Title: Arthur v. Catour

State: illinois

Issuer: Illinois Supreme Court

Document:

Docket Nos. 97920, 97946 cons.-Agenda 
17-November 2004.
JOYCE ARTHUR, Appellee, v. LAURIE CATOUR
et al., Appellants.
Opinion filed July 21, 2005.
JUSTICE FREEMAN delivered the opinion of the court:
We are presented with the following certified question:
"Whether the Plaintiff who was charged $19,355.25 in 
medical bills for medical services related to her injuries can present that 
amount of bills as medical expenses in the case or, whether the Plaintiff shall 
be limited to presenting only $13,577.97 in medical bills to the jury because 
that is the amount that was paid by the Plaintiff and Blue Cross/Blue Shield, 
who was an insurance carrier for the Plaintiff and who paid the Plaintiff's 
medical bills pursuant to insurance contracts at a substantially reduced rate 
with the medical providers and which the providers accepted as payment in full."
We hold that a plaintiff may present to the jury the 
amount that the plaintiff's health-care providers initially billed for services 
rendered.

BACKGROUND
Plaintiff, Joyce Arthur, brought a personal injury action 
in the circuit court of Henry County against defendants Laurie Catour and 
Stenzel Brothers Auction Services, Inc. Plaintiff alleged that on October 2, 
1999, defendant Stenzel Brothers was conducting an auction on a farm that 
defendant Catour owned. Plaintiff further alleged that, while attending the 
auction, she stepped in a hole in Catour's yard, fell, and was injured. 
Plaintiff alleged negligence on the part of each defendant and sought damages. 
Each defendant filed an answer denying negligence or liability.
Discovery ensued. In her answers to defendant Stenzel 
Brothers' interrogatories, plaintiff stated that she fractured her leg just 
below the knee, which required surgery. Plaintiff also disclosed the categories 
of damages that she sought. Included in this list was: "Incurred medical to 
date-$19,314.07." The following facts are undisputed. Through February 2002, 
plaintiff received services from various health-care providers valued at 
$19,355.25. Plaintiff had private, group health insurance with Blue Cross/Blue 
Shield (Blue Cross) through her husband's employer.
Further, Blue Cross had contractual agreements with 
plaintiff's health-care providers. Through this arrangement, many of the charges 
for health-care services rendered were discounted. Several examples are 
illustrative. Plaintiff received health-care services from Orthopedic 
Specialists valued at $4,308.70. However, based on their arrangement, Blue Cross 
actually paid the provider only $1,800.90 and plaintiff personally paid $375.10, 
for a total actual payment of only $2,176, which satisfied the bill. The 
provider discounted the remaining $2,132.70.
Likewise, plaintiff received health-care services from 
Genesis Medical Center valued at $7,425.49. However, $4,642.06 from Blue Cross 
and $522.51 from plaintiff, a total of $5,164.57, satisfied the bill. The 
provider discounted the remaining $2,260.92. Plaintiff received health-care 
services from Hammond-Henry Hospital valued at $5,299.56. However, $4,218.67 
from Blue Cross and $59.64 from plaintiff, a total of $4,278.31, satisfied the 
bill. The provider discounted the remaining $1,021.25. Plaintiff received 
health-care services from St. Joseph Medical Center valued at $1,214.70. 
However, $877.90 from Blue Cross and $258.49 from plaintiff, a total of 
$1,136.39, satisfied the bill. The provider discounted the remaining $78.31. 
Plaintiff received health-care services from Heart Care Midwest valued at $117. 
However, $88.80 from Blue Cross satisfied the bill. The provider discounted the 
remaining $28.20. In this manner, plaintiff's health-care providers discounted a 
total of $5,777.28; Blue Cross and plaintiff actually paid a total of only 
$13,577.97 to satisfy the $19,355.25 of billed health-care services rendered.
Defendants filed a motion for partial summary judgment, 
seeking to limit plaintiff's claim for medical expenses to the amount paid 
rather than the amount billed. Granting defendants' motion, the circuit court's 
order stated in part:
"The court does not find that the collateral source rule 
applies to the present set of facts, and to allow the plaintiff to seek and 
recover $19,355.25 worth of medical damages when she was only charged for and 
became liable for $13,577.97 would only serve to punish the defendants 
punitively and provide a windfall for the plaintiff."
The court ruled that "plaintiff will be limited to seeking 
compensatory damages not exceeding those actually paid to her medical 
providers."
The circuit court certified the above-quoted legal 
question for immediate appeal. The appellate court allowed plaintiff's 
application for leave to appeal pursuant to Supreme Court Rule 308 (155 Ill. 2d 
R. 308).
The appellate court, with one justice dissenting, reversed 
the circuit court's entry of partial summary judgment for defendants. 345 Ill. 
App. 3d 804. The appellate court majority held that "plaintiff's damages are not 
limited to the amount paid by her insurer, but may extend to the entire amount 
billed, provided those charges are reasonable expenses of necessary medical 
care." 345 Ill. App. 3d at 808.
Presiding Justice Holdridge dissented, reasoning as 
follows: "Here, the amount received from the plaintiff's insurance 
company in full payment of plaintiff's past medical expenses-$13,577.97-will be 
fully protected by the collateral source rule. The additional $5,777.28 needs no 
such protection, as the plaintiff never incurred or became obligated for that 
expense." (Emphasis in original.) 345 Ill. App. 3d at 809 (Holdridge, P.J., 
dissenting). He concluded: "I see no legal reason to allow the plaintiff to 
recover for expenses she never paid nor ever became obligated to pay as a result 
of the negligence of the defendant." 345 Ill. App. 3d at 810 (Holdridge, P.J., 
dissenting).
