The Tort Reform Wave: How FL, GA, and CA Are Changing Medical Expense Recovery — And What It Means for Pharmacy Liens

James Wong — Founder & Pharmacist, LienScripts | February 22, 2026 | 10 min read

Florida did it in 2023. Georgia followed in 2025. California may be next in 2026. A coordinated national push to limit medical expense recovery to 'amounts actually paid' or government reimbursement rates is reshaping lien-based care across the three largest personal injury states. Here's what each reform does and how to practice in this new environment.

A Pattern Emerges Across Three States

Three of the country's most active personal injury states have each passed — or are actively pursuing — legislation that fundamentally changes how medical expense damages are calculated in personal injury cases.

The changes follow a common template: rather than awarding the full billed amount of medical services, courts and juries would be limited to awarding the "reasonable value" of care — with the implicit or explicit benchmark being what insurance companies actually pay, or what government programs like Medicare and Medicaid reimburse.

For pharmacy liens — where the provider defers payment until settlement and charges market rates — these reforms go directly at the economic model. If a pharmacy lien program's collection is capped at what Medicare would have reimbursed, the lien-based model becomes economically unsustainable for many providers.

Understanding each reform in detail is essential for personal injury attorneys operating in any of these states.

Florida: HB 837 (2023) — "Amounts Actually Paid"

What Changed

Florida House Bill 837 was signed into law in March 2023, representing the most sweeping overhaul of Florida tort law in decades. On the medical expense side:

The "amounts actually paid" standard: Florida now limits claimable medical damages to amounts "actually paid" for medical care. For patients covered by health insurance, this means the negotiated rate the insurer paid — not the billed amount. For patients who received care under a letter of protection (LOP) or pharmacy lien, the "amounts actually paid" question is legally unsettled: since nothing is paid pre-settlement, courts have begun grappling with what "actually paid" means when the payment is deferred.

Mandatory LOP disclosure: A plaintiff relying on a letter of protection to claim medical damages must disclose the LOP arrangement to the defense at the outset of any LOP-based medical expense claim. This disclosure requirement is specifically aimed at letters of protection as a source of "inflated" medical expense claims — the legislature's stated concern that LOPs allow providers to bill at rates far exceeding what any insurer would pay.

Modified comparative fault (51% bar): Florida moved from pure comparative fault to modified comparative fault with a 51% bar. A plaintiff found 51% or more at fault is completely barred from recovery.

Two-year statute of limitations: The limitations period for negligence claims was reduced from four years to two years. Cases that would have been timely under the old law may now be barred.

What This Means for Pharmacy Liens in Florida

The "amounts actually paid" standard creates the most direct tension with pharmacy liens. A pharmacy lien is, by design, not paid before settlement. The pharmacy has deferred its entire claim to settlement — meaning, at the time the plaintiff presents their damages case, nothing has been "actually paid."

Two court theories are emerging in Florida:

One theory holds that lien-based pharmacy claims should be limited to what the pharmacy would have been paid if the patient had insurance — essentially treating the lien as if it were a negotiated insurance rate. This view would significantly reduce lien recovery.

The second theory treats deferred-payment lien claims as analogous to cash-pay rates — the reasonable market value for uninsured patients — which is generally closer to billed amounts. Under this theory, the lien recovery would be the reasonable cash-pay rate for each medication, which may still be substantially reduced from billed amounts in some markets.

Florida PI attorneys managing pharmacy liens should:

• Document the "reasonable value" of each lien prescription with market rate comparables
• Disclose lien arrangements early in litigation per the HB 837 LOP disclosure requirement
• Track developing case law on how Florida courts are applying "amounts actually paid" to lien-based providers

[!SOURCE] Florida HB 837 — Civil Remedies and Procedures (2023) — Full text of Florida's 2023 tort reform bill, including medical expense and LOP provisions.

Georgia: SB 68 (2025) — The "Phantom Damages" Rule

What Changed

Georgia Senate Bill 68 was signed into law on April 21, 2025, and took effect immediately for new claims. The centerpiece provision — now codified at O.C.G.A. § 51-12-1.1 — eliminates what Georgia legislators called "phantom damages."

The "reasonable value" standard (O.C.G.A. § 51-12-1.1):

Medical damages in Georgia personal injury cases are now limited to the "reasonable value of medically necessary care." The statute specifically makes admissible — as evidence of reasonable value — the amounts that private health insurers, Medicare, and Medicaid actually pay for comparable services in the relevant geographic area.

The effect is that a plaintiff can no longer claim the full billed amount of medical services. The defense can now introduce evidence that Medicare pays $X for a service and argue that $X is the ceiling on reasonable value. Courts will determine where in the range "reasonable value" falls.

Why this is called "phantom damages" elimination:

Georgia legislators argued that when a plaintiff bills $10,000 for a service that their insurer settles for $2,000, the $8,000 difference is "phantom" — it was never actually at risk, never actually paid, and represents a windfall to the plaintiff. The new statute is designed to prevent plaintiffs from claiming the full $10,000 as damages.

Retroactivity provisions: SB 68's reasonable value standard applies to cases filed on or after April 21, 2025. Pending cases filed before the effective date are governed by prior law.

