| Sally is injured in a car accident. Her injuries make her | | | | The most common collateral sources are medical |
| unable to work. She receives substantial discounts | | | | insurance, workers compensation, VA medical benefits, |
| from her health care providers and her remaining bills | | | | Medicaid and other government programs. |
| are paid by Medicaid. | | | | Medical Discounts |
| At trial the insurance defense attorney hired by the | | | | While some states have refused to give medical |
| at-fault driver wants to tell the jury about the discounts | | | | discounts the protection of the collateral source rule, |
| and Medicaid payments. Will the trial judge allow him to | | | | the majority opinion is just the opposite. A majority of |
| do so? | | | | states permit a plaintiff to recover the amounts billed |
| No, says the "collateral source rule." At least not if she | | | | for medical care, even when those amounts are |
| lives in one of the states that still support the rule. | | | | discounted by the health care provider pursuant to a |
| Collateral Source Rule Explained | | | | contract with the injured person's health insurer. |
| The term "collateral" as used here means simply | | | | States That Have Eliminated The Rule |
| "additional." The at-fault driver or "tortfeasor" as the | | | | Here is a list, as of the date of this article, of the |
| law calls him, is responsible for making the injured | | | | fourteen states that have completely abolished the |
| person whole. This includes making sure her medical | | | | rule: Alaska, Colorado, Connecticut, Idaho, Indiana, Iowa, |
| bills are paid. Medicaid and the health insurance | | | | Kansas, Michigan, Minnesota, New York, North Dakota, |
| discounts are "additional sources" that have helped | | | | Ohio, and Oregon. |
| make Sally whole by paying her medical bills. | | | | The other 36 states have retained the rule in whole or |
| In the American legal system laws can be made by | | | | in part. Even if you live in a state where the rule has |
| legislatures, administrative agencies, and by courts. The | | | | been abolished or limited by the legislature, you should |
| law created by courts is known as "common law." | | | | check on the current status as some state supreme |
| The collateral source rule was court created in 1854. | | | | courts have overruled the legislature and reinstated the |
| The essence of this rule is summarized in Black's Law | | | | rule. |
| Dictionary as follows: | | | | Conclusion |
| "...if an injured person receives compensation for his | | | | If yours is one of the states that still has the collateral |
| injuries from a source wholly independent of the | | | | source rule in full or in part, you need to know about it |
| tortfeasor, the payment should not be deducted from | | | | and understand how it applies to your case. |
| the damages [monetary compensation] which he | | | | Insurance companies will try to reduce your |
| would otherwise collect from the tortfeasor. In other | | | | compensation by amounts which your health insurance |
| words, a defendant tortfeasor may not benefit from | | | | has paid. Be alert, don't let them put the evidence in |
| the fact that the plaintiff has received money from | | | | front of the jury. |
| other sources as a result of the defendant's tort." | | | | Disclaimer |
| The collateral source rule is a "rule of evidence." This | | | | This article is for informational purposes only and is not |
| means that the injured person has the right to ask the | | | | intended to substitute for legal advice. Seek an opinion |
| judge to keep evidence of collateral source payments | | | | from an experienced injury attorney in your state of |
| away from the jury. | | | | residence. |