New collateral source rule research

"The Collateral Source Rule and Medicaid Plaintiffs: Eliminating Windfalls and Double Recovery"Thomas Jefferson Law Review, Vol. 30, 2007Contact: REBECCA F. ANDERSON Independent

http://ssrn.com/author=781664FullText:http://ssrn.com/abstract=974966

ABSTRACT: This Note examines damages awards for past medical expenses ofMedicaid plaintiffs and the collateral source rule's role in determiningthose damages. The traditional collateral source rule's substantivecomponent prohibits any reduction in the plaintiff's recovery for benefitsor payments the plaintiff receives from collateral sources, i.e. any sourceother than the defendant. The rules evidentiary component excludes admissionof any evidence of collateral sources. Two primary criticisms of the rule are: (1) windfalls to Medicaid plaintiffs when they recover more than Medicaid paid on their behalf, and (2) double recovery by Medicaid.

Resolving the difficulties of the rule requires a two-step solution. First, states should adopt a "real reasonable value"approach to the collateral source rule by allowing the parties to introduce evidence of the amounts billed for the services,amounts paid by Medicaid to satisfy the obligation, and evidence of automatic reimbursement to Medicaid.

Secondly, states should adopt two requirements in the handling of medicalexpenses for Medicaid plaintiffs: notify the state Medicaid agency when the plaintiff files suit against a defendant involving medical expenses paid by Medicaid and if the plaintiff recovers for medical expenses, the state Medicaid agency should automatically be reimbursed the amount they paid on plaintiff behalf after a pro rata reduction for their share of legal costs....