Robert P. Forfar III, Plaintiff-Appellee,
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.
and County of Denver District Court No. 15CV31638 Honorable
John W. Madden IV, Judge
Simpson Eldredge Hersh & Jardine, P.C., Nelson Boyle,
Englewood, Colorado, for Plaintiff-Appellee
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
and Márquez [*] , JJ., concur
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." Mr. Forfar also moved in limine to exclude
any evidence 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
6 Wal-Mart challenges both of these rulings on appeal. We
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 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
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:
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 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);
• "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
• 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 ...