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Article: Do I still have a case if health insurance pays my medical bills?, Car Accident Questions

Do I still have a case if health insurance pays my medical bills?

There are many times when a person is injured by the carelessness and negligence of somebody else, and a collateral source like the victim’s health care insurer pays his or her medical bills. When the injured person files a claim or lawsuit for damages and receives compensation for their injuries, a question arises as to whether the total payments made by the collateral source should be considered and deducted from the gross proceeds of the compensation.

What is a collateral source?

A collateral source is usually a business entity like a health care insurance company that is completely independent from a person who caused an accident. It compensates an injured person for some of the damages he or she suffered. That independent status makes the health care insurer collateral to the wrongdoer. In the case of a health care insurer, it would be compensating an accident victim for at least a percentage of his or her medical bills resulting from an accident that was caused by somebody else.

Colorado’s collateral source rule

Colorado’s legislature codified the collateral source rule with CRS 13-21-111.6. The statute consists of two components. Those are:

  • An evidentiary rule before a verdict
  • A setoff rule after a verdict

Before the rule was codified, any collateral payments made to an injured person were solely for his or her benefit, and they weren’t deducted from a damages award. Whether or not those payments operated as a windfall for the injured person was irrelevant. Today’s rule with the two components is different.

The evidentiary rule before a verdict

Any evidence of benefits paid by a collateral source isn’t admissible in a trial. The basis of the inadmissibility is that a jury shouldn’t be misled by such evidence. Courts wish to reduce the risk that a jury might unjustifiably infer that compensation has been paid by a collateral source. The rule applies even for purposes of trying to show the reasonable value of services rendered.

The setoff rule after a verdict

Once a verdict has been rendered, the setoff rule requires the trial court judge to reduce the injured person’s verdict by the amount he or she has been or will be wholly or partially compensated by any other person, company, fund or insurer in connection with the injury suffered.

The contract exception

The Colorado collateral source statute sets out an exception that’s triggered when benefits are paid to an injured party pursuant to a contract like a contract of insurance that was paid for by the injured person or somebody else on his or her behalf. The injured party need only give some form of legally recognized payment for the contract like money or services with the expectation of possibly receiving benefits from it sometime in the future. Depending on the collateral source, the exception can operate to reinstate the original uncodified collateral source rule. That might leave the door open to a windfall double recovery for the consumer who had the foresight to buy insurance.

The Made Whole Doctrine

Colorado’s Made Whole Doctrine has been codified at CRS 10-1-135. Under the right circumstances, this statute can operate to completely eliminate a health insurer’s right to reimbursement. That can increase the net proceeds of a settlement or verdict significantly. If federal benefits like Medicare or Medicaid are involved, they’re exempt from the doctrine. Some other exemptions also exist.

The law of personal injury involves complex litigation. In a car crash scenario, attorneys most prove negligence and damages. It’s not at all unusual for an adjuster or insurance defense attorney to allege that the injured person was comparatively negligent. That’s when the attorney representing the individual must play on both sides of the line. Don’t try to represent yourself against a well-trained adjuster or insurance defense attorney. Contact the personal injury team of Lamber Goodnow right away after any type of accident for a free case consultation and evaluation. We’re available to take your call at any time of any day. We’ll do whatever we can to maximize your recovery for you.

The Lamber Goodnow legal team, together with our partner personal injury law firm in Chicago, are experienced in these type of maters. Our Chicago personal injury lawyers never charge a fee, unless we win your case. Get a risk free consultation today.

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