Medical Expenses, Volunteers of America Case – How This Case Affects You

Colorado’s laws change constantly. And when they do, Denver personal injury law firm Bell & Pollock stays on top of them. That’s because we realize new laws often affect people in profound ways. That’s why we’re proud to be your legal information center in Colorado.

Take medical expenses. Bills can add up fast after a car accident or truck accident in Colorado. But who pays these bills – and how much – can often be a hotly debated topic. That’s why a 2010 court case decided by a 4-3 vote by the Colorado Supreme Court was so important and still affects families throughout the state to this day.

Volunteers of America v. Tucker and what this case means for you

In a big win for insured plaintiffs, the Colorado Supreme Court has held that the proper measure of medical damages in a personal injury case is the amount billed, not the amount paid.  This means that defendants will be required to pay for the reasonable value of the damages that they cause.  They will not receive a windfall if your insurance company works out a discount with your medical providers.

Our law firm has highlighted the pitfalls of the collateral source rule before.  The collateral source rule allows defendants to reduce their liability by amounts that plaintiffs receive from third parties for their injuries.  However, under what is termed the “contract exception” to the collateral source rule, benefits that you receive pursuant to a contract, such as health insurance that you pay for directly, cannot be used to offset damages.  The rationale behind the exception is that tortfeasors should not be able to reduce their liability by taking advantage of benefits that you work for or pay for.

Tortfeasors try to reduce their liability by arguing that the amount of medical bills paid by plaintiffs rather than incurred is the measure of their liability.  They argue that these amounts come from collateral sources and can be used to reduce recovery.  Oftentimes, your insurer has a special deal or rate with doctors, hospitals, and other health care providers.  Say you get in a car accident and your health insurer pays for your care. When you go to the hospital, your insurer will bargain with the hospital to pay an amount less than the actual bill, oftentimes engaging in deals to pay off claims in bulk for a discount.  These savings help keep premiums low for customers.  In exchange, the providers expand their patient base and avoid litigation and collection costs on unpaid bills.  In many cases, the amount that your insurer ultimately pays your health care provider is less than the actual bill.  This type of bargaining is good for providers, good for health insurers and good for patients.

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Irresponsible parties try to use the work of your insurer to their advantage.  When your health insurer gets a discount, they argue that they are entitled to a discount too.  They argue that they should not have to pay the amount of damage that they actually caused.  They state that they should be able to take advantage of the bargaining between the health insurer and the care provider and subtract the discount from the damages that they pay you.  Your insurer works out these deals on your dime. With your premiums.  The kind of deals and bargains that providers negotiate with insurance companies are not available to the average person. When a tortfeasors injures a person with no health insurance or medical pay coverage, there is no question that they are liable for the full amount of bills.  Should the careless benefit from a plaintiff’s insurance?  Should they get to pay less to a person who purchased insurance than a person who did not?  Should responsible individuals that purchase insurance be punished in court for having coverage?

On November 15 2010, the Supreme Court of Colorado issued a resounding “NO” to the questions above in Volunteers of America v. Colorado, 09SC20 (Colo. 2010).  In this case, Defendant Volunteers of America sought to reduce their damages by the approximately $30,000 that were discounted to the Plaintiff’s private health insurer.  The Court poignantly wrote:

The collateral source rule prevents VOA from standing in Tucker’s shoes and enjoying the same discounted medical rates as his insurance company receives. To hold otherwise is to allow the tortfeasor to receive a windfall in the amount of the benefit conferred to the plaintiff from a source collateral to the tortfeasor. The General Assembly wrote the contract clause to preserve the common law collateral source rule and prevent a windfall to a tortfeasor when a plaintiff received benefits arising out of the plaintiff’s contract. By retaining the collateral source rule through the contract clause, the General Assembly avoided this unjust result.

Cut through the confusion. Contact Bell & Pollock today. We can help

What’s hot can change from one week to the next. But you can rely on Bell & Pollock to track the latest trends and hot legal topics from Denver to Washington, D.C. You can then find out more about these topics here and in our videos and podcasts. Many of our podcasts capture our live weekly radio broadcasts, which deal directly with a wide range of legal topics. These radio shows also enable the public to ask questions and receive knowledgeable answers from Bell & Pollock about legal issues that matter to you and the rest of the public.

Know your rights. Call (877) 744-5900 or (303) 795-5900 and schedule a free case evaluation. One call can change your life. Contact us and discover what we can do for you.

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