Each defendant petitioned for leave to appeal. 177 Ill. 2d 
R. 315(a). We allowed each petition and consolidated the appeals. We granted the 
Illinois Trial Lawyers Association leave to submit an amicus curiae 
brief in support of plaintiff. We also granted the Illinois Association of 
Defense Trial Counsel leave to submit an amicus curiae brief in support 
of defendants. See 155 Ill. 2d R. 345. We now affirm the judgment of the 
appellate court and reverse the circuit court's entry of partial summary 
judgment in favor of defendants.

ANALYSIS
We note at the outset our standard of review. In this 
case, we review the propriety of the appellate court's answer to the certified 
question. The pertinent facts being undisputed, the certified question 
essentially asked whether the trial court's grant of partial summary judgment in 
favor of defendants was legally correct. "If the facts are uncontroverted and 
the issue is the trial court's application of the law to the facts, a court of 
review may determine the correctness of the ruling independently of the trial 
court's judgment." Norskog v. Pfiel, 197 Ill. 2d 60, 70-71 (2001); see
Woods v. Cole, 181 Ill. 2d 512, 516 (1998) (stating rule that questions 
of law are reviewed de novo); Adams v. Northern Illinois Gas Co., 
211 Ill. 2d 32, 43 (2004) (stating rule that summary judgment rulings are 
reviewed de novo). Accordingly, our review is de novo.
"Under the collateral source rule, benefits received by 
the injured party from a source wholly independent of, and collateral to, the 
tortfeasor will not diminish damages otherwise recoverable from the tortfeasor."
Wilson v. The Hoffman Group, Inc., 131 Ill. 2d 308, 320 (1989); see 
Beaird v. Brown, 58 Ill. App. 3d 18, 21 (1978), quoting Bireline v. 
Espenscheid, 15 Ill. App. 3d 368, 370 (1973); 11 Ill. Jur. Personal 
Injury & Torts §5:62, at 354 (2002). Defendants do not dispute that the 
collateral source rule protects the $13,577.97 that Blue Cross paid and 
plaintiff's health-care providers accepted as payment in full. Rather, 
defendants contend that the collateral source rule does not apply to the 
$5,777.28 difference between the amount billed and the amount paid. Plaintiff 
contends that the collateral source rule protects the entire $19,355.25 
initially billed.
The collateral source rule protects collateral payments 
made to or benefits conferred on the plaintiff by denying the defendant any 
corresponding offset or credit. Such collateral benefits do not reduce the 
defendant's tort liability, even though they reduce the plaintiff's loss.
"They do not have the effect of reducing the recovery 
against the defendant. The injured party's net loss may have been reduced 
correspondingly, and to the extent that the defendant is required to pay the 
total amount there may be a double compensation for a part of the plaintiff's 
injury. But it is the position of the law that a benefit that is directed to the 
injured party should not be shifted so as to become a windfall for the 
tortfeasor." Restatement (Second) of Torts §920A, Comment b, at 514 
(1979).
Accord Muranyi v. Turn Verein Frisch-Auf, 308 
Ill. App. 3d 213, 215 (1999); 2 D. Dobbs, Remedies §8.6(3), at 493 (2d ed. 
1993). The rule operates to prevent the jury from learning anything about 
collateral income. Boden v. Crawford, 196 Ill. App. 3d 71, 76 (1990).

A situation in which courts frequently apply the 
collateral source rule is where the defendant seeks a reduction of damages 
because the plaintiff has received insurance benefits that partly or wholly 
indemnifies the plaintiff for the loss. Wilson, 131 Ill. 2d  at 320; 
Peterson v. Lou Bachrodt Chevrolet Co., 76 Ill. 2d 353, 362 (1979); accord 
1 D. Dobbs, Remedies §3.8(1), at 373 (2d ed. 1993). The rule is well established 
that damages recovered by the plaintiff from the defendant are not decreased by 
the amount the plaintiff received from insurance proceeds, where the defendant 
did not contribute to the payment of the insurance premiums. Peterson, 
76 Ill. 2d  at 362; see Biehler v. White Metal Rolling & Stamping Corp., 
30 Ill. App. 3d 435, 444 (1975). "The justification for this rule is that the 
wrongdoer should not benefit from the expenditures made by the injured party or 
take advantage of contracts or other relations that may exist between the 
injured party and third persons." Wilson, 131 Ill. 2d  at 320; see 11 
Ill. Jur. Personal Injury & Torts §5:63 (2002). Also: "Calling 
attention to the fact that a plaintiff had such insurance can be prejudicial 
error because the jury may conclude that plaintiff sustained no damages for 
which he was entitled to recover if his medical bills were paid by insurance."
Biehler, 30 Ill. App. 3d at 444; accord Boden, 196 Ill. App. 
3d at 76.
The dual nature of the collateral source rule is evident:
"The traditional approach is to treat [the collateral 
source rule] as having substantive and evidentiary components. The substantive 
component is a rule of damages. This component bars a defendant from reducing 
the plaintiff's compensatory award by the amount the plaintiff received from the 
collateral source. The evidentiary component bars admission of evidence of the 
existence of the collateral source or the receipt of benefits. The concern here 
is that the trier of fact may use that evidence improperly to deny the plaintiff 
the full recovery to which he is entitled." J. Fischer, Understanding Remedies 
§12(a), at 77 (1999).
Clearly, to the extent the evidentiary component of the 
collateral source rule implicates the substantive component of the rule, the 
evidentiary component applies only to prevent defendants from introducing 
evidence that a plaintiff's losses have been compensated for, even in part, by 
insurance.
However, the collateral source rule is not an evidentiary 
rule that permits a defendant to limit a plaintiff's ability to introduce 
evidence of the reasonable cost of health care necessitated by the defendant's 
conduct.
