Personal Injury: What You Must Know About the Collateral Source Rule

Sally is injured in a car accident. Her injuries makediscounts the protection of the collateral source
her unable to work. She receives substantialrule, the majority opinion is just the opposite. A
discounts from her health care providers and hermajority of states permit a plaintiff to recover
remaining bills are paid by Medicaide.the amounts billed for medical care, even when
At trial the insurance defense attorney hired bythose amounts are discounted by the health care
the at-fault driver wants to tell the jury about theprovider pursuant to a contract with the injured
discounts and Medicaide payments.person's health insurer.
Will the trial judge allow him to do so?States That Have Modified Or Eliminated The Rule
No, says the "collateral source rule." At least not ifThe legislatures of twenty eight (28) states have
she lives in one of the states that still support theeither abolished or modified the collateral source
rule.rule.
Collateral Source Rule ExplainedThese states are as follows: Alabama, Alaska,
The term "collateral" as used here means simplyArizona, California, Colorado, Connecticut, Florida,
"additional". The at-fault driver or "tort-feasor" asHawaii, Idaho, Illinois, Indiana, Iowa, Kansas,
the law calls him, is responsible for making theKentucky, Maine, Michigan, Minnesota, Missouri,
injured person whole.Montana, New Jersey, New Mexico, New York,
This includes making sure her medical bills are paid.North Dakota, Ohio, Oklahoma, Oregon,
Medicaide and the discounts are "additionalPennsylvania, West Virginia.
sources" that have helped make Sally whole byHere is a list, as of the date of this article, of the
paying her medical bills.fourteen states that have completely abolished
In the American legal system laws can be madethe rule: Alaska, Colorado, Connecticut, Idaho,
by legislatures, administrative agencies, and byIndiana, Iowa, Kansas, Michigan, Minnesota, New
courts. The law created by courts is known asYork, North Dakota, Ohio, and Oregon.
common law. The collateral source rule was courtAt the National Association of Mutual Insurance
created in 1854.Companies website you can find a list of the
The essence of this rule is summarized in Black'sstates that have modified the rule with a
Law Dictionary as follows:summary of the modification:
"...if an injured person receives compensation forEven if you live in a state where the rule has
his injuries from a source wholly independent ofbeen abolished or limited by the legislature, you
the tort-feasor, the payment should not beshould check on the current status as some state
deducted from the damages [monetarysupreme courts have overruled the legislature and
compensation] which he would otherwise collectreinstated the rule.
from the tort-feasor. In other words, a defendantConclusion
tortfeasor may not benefit from the fact thatIf yours is one of the twenty two states that still
the plaintiff has received money from otherhave the collateral source rule in full or one of
sources as a result of the defendant's tort."fourteen that have retained it in part, you need
It is an evidentiary rule which means that theto know about and understand it.
injured person has the right to ask the judge toInsurance companies will try to reduce your
keep evidence of collateral source paymentscompensation by amounts which your health
away from the jury.insurance has paid. Be alert, don't let them put the
The most common collateral sources are medicalevidence in front of the jury.
insurance, workers compensation, VA medicalDisclaimer
benefits, Medicaide and other governmentThis article is for informational purposes only and
programs.is not intended to substitute for legal advice. Seek
Medical Discountsan opinion from an experienced injury attorney in
While some states have refused to give medicalyour state of residence.