Illinois Supreme Court Hears Arguments as to Plaintiff's Damages: Can an Injured Plaintiff Claim the Full Amount of Medical Bills or Only the Reduced Amount Paid by Her Health Insurance Carrier?
December, 2005
The Illinois Supreme Court recently heard arguments in Arthur v. Catour, 803 N.E.2d 647 (3d Dist. 2004), a case involving the issue of whether a plaintiff in a personal injury case is allowed to claim as damages the total amount of her medical bills or only the discounted amount paid to her medical providers by her health insurance carrier pursuant to its contractual agreements with the providers.
Facts
Plaintiff Joyce Arthur broke her leg when she stepped into a hole at defendant’s farm while attending an auction; her medical bills totaled $19,355.25. Plaintiff’s health carrier, Blue Cross/Blue Shield, paid the providers a reduced amount of $13,577.97 pursuant to its contracts with them. The balance of $5,777.28 was simply “wiped out” as neither plaintiff nor her health carrier were responsible for it.
The trial court granted defendants’ motion for partial summary judgment and found that the lower amount -- $13,577.97 – would compensate plaintiff fully for her damages, would not punish the defendants, and would not bestow a windfall upon the plaintiff.
Analysis
The appellate court reversed with one justice dissenting. The majority found that the collateral source rule applied and that defendants could not “benefit” from the contracts between Blue Cross/Blue Shield and plaintiff’s medical providers. Under the collateral source rule, benefits received by an injured party from a source independent of the wrongdoer do not diminish plaintiff’s damages. Defendants did not dispute that the collateral source rule applied to the $13,577.97 which was covered by Blue Cross/Blue Shield – they argued simply that the rule did not apply to the $5,777.28 which Blue Cross/Blue Shield did not pay and for which plaintiff was not responsible, an argument which the majority rejected:
Plaintiff was billed over $19,000 and, but for her insurance coverage, she was liable for that amount. Limiting plaintiff’s damages to the amount paid by her insurer confers a significant benefit of that coverage on the defendants. This result is directly contrary to the collateral source rule’s goal of ensuring that the wrongdoer should not benefit from the expenditures made by the injured party or take advantage of contracts or other relations that may exist between the injured party and third persons. (citations omitted; italics in original)
The dissent opined, stating that the collateral source rule applies only to benefits actually received by the injured party and that plaintiff and her medical providers never received the $5,777.28 in dispute:
Had the plaintiff, or more accurately, her husband’s employer, actually contracted for payment of all charges at the maximum rate charged by a health care provider, I would agree that plaintiff is entitled to the disputed amount, as that would have been the amount she received from the collateral source. However, the benefit of the bargain in the plaintiff’s group health insurance policy was that the insurer would pay her reasonable medical expenses, whatever that amount turned out to be. The fact that her insurance company was able to negotiate with medical providers to reduce the amount it would have to pay to satisfy its obligation to plaintiff was the benefit flowing to the insurance company from its contract with the providers. In other words, the plaintiff got the benefit of her contract when the insurance company paid her medical bills leaving her no liability.
Learning Point:
This case goes directly to the heart of plaintiffs’ personal injury cases – the damages. As the majority noted, across the country, the discounting of medical bills is now a “common practice in modern healthcare.” In light of this case, it would be prudent to determine the amount paid by the health insurance carriers so that the “reduced” amount is readily known should the Supreme Court adopt the defense position. The Illinois Supreme Court is expected to render its decision in the next several months. We will monitor this important case and update our readers when the decision is handed down.
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