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Felts v. Board of County Commissioners of Valencia County

United States District Court, D. New Mexico

July 31, 2017

NATHAN FELTS, Plaintiff,


          M. CHRISTINA ARMIJO Chief United States District Judge

         THIS MATTER is before the Court on Defendants' Motion in Limine to Exclude Evidence and/or Recovery of Medical Bills as Opposed to What was Paid by Medicaid Because Such Alleged Damages are Wholly Speculative and Not Subject to the Collateral Source Rule, filed October 19, 2016. [Doc. 72] This Court has considered the Motion, the briefs, the relevant law, and is otherwise fully informed. The Court concludes that the Motion is not well taken, and shall be denied.


         Plaintiff was shot in the face and in the shoulder by Valencia County Deputy Sheriff David Hill. [Doc. 46 ¶ 34; Doc. 51 ¶ 34] He filed this lawsuit claiming, among other things, excessive force in violation of his Fourth Amendment rights, and assault and battery under the New Mexico Tort Claims Act. [Doc. 12 ¶¶ 64, 68-70] Additional facts are available in the Court's previous rulings including, most recently, the Court's September 23, 2016 Memorandum Opinion and Order pertaining to Defendants' and Plaintiff's respective Motions for Summary Judgment. [Doc. 67]

         Plaintiff contends that the medical bills associated with this lawsuit total $299, 796.97. [Doc. 73 p. 1; Doc. 72-2 p. 12-13] $145, 198.00 of that amount was paid by Medicaid through New Mexico's Medicaid management company, Presbyterian Salud (now called New Mexico Centennial Care). [Doc. 72-2 p. 12-13; Doc. 73 p. 1] The parties suggest, but have yet to demonstrate, that the remaining sum has been or will be “written off” by the hospital. [Doc. 72 p. 5; Doc. 73 p. 6] Defendants argue that some of the charges comprising Plaintiff's total medical bills are unrelated to the shooting incident underlying this lawsuit; however, this contention is not the subject of the present Motion, and the issue is not addressed in this Order. [Doc. 72 p. 2]

         In the present Motion, Defendants seek to bar from evidence at trial documentation or testimony regarding the amount of Plaintiff's medical bills as opposed to the sum actually paid by Medicaid. [Doc. 72 p. 1-3] In support of their Motion, Defendants argue that Plaintiff's Medicaid benefits are not a “collateral source” because a portion of Valencia County tax revenues contribute to the funding of Medicaid. [Doc. 72 p. 4]

         The Collateral Source Rule

         “The general rule is that benefits received by the plaintiff from a source collateral to the defendant may not be used to reduce that defendant's liability for damages.” Dan B. Dobbs, Law of Remedies 372-73 (2d ed. 1993). New Mexico adheres to this general rule. See Pipkins v. TA Operating Corp., 466 F.Supp.2d 1255, 1258 (D.N.M. 2006) (“Under New Mexico law, compensation received from a collateral source does not operate to reduce damages recoverable from a wrongdoer.” (Alteration omitted)); Sunnyland Farms, Inc. v. Cent. N.M. Elec. Co-op., Inc., 301 P.3d 387, 401 (N.M. 2013) (“In New Mexico, the collateral source rule dictates that the contribution of a collateral source must operate to benefit the plaintiff rather than the defendant.”). Thus, “[u]nder the collateral source rule, a plaintiff may recover his full losses from the responsible defendant, even though he may have recovered part of his losses from a collateral source.” Pipkins, 466 F.Supp.2d at 1258. A “collateral source” is a source of funds that is “distinct from the funds of the defendant.” Berg v. United States, 806 F.2d 978, 984 (10th Cir. 1986). “One of the reasons commonly given in support of the collateral source rule is that the rule preserves subrogation rights of any insurer who paid benefits to the plaintiff.” Dobbs, supra, at 374.

         “A number of cases have allowed the plaintiff to recover full damages against the defendant, even though the plaintiff's loss has been reduced by some form of public benefit.” Id. at 373; Cates v. Wilson, 361 S.E.2d 734, 737-38 ( N.C. 1987) (“Medicaid is a form of insurance paid for by taxes collected from society in general. The Medicaid program is social legislation; it is the equivalent of health insurance for the needy; and, just as any other insurance form, it is an acceptable collateral source.”); Young v. Baltimore & O. R. Co., 146 S.E.2d 441, 446 ( N.C. 1966) (“The majority rule of the cases is that an injured person is entitled to recover . . . damages for reasonable medical, hospital, or nursing services rendered him, [regardless of] whether these are rendered him gratuitously[.]”). And in the Tenth Circuit, “[o]ur cases have always treated payments from the public treasury, at least when funded by a tax scheme to which the injured party contributed, as from a collateral source.” Green v. Denver & Rio Grande W. R.R. Co., 59 F.3d 1029, 1032 (10th Cir. 1995).

         Medicaid in New Mexico

         “The New Mexico Medicaid program is administered pursuant to regulations promulgated by the federal department of health and human services under Title XIX of the Social Security Act . . . and by state statute.” NMAC 8.300.1.3. The New Mexico Human Services Department is responsible for the administration of the Medicaid program. NMAC 8.300.1.9. And when the state Human Services Department “makes medical assistance payments on behalf of a recipient, the department is subrogated to any right of the recipient against a third party for recovery of medical expenses to the extent that the department has made payment.” NMSA 1978, Section 27-2-23(B) (2007).

         Medicaid is jointly funded by the federal government and states., Medicaid Financing & Reimbursement, (last visited June 13, 2017). The federal government pays states for a specified percentage of Medicaid program expenditures, which scheme is called the Federal Medical Assistance Percentage (FMAP). Id. From 2012-2015, the years during which Plaintiff received the relevant medical care, the FMAP in New Mexico was just under 70%, [1] meaning that the State of New Mexico's contribution to Medicaid was approximately 30%. U.S. Department of Health & Human Services, Federal Medical Assistance Percentages or Federal Financial Participation in State Assistance Expenditures, (3/1/2015) available at

         Defendants' Arguments

         Defendants argue that “Medicaid payments are not collateral to the County” because the County “collected taxes from its citizens and paid them into the Medicaid fund as required by New Mexico law.” [Doc. 72 p. 5-6] The “Medicaid fund” to which Defendants refer is the “county-supported Medicaid fund” which was created for the purpose of “leverag[ing] existing resources to better address the state's health care needs.” NMSA 1978, § 27-10-2(B) (1996). The county-supported Medicaid fund accomplishes “this purpose by using local revenues to support the state [M]edicaid program and to institute or support primary care health care services pursuant to Section 24-1A-3.1 NMSA 1978.” NMSA 1978, § 27-10-2(B). “Money appropriated from the county-supported [M]edicaid fund to institute or support primary care health care services pursuant to Section 24-1A-3.1 NMSA 1978 [is] supplemental to general fund appropriations.” NMSA 1978, § 27-10-2(B). Valencia County contributes to this fund a sum representing 1/16 of 1% of the gross receipts taxes it collects from any person engaging in business in the County. [Doc. 72-1 p. 1] See NMSA 1978, ยง 7-20E-18(A) (2009) (authorizing the governing body of any county to establish a tax at a rate of one-sixteenth percent of the gross receipts to fund the county-supported Medicaid fund); NMSA 1978, ...

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