Critiquing a $9.8 Million Life Care Plan
You are retained by the defense to critique a life care plan in a premises-liability case. The plaintiff, a 28-year-old ironworker, fell 22 feet and sustained a T4 ASIA A paraplegia and a moderate traumatic brain injury. The treating physiatrist's most recent note states he is independent in transfers, self-catheterizes, drives a modified vehicle, and lives with his brother. The opposing plan, prepared by a certified life care planner, projects $9.8 million over a 46-year life expectancy and includes 24-hour RN care at $95 per hour for life, three inpatient rehabilitation admissions per year, a new power wheelchair every year, and a baclofen pump replacement every five years. The planner applied a 3% annual escalation to every line item and told the jury the resulting total is the 'present value.' Your engagement letter limits you to the reasonableness of the plan and the nursing-related cost projections.
1. Which three items would you challenge first, and what foundation would you demand for each?
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1. Twenty-four-hour RN care at $95/hour for 46 years (the dominant cost). Foundation demanded: a treating physician's prescription for skilled nursing, not a planner's judgment; a functional assessment (FIM or equivalent) documenting dependence; and evidence of a failed home trial of lesser support. A T4 ASIA A paraplegic who transfers independently, self-catheters, and drives does not on this record require a registered nurse around the clock. The defensible alternative, if any support is needed, is intermittent attendant or personal-care hours. This single item is where the case is won.
2. Power wheelchair replacement annually. Foundation demanded: the current prescription, manufacturer and dealer documentation, and the payer replacement schedule (typically about every five years for power mobility). Annual replacement has no clinical or equipment-life basis.
3. Three inpatient rehabilitation admissions per year for 46 years. Foundation demanded: an order from the physiatrist and a documented functional goal for each admission. Rehabilitation is episode-based and tied to a plateau or a new complication; a standing annual frequency is not a plan, it is an assumption.
Secondary: the life expectancy source (a table without adjustment for injury level and comorbidities) and the absence of any offset analysis for what the brother currently provides.
2. Explain the error in calling the escalated total the 'present value,' and demonstrate the correction with one line item.
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The error. Escalating every line item at 3% per year produces a nominal future-cost total - what the item will cost in the dollars of the year it is purchased. Present value is the opposite operation: it discounts future dollars back to today at a rate reflecting the time value of money. Applying escalation and then labeling the escalated sum 'present value' inflates the number, because the discount step was never performed. It is a two-step calculation and the plan performed only the first.
Demonstration. Take a $60,000-per-year item over 30 years, no escalation, discounted at 3%.
- Undiscounted: $60,000 × 30 = $1,800,000
- Present value annuity factor at 3%, 30 years: (1 − 1.03⁻³⁰) ÷ 0.03 = (1 − 0.4120) ÷ 0.03 = 19.60
- Present value: $60,000 × 19.60 = $1,176,000
The gap is $624,000 on one line item. Note also the offsetting relationship: if escalation and discount rates are identical, the two steps cancel and the present value approximates the simple sum - so the planner's method is only defensible if the chosen rates are justified and consistent.
Role boundary. My opinion addresses whether the item is reasonable, the frequency is supported, and the cost is sourced. Selecting the discount rate and performing the present-value calculation is the economist's work; I flag the methodological flaw and defer the arithmetic to the retained economist so the defense does not blur the two expert roles.
3. Counsel asks you to testify that the entire plan is excessive. What is your response, and why does it matter?
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I should decline to testify outside my retention, and say so now rather than at deposition.
My engagement letter limits me to the reasonableness of the plan and the nursing-related cost projections. Testifying that the entire $9.8 million plan is excessive would require me to opine on neurosurgical follow-up, durable medical equipment pricing, architectural modifications, and vocational/economic loss - areas where I have no stated basis and no retained qualification.
Why this matters practically:
- Scope creep is a credibility problem. On cross-examination, one answer outside my designated scope contaminates the answers inside it, including the 24-hour RN opinion, which is the opinion that actually helps the client.
- Report and disclosure obligations. If counsel wants broader opinions, the engagement and the disclosed opinions must be amended in the manner the rules and scheduling order require, with time to prepare and to be deposed on the new ground.
- Division of labor. The physiatrist, the rehabilitation engineer, the economist, and I each cover a slice. The defense's strongest available argument is that the life care planner strayed beyond her foundation; it would be self-defeating for me to commit the same error.
So: give counsel a written scope memo identifying the items I can and cannot address, and offer to expand the retention formally if he wants the equipment or architectural lines challenged.