"The usual [collateral source rule] case is one in which 
the plaintiff is injured by the defendant's tort but suffers no actual medial 
expense loss because those expenses are paid for by the plaintiff's own medical 
insurance or paid for as part of government benefits to veterans. In these cases 
the rule is quite firm that the defendant must pay for the reasonable value of 
medical services reasonably required even though the plaintiff's own insurance 
has paid for such services." 1 D. Dobbs, Remedies §3.8(1), at 373 (2d ed. 1993).
Accord Wilson, 131 Ill. 2d  at 320.
In the present case, plaintiff received health-care 
services and became liable for the resulting expenses upon receipt of those 
services, not when the final bill was eventually issued. Her liability was not 
somehow nonexistent merely because the providers submitted bills directly to her 
insurer. Indeed, it is not uncommon for an insurer, upon receipt of such bills, 
to deny coverage, leaving the patient/plaintiff personally liable for the 
balance. For example, the policy might have lapsed for nonpayment of premiums, 
or the policy may not cover some services, such as cosmetic or reconstructive 
surgery.
The medical expenses for which plaintiff was liable were 
covered in full by her health insurance. The bill was paid in part and the 
balance written off pursuant to a contractual arrangement between the insurer 
and the provider-a contract to which the plaintiff was not a party. Thus, the 
collateral source was the insurance company and not the so-called "discount." To 
restate the obvious: plaintiff did not receive a discount from the provider. 
Rather, plaintiff received the benefit of her bargain with her insurance 
company-full coverage for incurred medical expenses.
This leads us to the certified question, which presents a 
question of proof rather than of entitlement, i.e., a question 
involving an evidentiary component of the collateral source rule and not a 
substantive rule of damages. Plaintiff, of course, is entitled to recover as 
compensatory damages the reasonable expense of necessary medical care resulting 
from defendants' negligence, if proved. See Chicago City Ry. Co. v. Henry, 
218 Ill. 92, 95 (1905); accord Donk Bros. Coal & Coke Co. v. Thil, 228 Ill. 233, 241-42 (1907); Department of Law Enforcement v. Willis, 61 
Ill. App. 3d 495, 498 (1978). The only relevant question in the litigation 
between plaintiff and defendants is the reasonable value of the services 
rendered. The certified question merely asks whether certain evidence is 
admissible in such cases.
The controlling principles are quite settled:
"In Illinois, the question of damages is peculiarly one of 
fact for the jury. Flynn v. Vancil, 41 Ill. 2d 236, 240, 242 N.E.2d 237, 240 (1968). The rules regarding the admissibility of evidence of medical 
expenses and the burden of proving medical expenses are well established. In 
order to recover for medical expenses, the plaintiff must prove that he or she 
has paid or become liable to pay a medical bill, that he or she necessarily 
incurred the medical expenses because of injuries resulting from the defendant's 
negligence, and that the charges were reasonable for services of that nature. 
See North Chicago Street Ry. Co. v. Cotton, 140 Ill. 486, 498, 29 N.E. 899, 902 (1892); Wicks v. Cuneo-Henneberry Co., 319 Ill. 344, 349, 150 N.E. 276, 279 (1925).
When evidence is admitted, through testimony or otherwise, 
that a medical bill was for treatment rendered and that the bill has been paid, 
the bill is prima facie reasonable. Flynn v. Cusentino, 59 
Ill. App. 3d 262, 266, 375 N.E.2d 433, 436 (1978). A party seeking the admission 
into evidence of a bill that has not been paid can establish reasonableness by 
introducing the testimony of a person having knowledge of the services rendered 
and the usual and customary charges for such services. Once the witness is shown 
to possess the requisite knowledge, the reasonableness requirement necessary for 
admission is satisfied if the witness testifies that the bills are fair and 
reasonable. Diaz v. Chicago Transit Authority, 174 Ill. App. 3d 396, 
528 N.E.2d 398 (1988).
The prima facie reasonableness of a paid bill can 
be traced to the enduring principle that the free and voluntary payment of a 
charge for a service by a consumer is presumptive evidence of the reasonable or 
fair market value of that service. See Wicks, 319 Ill.  at 349, 150 N.E. 
at 279; Lanquist v. City of Chicago, 200 Ill. 69, 73-74, 65 N.E. 681, 
683 (1902). The premise is that a consumer will not willingly pay an 
unreasonable or unusual charge for a service. When a bill has been paid, there 
is little reason to suspect that the charge is collusive or speculative. The 
defendant may rebut the prima facie reasonableness of a medical expense 
by presenting proper evidence casting suspicion upon the transaction. It must be 
emphasized that offering a paid bill or the testimony of a knowledgeable witness 
that a bill is fair and reasonable merely satisfies the requirement to prove 
reasonableness. The proponent must also present evidence that the charges were 
necessarily incurred because of injuries caused by the defendant's negligence.
Cotton, 140 Ill.  at 498-99, 29 N.E.  at 902. Only then have the 
evidentiary requirements for admission into evidence been satisfied. Moreover, 
it is axiomatic that merely satisfying the minimum requirements for the 
admission of a bill into evidence does not conclusively establish that the 
amount of the bill in its entirety must be awarded to the plaintiff. The 
admission of the bill into evidence simply allows the jury to consider 
whether to award none, part, or all of the bill as damages." (Emphasis in 
original.) Baker v. Hutson, 333 Ill. App. 3d 486, 493-94 (2002).
Accord 11 Ill. Jur. Personal Injury & Torts §5:22 
(2002).
Applying these principles to the present case, plaintiff 
cannot make a prima facie case of reasonableness based on the bill 
alone, because she cannot truthfully testify that the total billed amount has 
been paid. Instead, she must establish the reasonable cost by other means-just 
as she would have to do if the services had not yet been rendered, e.g., 
in the case of required future surgery, or if the bill remained unpaid. 
Defendants, of course, are free to challenge plaintiff's proof on 
cross-examination and to offer their own evidence pertaining to reasonableness 
of the charges.
