wal-Mart
were novel, supported by some out-of-state authority, and thus “not
wholly devoid of legal merit or justification.” Tidwell v. Bevan
Props., Ltd., 262 P.3d 964, 969 (Colo. App. 2011). For these
reasons, we exercise our discretion and decline to award attorney
fees.
V. Conclusion
¶ 61 The judgment is affirmed.
JUDGE FOX and JUDGE MÁRQUEZ concur.