The specific question is: does the collateral source rule protect the amounts discounted from the plaintiff's medical bill or written off by the medical provider? The West Virginia Supreme Court holds that it does, because the amount of the medical expense that was discounted or written off can be considered both a benefit of the plaintiff's bargain with his health insurance carrier, and a gratuitous benefit arising from the plaintiff's bargain with the medical provider. A creditor's forgiveness of debt — that is what a write-down in the present context amounts to — is often considered equivalent to payment in other contexts, for example, income tax, credit bids at foreclosure, et cetera. In other words, a creditor's partial forgiveness of a tort victim's medical bills via a write-down is properly considered a third-party payment, evidence of which is barred by the collateral source rule. The general rule is that a plaintiff who has been injured by the tortious conduct of the defendant is entitled to recover the reasonable value of medical and nursing services reasonably required by the injury. This is a recovery for their value and not the expenditures actually made or obligations incurred.
Plaintiff suffered permanent spine damage in a car wreck caused by a drunk driver. The plaintiff sought to recover his entire bill. The defendant contended that he should only answer for amounts actually paid by the plaintiff or his health insurance, thus, any amount written-off should be excluded. The circuit court disagreed with the defendant, stating that any discount or write-offs were a collateral source to the plaintiff. Thus, pursuant to the collateral source rule, the plaintiff was entitled to recover damages for the value of any reasonable and necessary medical services he received, "whether such services are rendered gratuitously or paid for by another." The jury awarded compensatory damages to the plaintiff, which included the amount almost equal to plaintiff’s medical bills.
May a tortfeasor be benefitted by any discount or write-off agreed to by the victim’s health care provider?
Where a person's health care provider agrees to reduce, discount or write off a portion of one's medical bill, the collateral source rule permits the person to recover the entire reasonable value of the medical services necessarily required by the injury, and the tortfeasor is not entitled to receive the benefit of the reduced, discounted or written-off amount. Whether the plaintiff took benefits from his health insurer in the form of medical expense payments or in the form of discounts and write-offs is irrelevant, and those amounts written off are as much of a benefit for which the plaintiff paid consideration as are the actual cash payments made by his insurer to the health care providers. The circuit court in this case did not err in applying the collateral source rule to prohibit the driver from introducing evidence of the passenger's discounted medical bills.