Therefore, we answer the certified question as follows. 
Plaintiff may present to the jury the amount that her health-care providers 
initially billed for services rendered.

CONCLUSION
For the foregoing reasons, the judgment of the appellate 
court is affirmed; the partial summary judgment in favor of defendants, entered 
by the circuit court of Henry County, is reversed; and the cause is remanded to 
the circuit court for further proceedings.



Certified question answered;
appellate court affirmed;
circuit court reversed;
cause remanded.


CHIEF JUSTICE McMORROW, dissenting:
This appeal revolves around the following question 
certified by the trial court:
"Whether the plaintiff who was charged $19,355.25 in 
medical bills for medical services related to her injuries can present that 
amount of bills as medical expenses in the case or, whether the plaintiff shall 
be limited to presenting only $13,577.97 in medical bills to the jury because 
that is the amount that was paid by the plaintiff and Blue Cross/Blue Shield, 
who was an insurance carrier for the plaintiff and who paid the plaintiff's 
medical bills pursuant to insurance contracts at a substantially reduced rate 
with the medical providers and which the providers accepted as payment in full."

In sum, the trial court asked whether an injured plaintiff 
could recover as compensatory damages the entire amount billed by 
health-care providers for medical services, or whether a plaintiff would be 
limited to recovering the discounted amount of medical expenses actually 
paid for the medical services by the plaintiff's insurance carrier. The 
majority answers this certified question by holding that plaintiff may present 
to the jury the amount that her health-care providers initially billed for 
services rendered. Despite this holding, however, the majority finds that, 
because plaintiff's health-care providers accepted a discounted amount from her 
insurance carrier as payment in full, plaintiff "cannot truthfully testify that 
the total billed amount has been paid." Therefore, the majority concludes that 
plaintiff must establish the reasonable cost of the health-care services 
provided to her by employing unspecified "other means." The majority also holds 
that defendants are free to challenge plaintiff's proof on cross-examination and 
"to offer their own evidence pertaining to reasonableness of the charges." For 
the reasons that follow, I respectfully dissent from the opinion of the 
majority.
As stated, in this case, plaintiff received services from 
various health-care providers billed in the amount of $19,355.25. However, 
plaintiff's insurer-Blue Cross/Blue Shield (Blue Cross)-had contractual 
agreements with plaintiff's health-care providers under which many of the 
health-care services rendered were discounted. Thus, although the health-care 
providers billed plaintiff for their services in an amount in excess of $19,000, 
Blue Cross actually paid them a discounted amount of $13,577.97 as a result of 
the various contracts. This discounted amount was accepted as payment in full by 
the health-care providers, and plaintiff was not responsible for the difference.
Prior to trial, defendants filed a motion for partial 
summary judgment, seeking to limit plaintiff's claim for medical expenses to the 
amount actually paid to the health-care providers, rather than the 
amount billed to plaintiff. In opposition to the motion, plaintiff, invoking the 
protections of the collateral source rule, took the position that it was the 
amount of health-care expenses billed, rather than the amount actually 
paid, that should be presented as the measure of damages to the jury.
The circuit court disagreed with plaintiff and granted 
defendants' motion for partial summary judgment. In its written order, entered 
on June 18, 2002, the circuit court found that there was "no genuine issue as to 
whether the plaintiff or her insurance company was liable to any health care 
provider for more than $13,577.97." The circuit court also found that the 
resolution of this question was governed by our decision in Peterson v. Lou 
Bachrodt Chevrolet Co., 76 Ill. 2d 353, 363 (1979), and quoted the 
following language from Peterson as controlling: " 'The purpose of 
compensatory tort damages is to compensate; it is not the purpose of such 
damages to punish defendants or bestow a windfall upon plaintiffs. The view that 
a windfall, if any is to be enjoyed, should go to the plaintiff borders too 
closely on approval of unwarranted punitive damages, and it is a view not 
espoused by our cases.' " Based upon its interpretation of our decision in 
Peterson, the circuit court concluded that the collateral source rule did 
not require that plaintiff be allowed to present the billed amount of her 
medical expenses, and that "to allow the plaintiff to seek and recover 
$19,355.25 worth of medical damages when she was only charged for and became 
liable for $13,577.97 would only serve to punish the defendants punitively and 
provide a windfall for the plaintiff."
Plaintiff thereafter filed a "Motion for Reconsideration 
or Clarification." The circuit court denied this motion. However, finding that 
its order granting partial summary judgment to defendants involved a question of 
law as to which there is a substantial ground for difference of opinion, the 
circuit court certified the question presented in this appeal, pursuant to our 
Rule 308(a) (155 Ill. 2d R. 308(a)).
A majority of the appellate court reversed the judgment of 
the circuit court. The appellate court, stating that this case presented the 
question of "how to best harmonize the law of compensatory damages with the 
principles underlying the collateral source rule" (345 Ill. App. 3d at 808), 
held that the circuit court erred in limiting plaintiff's damages to the amount 
actually paid to the health care providers by her insurer. Rather, the appellate 
court held that the rationale underlying the collateral source rule supported 
allowing plaintiff to claim the entire amount of medical expenses billed, as 
long as "those charges are reasonable expenses of necessary medical care." 345 
Ill. App. 3d at 808.
In dissent, Justice Holdridge noted the well-settled rule 
that in order to recover medical expenses, a plaintiff must prove that he or she 
has become liable to pay the amount claimed. Thus, "[i]n view of the fact that 
the plaintiff was never liable for the amount 'discounted' by the hospital," the 
dissenting justice took the position that only the amount received from 
plaintiff's insurance company as payment in full should be fully protected by 
the collateral source rule. 345 Ill. App. 3d at 809 (Holdridge, P.J., 
dissenting). Accordingly, the dissent concluded that the difference between the 
amount billed and the amount received needed no similar protection, as plaintiff 
never incurred or became obligated for that expense.
