HB 427 creates a new Louisiana law authorizing a “reversionary medical trust” in certain personal injury cases. When a court finds a liable party owes future medical and related benefits to a claimant, the insurer may place the amount due for those future expenses into a trust established for the claimant’s benefit. The trust is intended to pay medical care and related benefits as they are incurred, with the claimant required to submit original invoices for payment.
The bill specifies that the trust is to be established by the insurer and administered by a trustee appointed by the insurer, who must follow fiduciary duties under the Louisiana Trust Code and provide annual accountings. Any remaining funds revert to the party that created the trust when the claimant dies or when the trust ends under its terms. The bill also preserves a claimant’s ability to contract regarding attorney fees and costs, and it applies only prospectively to causes of action filed after the effective date.
Impact
HB 427 adds R.S. 13:4212 to the Louisiana Revised Statutes and changes how future medical damages may be handled in delictual/personal injury litigation. It gives insurers a statutory mechanism to satisfy future medical obligations through a reversionary trust rather than direct ongoing payment, while imposing invoice-submission, trustee review, fiduciary-duty, and annual-accounting requirements. The bill affects injured claimants, insurers, trustees, and medical providers involved in post-judgment payment of future care.
Sentiment
The bill appears to have received generally favorable support in the House, passing final passage with 62-22 and 63-22 votes. The vote margin suggests meaningful support but also notable opposition, consistent with a policy change that shifts administration of future medical payments and allows unused funds to revert to the paying party. No committee transcript was provided, so the available record shows support in floor voting but does not capture detailed debate.
Contention
The main point of contention is likely the reversion feature: funds left in the trust after the claimant’s death or termination return to the party that established the trust, which may be viewed as limiting recovery for claimants or their estates. Another likely issue is control over administration, since the insurer establishes the trust and appoints the trustee, raising concerns about neutrality and claimant protections. Supporters would emphasize structured payment of future medical expenses, fiduciary oversight, and accounting safeguards, while opponents may focus on claimant leverage, fairness, and the practical effect on personal injury recoveries.