Plaintiff can only recover amount actually paid by insurer for medical expenses

Law Reporter, May 2001

Plaintiff can only recover amount actually paid by insurer for medical expenses.

Hull v. Jackson, __So. 2d__, No. 1981499, 2001 WL 29258 (Ala. Jan. 12, 2001).

The Alabama Supreme Court held that a personal injury plaintiff is limited to recovering, for medical expenses, the amounts actually paid by her insurer for her medical bills, plus any co-payment, even though the amount would have been higher but for a contract between the medical services provider and the insurer.

Here, a woman was seriously injured in an automobile collision and sued the driver of the other car. The amount of money her insurer paid on her behalf for her medical expenses was far less than the amount billed to her, due to contracts between the insurer and the providers. Defendant moved for an order limiting plaintiff's claim to the amounts actually paid by the insurer. The trial judge ruled that, as a matter of law, plaintiff was limited to proving only those amounts actually paid by the insurer, plus her co-- payments. Plaintiff appealed that interlocutory order.

Affirming, the state high court observed that a plaintiff is entitled to recover all medical expenses necessarily incurred that the plaintiff has paid or become obligated to pay. Here, plaintiff did not incur costs merely because a bill may have been generated for a certain amount, given the existing agreements between the insurer and providers, the court noted.

Plaintiff had contended that such an outcome violates the collateral source rule. That rule, which is designed to prevent a tortfeasor from getting credit for a payment made by another party, is not implicated here, the court explained, because the payment made by the insurer is not being used to reduce the amount of expenses for which defendant is liable. The collateral source rule fairly applies where a plaintiff is liable for the entire cost of the medical care necessitated by defendant's wrongdoing. A plaintiff who never becomes liable to pay the providers anything beyond the amount of her co-payments is not damaged in any way by an agreement that happens to require a discount of the cost of the care that was provided, the court said.

Comment: In Acuar v. Letourneau, 531 S.E.2d 316, 43 ATLA L. Rep. 260 (Sept. 2000), the Virginia Supreme Court held that a plaintiff is entitled to the full amount of all medical bills incurred even if the physician accepted a discounted fee. Steven P. Letourneau, Virginia Beach, Va., represented plaintiff.