I am in agreement with the observation of the appellate 
court that this case squarely presents the question of "how to best harmonize 
the law of compensatory damages with the principles underlying the collateral 
source rule." 345 Ill. App. 3d at 808. It is my belief that it is the tension 
between the concept of compensatory damages and the protections afforded to a 
plaintiff by the collateral source rule, as well as the restrictive 
interpretation this court has previously afforded the collateral source rule in
Peterson, that framed the issue in the circuit and appellate courts 
below, and which animated our grant of leave to appeal in this matter.
In its opinion, however, the majority avoids the questions 
presented by this appeal. The certified question is a straightforward one: can 
plaintiff seek compensation for the amount billed or the amount 
paid for medical services rendered? The majority gives an answer that 
amounts to no answer at all. The majority opinion crafts an unworkable 
analytical framework and arrives at a holding that represents a major change in 
trial practice. It is my position that such a significant alteration should be 
approached carefully, and only after this court has had the benefit of input 
from the bench and bar affected by the change. This has not occurred in the 
instant matter. The majority opinion compromises the traditional protections 
afforded by the collateral source rule and may necessitate a trial within a 
trial whenever the reasonableness of a plaintiff's medical expenses are at 
issue. Because the majority's analysis of the issues presented in this case is 
inadequate, and because the majority's holding dramatically changes trial 
practice with respect to this issue, I cannot join in the majority opinion. I 
express no opinion on the ultimate disposition of the issue presented in this 
appeal.
It is well settled under our precedent that "[t]he purpose 
of compensatory tort damages is to compensate the plaintiff for his injuries, 
not to punish defendants or bestow a windfall upon plaintiffs." Wilson v. 
The Hoffman Group, Inc., 131 Ill. 2d 308, 321 (1989); see also Best v. 
Taylor Machine Works, 179 Ill. 2d 367, 406 (1997) ("There is universal 
agreement that the compensatory goal of tort law requires that an injured 
plaintiff be made whole"); Restatement (Second) of Torts §903, Comment a 
(1979) ("compensatory damages are designed to place [a plaintiff] in a position 
substantially equivalent in a pecuniary way to that which [plaintiff] would have 
occupied had no tort been committed"). In cases, such as that at bar, where a 
plaintiff seeks to recover compensatory damages for health-care expenses, it has 
long been held that a plaintiff must prove two things: "First, that the 
[plaintiff] has paid or become liable to pay a specific amount; and second, that 
the charges made were reasonable charges for services of that nature." Wicks 
v. Cuneo-Henneberry Co., 319 Ill. 344, 349 (1925); see also Gill v. 
Foster, 232 Ill. App. 3d 768, 790-91 (1992); Barreto v. City of 
Waukegan, 133 Ill. App. 3d 119, 130 (1985); Illinois Pattern Jury 
Instructions, Civil, No. 30.06 (2005) (plaintiff is entitled to recover from a 
tortfeasor "[t]he reasonable expense of necessary medical care, treatment, and 
services received"); 11 Ill. Jur. Personal Injury & Torts §5:22 (2002).
Where a bill for health-care services has been paid, the 
payment of the bill constitutes prima facie evidence that the bill is 
reasonable. Wicks, 319 Ill.  at 349; M. Graham, Cleary & Graham's 
Handbook of Illinois Evidence §803.22 (8th ed. 2004); 1 R. Hunter, Trial 
Handbook for Illinois Lawyers, Civil §21.38 (7th ed. 1997); cf. 
Victory Memorial Hospital v. Rice, 143 Ill. App. 3d 621, 624 (1986) 
("evidence of the amount charged alone does not indicate reasonableness"). There 
are at least two rationales for this well-settled rule. First, the presumption 
that the amount of a paid bill is reasonable derives from the long-standing 
principle that the free and voluntary payment of a charge for a service by a 
consumer shows the reasonable or fair market value of that service. Wicks, 
319 Ill.  at 349; see Lanquist v. City of Chicago, 200 Ill. 69, 73-74 
(1902) (reasonableness of value may be shown by sales "made in a free and open 
market, and where a fair opportunity for competition exists"). In other words, 
"[w]hen a bill has been paid, there is little reason to suspect that the charge 
is collusive or speculative." Baker v. Hutson, 333 Ill. App. 3d 486, 
493-94 (2002); accord Spurr v. LaSalle, 385 F.2d 322, 329 (7th Cir. 
1967) (applying Illinois law, observing: "Common sense tells us it is most 
improbable that the insurer paid any medical expenses which could not have been 
shown to be reasonable in amount and necessary by reason of the injury. Actual 
payment of medical expense is prima facie evidence of reasonableness").
Second, the rule that a paid bill creates a prima 
facie case as to the reasonableness of the amount paid is premised upon 
efficient judicial administration. The rule reflects "the desire to eliminate 
unnecessary cost to the parties and inconvenience to the public by having to 
call multiple witnesses." Flynn v. Cusentino, 59 Ill. App. 3d 262, 266 
(1978); 11 Ill. Jur. Personal Injury & Torts §5:25 (2002). Indeed, "[t]o 
require otherwise would unnecessarily inconvenience both the parties, the court, 
and the public, by requiring doctors and other medical or hospital personnel to 
leave their normal duties to testify to a matter which should otherwise go 
undisputed." Flynn, 59 Ill. App. 3d at 266; 11 Ill. Jur. Personal 
Injury & Torts §5:25 (2002).
