The 125% Scam: How Florida’s New Tort Law Screws the Injured and Protects Insurance Giants
What Changed in Florida’s Personal Injury Law?
In 2023, Florida passed a big new law called House Bill 837 (HB 837), the largest tort reform in decades. “Tort reform” means changing how accident and injury lawsuits work in our state.
One of the biggest changes affects how much money an injured person can recover for their medical bills after a crash.
Under the old system, if you got hurt in an accident, your doctor might bill you $50,000 — and that full amount could be shown to the jury, even if your health insurance only paid $10,000. The law assumed you were on the hook for the total bill.
Now, Florida lawmakers decided that’s not fair to the insurance companies. So, they changed the rules to limit how much can be claimed or shown in court for medical bills
The 125% Rule, What It Means
Under the new law, insurance companies and defendants only have to pay for medical expenses based on government health-care rates — not what hospitals or doctors actually charge.
The key part of the law is found in Florida Statute § 768.0427, passed in March 2023. It says that if a person has unpaid medical bills, the amounts shown in court are limited to a percentage of what Medicare or Medicaid would pay.
Here’s the law in its own words:
Florida Statute § 768.0427(2)(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. Evidence offered to prove the amount necessary to satisfy unpaid charges for incurred medical treatment or services shall include only evidence of the amount necessary to satisfy such charges under one of the following:
(1) If the claimant has health care coverage other than Medicare or Medicaid, the amount the coverage is obligated to pay the medical provider for the services rendered, plus any copay or deductible;
(2) If the claimant has health care coverage through Medicare or Medicaid, 120 percent of the Medicare reimbursement rate or 170 percent of the applicable state Medicaid rate, whichever is greater;
(3) If the claimant does not have health care coverage, 120 percent of the Medicare reimbursement rate or, if there is no applicable Medicare rate, 170 percent of the applicable state Medicaid rate.”
In Plain English
That long legal paragraph means this:
- If you have health insurance, the most you can show in court is what your plan would have paid, not the inflated “sticker price.”
- If you’re on Medicare or Medicaid, the most you can show is 120% of the Medicare rate (or 170% of Medicaid, whichever is more).
- If you don’t have any insurance, the law still limits your medical bills to 125% (technically 120%) of Medicare rates, or 170% of Medicaid if no Medicare rate applies.
- So, if your hospital charged $10,000 for X-rays but Medicare would’ve paid $2,000, the most you can claim in your lawsuit is $2,400 (that’s 120% of $2,000).
You’ll never be able to show the full $10,000 to the jury again.
Why Lawmakers Did This
Supporters of the law, mostly insurance companies and big corporations, said it would stop “inflated medical bills” and “frivolous lawsuits.”
They argued that some doctors and clinics were using Letters of Protection (LOPs), agreements to treat patients now and get paid later from the lawsuit, and then charging five or six times what insurance normally pays.
So, the new law says juries can’t see those inflated numbers anymore. Only what’s “reasonable” under Medicare or Medicaid standards.
How This Hurts Florida’s Accident Victims
Here’s the problem: most accident victims don’t have Medicare or Medicaid, and even if they do, those programs pay only a fraction of the real cost of care.
Doctors who treat injury victims often don’t accept those low government rates, so this law pushes more doctors to refuse accident cases or cut back on treatment.
That means:
You may owe your doctor more money than you can legally recover in your case.
Insurance companies can settle for less, knowing your bills are capped.
It’s harder for injured people to get full and fair compensation.
For example:
You get hit on your Harley, break your leg, and rack up $50,000 in medical bills. Under this new law, the insurance company might argue that your “real” medical damages are only $8,000 (based on Medicare rates).
That’s all the jury sees, and that’s all they’ll pay you for.
What It Means for Settlement Negotiations
When I negotiate with insurance adjusters now, they pull out their “Medicare Rate Chart” and tell me that my client’s surgery only costs “$6,500 under the new law.”
Before HB 837, we could prove the real-world cost of care, the hospital’s actual bill, what specialists charged, what the client owed. Now, those real numbers are hidden from the jury.
This makes cases cheaper for insurance companies and harder for the injured to recover full value.
What Can Be Done
If you’ve been injured in Florida, it’s more important than ever to:
Hire a trial lawyer early. Evidence and billing details matter now more than ever.
Use doctors familiar with injury law. They’ll document your care properly and prepare records that hold up in court.
Don’t sign anything with insurance adjusters before speaking to an attorney.
Keep all your bills, EOBs, and insurance records. Even small differences can change your recovery under this law.
Final Thoughts from “The Attorney That Rides”
Florida’s so-called “tort reform” isn’t reform at all, it’s a backroom deal that protects insurance companies at the expense of hard-working Floridians. This law strips away the right of injured people to be made whole, forcing them to accept pennies on the dollar while billion-dollar insurers pad their profits. The Legislature threw the people under the bus to stay in the good graces of their donors, many of whom bankroll campaigns through industry PACs and lobbyists. It’s time voters demand accountability, every elected official who voted for this law should have to publicly declare if they received insurance industry money, directly or indirectly, before selling out the citizens they swore to represent. Until that happens, this law will keep punishing honest Floridians who did nothing wrong except get hurt on Florida’s roads.