What This Means for Pharmacy Liens in Georgia

In Georgia, pharmacy lien recovery is secured against the medical expense component of the settlement. If that component is now subject to a "reasonable value" cap informed by Medicare/Medicaid rates, pharmacy liens face potential reduction in contested cases.

However, the reasonable value standard is not automatically Medicare rate. It requires the defense to introduce evidence and the trier of fact to determine what is reasonable. For specialty PI medications — compounded topicals, longer-acting pain management formulations, medications not typically covered by Medicare at all — there may be no Medicare benchmark to use, and the "reasonable value" determination must rely on other market evidence.

Georgia PI attorneys managing pharmacy liens post-SB 68 should:

• Document the clinical necessity and market rate for each prescribed medication
• Obtain pharmacy pricing comparables that establish reasonable value independent of Medicare benchmarks
• Track SB 68 case law as courts interpret "reasonable value" in specific drug categories

[!SOURCE] Georgia SB 68 — O.C.G.A. § 51-12-1.1 (2025) — Georgia's 2025 tort reform statute eliminating "phantom damages" and establishing the reasonable value standard for medical expense recovery.

California: Initiative #25-0022 (2026 Ballot) — Government Rate Cap

What's Pending

California has not yet passed a law — but a ballot initiative now collecting signatures could, if it qualifies and passes, represent the most aggressive version of the "limit medical recovery" framework yet attempted.

Initiative #25-0022 — the "Protecting Automobile Accident Victims from Attorney Self-Dealing Act" — is backed primarily by Uber Technologies and was filed in October 2025. As of early 2026, signature collection is underway, targeting the November 2026 ballot.

The medical expense provision:

The initiative would explicitly cap medical provider recovery from auto accident personal injury cases at rates established by Medicare, Medi-Cal, and a national health insurance database. This goes further than either Florida or Georgia:

• Florida limits recovery to "amounts actually paid" — leaving open what that means for deferred-payment lien providers
• Georgia limits recovery to "reasonable value" — allowing a range of evidence, not just government rates
• California Initiative #25-0022 would explicitly cap at Medicare/Medi-Cal rates — the lowest reimbursement benchmark in the market

For lien-based pharmacy programs serving California auto accident patients, the economic analysis is straightforward: if providers cannot collect more than Medicare rates at settlement, the economics of deferring payment for months or years while providing medications become unviable for many providers.

Scope limitation: The initiative applies only to automobile accident personal injury cases. Pharmacy liens in slip-and-fall, premises liability, and other non-auto cases would not be directly affected by this provision.

Status as of early 2026: Signature gathering at approximately 25% of the required threshold. The initiative remains a risk to monitor, not an enacted law.

The Common Pattern: What Drives This Reform Wave

All three reforms share a structural fingerprint, and understanding the fingerprint helps predict where the wave goes next.

The insurance industry argument: In each state, the reform was backed — financially and politically — by insurance industry interests. The argument is that "phantom damages" allow plaintiffs and their providers to claim amounts that no real economic actor would ever pay, inflating settlement values and driving up premiums.

The "amounts actually paid" vs. "amounts billed" gap: The target in every reform is the spread between billed amounts and what insurers actually pay. For providers who accept insurance, this spread is settled by contract. For lien-based providers who defer all payment to settlement and charge market rates, the spread creates the legal battleground.

Lien-based care as the specific target: All three reforms implicitly or explicitly target letters of protection and lien arrangements as vehicles for inflated medical expense claims. The Florida LOP disclosure requirement makes this explicit. The Georgia reasonable value standard makes government rates admissible evidence. The California initiative directly caps at government rates.

The patient access trade-off: What none of the reforms adequately address is that lien-based care exists to solve an access problem — not to inflate bills. Uninsured accident victims who cannot access health insurance-funded care and cannot pay out of pocket have no other mechanism for prescription access during the months or years their case is pending. If lien-based providers cannot sustain their operations at government reimbursement rates, the population that loses access is precisely the uninsured and underinsured patient the reforms claim to protect.

Multi-State Practice Strategy for PI Attorneys

For attorneys with multi-state practices or clients in Florida, Georgia, or California:

In Florida:

• Disclose lien arrangements immediately under HB 837
• Build the "reasonable value" case for each lien prescription in the damages presentation
• Track the developing case law on "amounts actually paid" for lien-based providers

In Georgia:

• Document clinical necessity and individualized prescribing for each lien prescription
• Prepare to defend "reasonable value" against defense efforts to invoke Medicare benchmarks
• For specialty or compounded medications with no Medicare equivalent, document the market rate from alternative sources

In California (if initiative qualifies):

• Monitor signature gathering; qualify date is likely mid-2026
• For auto accident clients, begin planning lien enrollment with awareness that recovery may be reduced if the initiative passes
• For non-auto cases, the initiative does not apply — pharmacy liens for slip-and-fall, premises liability, and other case types continue under existing law

Related Resources

• Florida's 2023 Tort Reform (HB 837): What It Means for Pharmacy Liens
• Georgia's 2025 Tort Reform (SB 68): The Phantom Damages Rule and Pharmacy Liens
• California's 2026 Ballot Initiative Would Eliminate Lien-Based Medical Care
• What Is a Pharmacy Lien?
• Health Insurance Subrogation vs. Pharmacy Lien