The compensatory function of tort law conflicts with the 
collateral source rule. See, e.g., M. Pollelle & B. Ottley, Illinois 
Tort Law §24.13, at 24-39 (3d ed. 2000) (the collateral source rule "runs 
counter to the compensatory damage principle of reimbursement for loss alone"); 
J. Branton, The Collateral Source Rule, 18 St. Mary's L.J. 883 (1987). 
"Under the collateral source rule, benefits received by the injured party from a 
source wholly independent of, and collateral to, the tortfeasor will not 
diminish damages otherwise recoverable from the tortfeasor." Wilson v. The 
Hoffman Group, Inc., 131 Ill. 2d 308, 320 (1989); see also Bernier v. 
Burris, 113 Ill. 2d 219, 242 (1986); 15 Ill. L. & Prac. Damages 
§40 (2000). The collateral source rule is premised upon the public policy that a 
benefit that is directed to the injured party should not be shifted so as to 
become a windfall to the tortfeasor: "the wrongdoer should not benefit from the 
expenditures made by the injured party or take advantage of contracts or other 
relations that may exist between the injured party and third persons." 
Wilson, 131 Ill. 2d  at 320. In other words, the rule holds that any 
collateral benefits that an injured party receives do not reduce the defendant's 
liability in tort, even though they decrease the plaintiff's loss.
As stated, a plaintiff is considered to be fully 
compensated when he or she is restored to the position occupied before the tort 
occurred. Generally, if a plaintiff receives compensation from a third party not 
connected to the defendant, those benefits are used to reduce the tortfeasor's 
total damages. 22 Am. Jur. 2d Damages §566 (1988). The collateral 
source rule changes this general principle of compensatory damages to the extent 
that the amount of the tortfeasor's liability is not reduced by the compensation 
received by plaintiff from other sources.
The majority correctly observes that the collateral source 
rule is often applied where a defendant seeks to reduce damages because the 
plaintiff has received insurance benefits that in part or in whole indemnify the 
plaintiff for the loss. Generally, damages recovered by the plaintiff from the 
defendant are not decreased by the amount the plaintiff received from insurance 
proceeds, so long as the defendant did not contribute to the payment of the 
insurance premiums:
"If the plaintiff was himself responsible for the benefit, 
as by maintaining his own insurance or by making advantageous employment 
arrangements, the law allows him to keep it for himself. If the benefit was a 
gift to the plaintiff from a third party or established for him by law, he 
should not be deprived of the advantage that it confers. The law does not 
differentiate between the nature of the benefits, so long as they did not come 
from the defendant or a person acting for him." Restatement (Second) of Torts 
§920A, Comment b, at 514 (1979).
The majority opinion, however, fails to acknowledge that 
Illinois departs from other jurisdictions with respect to application of the 
collateral source rule. In its opinion, the majority omits any discussion with 
respect to our decision in Peterson v. Lou Bachrodt Chevrolet Co., 76 Ill. 2d 353 (1979), wherein this court limited the operation of the collateral 
source rule. See Muranyi v. Turn Verein Frisch-Auf, 308 Ill. App. 3d 
213, 216 (1999) (Peterson "rejected th[e] unconditional version of the 
collateral source rule"); see also 11 Ill. Jur. Personal Injury & Torts 
§5:62 (2002); M. Pollelle & B. Ottley, Illinois Tort Law §24.13 (3d ed. 2000).
In Peterson, this court denied the plaintiff 
recovery for the value of medical services a charitable hospital had rendered to 
his son free of charge, reasoning that the policy behind the collateral source 
rule is not applicable "if the plaintiff has incurred no expense, obligation, or 
liability in obtaining the services for which he seeks compensation." 
Peterson, 76 Ill. 2d  at 362. In arriving at this holding, this court stated 
that "[w]e refuse to join those courts which, without consideration of the facts 
of each case, blindly adhere to 'the collateral source rule, permitting the 
plaintiff to exceed compensatory limits in the interest of insuring an impact 
upon the defendant.' " Peterson, 76 Ill. 2d  at 363, quoting Note, 
Unreason in the Law of Damages: The Collateral Source Rule, 77 Harv. L. 
Rev. 741, 742 (1964). The Peterson court highlighted the tension 
between the concept of compensatory damages and the collateral source rule, 
observing that the purpose of compensatory damages is to "compensate," and not 
"to punish defendants or bestow a windfall upon plaintiffs." Peterson, 
76 Ill. 2d  at 363. Accordingly, this court held that "[t]he view that a 
windfall, if any is to be enjoyed, should go to the plaintiff [citation] borders 
too closely on approval of unwarranted punitive damages, and it is a view not 
espoused by our cases." Peterson, 76 Ill. 2d  at 363.
With our decision in Peterson, Illinois became 
one of the few jurisdictions to apply a limited version of the collateral source 
rule to exclude gratuities from the operation of the rule. See 2 D. Dobbs, 
Remedies §8.6(3), at 494 (2d ed. 1993) (recognizing Illinois as one of a few 
jurisdictions omitting gratuities from the collateral source rule and noting 
that in this view "the collateral source rule applies only to benefits the 
plaintiff has obtained by purchase or his own efforts"); 4 F. Harper, F. James & 
O. Gray, Torts §25.9, at 561 n.8 (2d ed. 1986) (listing Illinois as one of a few 
jurisdictions excluding gratuities from the collateral source rule); 22 Am. Jur. 
2d Damages §397, at 359-60 (2003) (same).
It is against the backdrop of our restrictive 
interpretation of the collateral source rule that the trial court certified the 
question presented in the instant appeal. In its order granting partial summary 
judgment to defendants, the circuit court found our decision in Peterson 
to be controlling, and quoted our holding from that decision that the purpose of 
compensatory damages is to compensate a plaintiff and not to punish defendants 
or bestow a windfall upon a plaintiff. It was based upon this language in 
Peterson that the circuit court held that because plaintiff in the matter 
at bar was only liable for the discounted amount of her medical expenses, this 
discounted amount was the appropriate measure of her medical expense damages. 
The record further reveals that it was on this issue that the circuit court 
found that there was substantial ground for difference of opinion, and certified 
the question for appeal.
Upon reviewing the judgment of the circuit court, the 
appellate court addressed two issues. First, the appellate court majority held 
that plaintiff was entitled to recover medical expense damages in an amount 
greater than the amount she was obligated to pay, and any additional amount 
would not be a "windfall" because the difference is a benefit of plaintiff's 
contract with her insurer, not one bestowed upon her by defendants. 345 Ill. 
App. 3d at 806. Second, a majority of the appellate court panel rejected 
defendants' assertion that the difference between the amount charged and the 
amount paid is "illusory" and not subject to the collateral source rule. The 
appellate majority held that limiting plaintiff's damages to the amount actually 
paid as a result of her insurance contract violated the purpose of the 
collateral source rule because such a limitation would confer a significant 
benefit of plaintiff's insurance coverage upon defendants. 345 Ill. App. 3d at 
807.
Before this court, the parties engage in extensive 
argument with respect to the relationship between compensatory damages and the 
collateral source rule, as well as the extent of the limitation of the 
collateral source rule in our jurisdiction. According to defendants, although 
the collateral source rule affords protection to medical payments made under 
plaintiff's insurance policy, this protection is not without limits. Defendants 
contend that because the amount of plaintiff's medical expenses is reduced by 
the amount of the discount, and because neither plaintiff nor anyone else has 
liability for the discounted amount, the collateral source rule should not apply 
to protect the discounted amount. According to defendants, under circumstances 
such as those at bar, application of the collateral source rule serves to 
protect an unjustified windfall to plaintiff. In addition, defendants argue that 
allowing plaintiff to recover a compensatory award in excess of the medical 
expenses actually incurred is similar to imposing an impermissible penalty upon 
them.
In response, plaintiff contends that the usual rule that a 
paid bill is prima facie evidence of the reasonableness of the expenses 
does not apply here because the collateral source rule prevents the jury from 
learning any information with respect to plaintiff's procurement of insurance, 
including any discounting of medical expenses attributable to agreements between 
the insurance companies and plaintiff's medical care providers. Therefore, 
plaintiff argues, the nondiscounted amount billed by the medical-care providers 
is the appropriate measure of damages. Plaintiff further contends that our 
decision in Peterson does not support defendants' arguments.
Instead of addressing the specific questions presented in 
this appeal, as framed by the circuit court in its order, the appellate court in 
its opinion, and the parties in their briefs, the majority focuses its analysis 
upon the "dual nature of the collateral source rule." Slip op. at 5. The 
majority explains that the collateral source rule has a substantive and 
evidentiary component, and holds that the certified question in this case 
implicates only the evidentiary component of the collateral source rule. 
According to the majority, the "only relevant question in the litigation between 
plaintiff and defendants is the reasonable value of the services rendered" (slip 
op. at 7), and that the certified question merely asks whether certain evidence 
is admissible in such cases. By framing the question presented in this way, the 
majority avoids addressing the circuit court's order granting partial summary 
judgment to defendants which relies upon-and quotes from-our decision in 
Peterson, and which directly implicates the application of the collateral 
source rule to the facts presented at bar.
The majority opinion then proceeds to analyze what it 
construes to be the question presented by this appeal. This analysis, and the 
resultant holding, consist of a single paragraph:
"[P]laintiff cannot make a prima facie case of 
reasonableness based on the bill alone, because she cannot truthfully testify 
that the total billed amount has been paid. Instead, she must establish the 
reasonable cost by other means-just as she would have to do if the services had 
not yet been rendered, e.g., in the case of required future surgery, or 
if the bill remained unpaid. Defendants, of course, are free to challenge 
plaintiff's proof on cross-examination and to offer their own evidence 
pertaining to reasonableness of the charges." Slip op. at 8.
The majority then reiterates its holding by stating that 
"[p]lainitff may present to the jury the amount that her health-care providers 
initially billed for services rendered." Slip op. at 8.
What does this mean? Although the majority answers the 
certified question by ruling that plaintiff may present the billed 
amount to the jury as the appropriate measure of damages, the majority then 
contradicts this statement by holding that plaintiff cannot make a prima 
facie case of reasonableness based upon the bill alone, as plaintiff 
"cannot truthfully testify that the total billed amount has been paid." Slip op. 
at 8. The majority also holds that plaintiff must establish the reasonable cost 
of her medical expenses "by other means," but those "other means" remain 
unspecified. Further, the majority would allow defendants "to challenge 
plaintiff's proof on cross-examination and to offer their own evidence 
pertaining to the reasonableness of the charges," but provides no insight as to 
what this evidence might be. Slip op. at 8.
Several questions and concerns arise from the majority's 
analysis and holding in this case. First, what is to become of the well-settled 
rule in this state that a plaintiff establishes a prima facie case 
that a medical expense is reasonable if that expense has been paid? Under 
ordinary rules of evidence, the paid bill would be the appropriate 
measure of damages. Yet, for unexplained reasons this is not the answer in the 
matter at bar.
On the other hand, the majority appears to implicitly 
acknowledge that "evidence of the amount charged alone does not indicate 
reasonableness." Victory Memorial Hospital v. Rice, 143 Ill. App. 3d 
621, 624 (1986). Thus, because plaintiff's charged bill was not 
paid, the majority admits that plaintiff cannot use the charged bill to 
show that the expenses were prima facie reasonable. The majority states 
that plaintiff must establish reasonable costs by unspecified "other means," yet 
fails to elaborate on exactly what plaintiff may do.
It is well settled that "[w]here a hospital or medical 
bill is unpaid, the plaintiff has the burden of proving that the charges are 
reasonable, as well as that he or she has become liable to pay those charges. If 
no evidence as to a bill's reasonableness is introduced, the bill is not 
admissible into evidence." 11 Ill. Jur. Personal Injury & Torts §5:26 
(2002); see also Spurr v. LaSalle, 385 F.2d 322, 329 (7th Cir. 1967) 
(applying Illinois law, observing: "Common sense tells us it is most improbable 
that the insurer paid any medical expenses which could not have been shown to be 
reasonable in amount and necessary by reason of the injury. Actual payment of 
medical expense is prima facie evidence of reasonableness").
The majority's opinion will likely result in the parties 
conducting a trial within a trial on the issue of the reasonableness of a 
plaintiff's medical expenses. Instead of the current practice wherein 
stipulations are often made between the parties with respect to the 
reasonableness of medical bills, the parties will be forced to gather 
information about the billing practices of every health-care provider in the 
case. In addition, witnesses familiar with the billing practices of each 
provider will have to be called to testify with respect to each amount charged, 
and the reasonableness of that amount for the specific procedure performed, 
given the provider's experience and reputation and the relevant medical 
community. This evidentiary process directly contravenes the rationales for 
holding that a paid bill constitutes prima facie evidence that 
the bill is reasonable: that a free and voluntary payment of a charge shows the 
reasonable value of that service, and that it comports with efficient judicial 
administration by eliminating unnecessary cost and inconvenience to the parties 
by having to call multiple witnesses. Presenting testimony with respect to 
billing practices and procedures will no doubt add considerable time and expense 
for the court and the litigants without advancing the goals of recovery for the 
plaintiff.
In addition, I note that the majority holds that 
defendants may challenge plaintiff's proof on cross-examination, or "offer their 
own evidence pertaining to the reasonableness of the charges." Slip op. at 8. 
Again, no guidance is offered by the majority to the bench and bar on what may 
be introduced.
It is my belief that the evidentiary procedure required by 
the majority will be unworkable. A possible scenario may unfold as follows. 
Plaintiff, with supporting testimony from witnesses familiar with the billing 
practices of the provider, will present the amount initially billed by her 
health-care providers as the reasonable measure of her damages to the jury. 
Defendant, attempting to show that the billed amount does not reflect the 
reasonable value of the services provided, will cross-examine plaintiff's 
witnesses and question whether the amounts charged by the provider are the 
amounts actually paid by the patient for the services rendered. It is very 
likely that plaintiff's counsel would immediately object to such a line of 
questioning on the basis that these questions would ultimately reveal that 
plaintiff received payment from a collateral source-her insurance company-and 
therefore violate the collateral source rule. Thus, under such a scenario, 
defendants may very well have no means of challenging the reasonableness of the 
billed amount of medical services as the measure of plaintiff's damages.
If, by its opinion, the majority is signaling that such a 
line of questioning by defendants is acceptable under these facts, then I point 
out that the majority is compromising the protections of the collateral source 
rule-the very rule that it is claiming to support. The majority emphasizes-and I 
agree-that the collateral source rule prevents evidence that a medical bill was 
paid by insurance. Yet, under the majority's opinion, if evidence is proffered 
that health-care providers initially charged plaintiff a certain amount and 
later accepted a reduced amount as payment in full, the jury may be confused and 
left to create an explanation. It may be that jurors would deduce the presence 
of insurance. Allowing evidence of both the billed and discounted amounts 
compromises the collateral source rule, confuses the jury, and potentially 
prejudices both parties in the case. Each jury will resolve the issue 
differently, leading to inconsistency wherein similarly situated parties will be 
treated differently. It is my belief that the majority's opinion will only 
further confuse the bench and bar on these already confusing issues.
The instant appeal presents a number of important legal 
principles and public policy concerns that require thoughtful analysis by this 
court. The last time this court spoke on the tension between the concept of 
compensatory damages and the operation of the collateral source rule was in 
1979-over 25 years ago-in Peterson. In that case, we delivered several 
strong statements with respect to this tension, and, as a result, became one of 
the few jurisdictions to limit the scope of the collateral source rule. Since 
1979, the medical marketplace has drastically changed. For example, today, the 
discounting of medical bills is a common practice in the health-care field. 
Mitchell v. Hayes, 72 F. Supp. 2d 635, 637 (W.D. Va. 1999); see M. Beard,
The Impact of Changes in Health Care Provider Reimbursement Systems on the 
Recovery of Damages for Medical Expenses in Personal Injury Suits, 21 Am. 
J. Trial Advoc. 453 (1998). I believe that this case presents this court with 
the important opportunity to decide whether to specifically delineate the 
limitations previously imposed on the collateral source rule in Peterson, 
or to hold that Illinois will now join the majority of jurisdictions that apply 
a pure collateral source rule. Indeed, if Illinois were to join the majority of 
other states on this issue, there would be no dispute with respect to whether 
the charged or the paid bill would be the appropriate measure 
of damages-it would be clear that the charged bill would be the only 
evidence to be admissible.
I wish to make abundantly clear that I do not suggest 
which alternative this court should adopt. I note, however, that a clear-cut 
rule benefits the parties and the court because it limits discovery, eliminates 
unneeded confusion and complexity in trials, promotes predictability and 
conserves scarce judicial resources. The court should take this opportunity to 
clarify the scope and extent of the collateral source rule in Illinois. The 
majority omits discussion of Peterson and the unique way that the 
collateral source rule is treated in this state, and has, instead, relied on 
general treatise or hornbook quotations, which speak to the general 
treatment of the collateral source rule, rather than to the unique way that it 
has developed in Illinois.
In sum, unlike the majority, I would address the question 
presented by this appeal, which involves an examination of this court's opinion 
in Peterson and the conflict between the principles of compensatory 
damages and the collateral source rule. In avoiding the important issues 
squarely presented by this appeal, the majority creates a new evidentiary 
procedure that represents a major change in trial practice, and which appears to 
be unworkable. For these reasons, I respectfully dissent.