Title: Joseph Leitinger v. Van Buren Management
Citation: 2007 WI 84
Docket Number: 2005AP002030
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: July 3, 2007

2007 WI 84 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2005AP2030 
COMPLETE TITLE: 
 
 
Joseph Leitinger, Bonnie Leitinger and Services 
Unlimited, 
          Plaintiffs-Appellants, 
     v. 
DBart, Inc., d/b/a Barthenheier Construction, 
Inc., and Heritage Mutual Insurance Company, 
n/k/a Acuity, a mutual insurance company, 
          Defendants-Respondents-Petitioners, 
 
Van Buren Management, Inc., American Economy 
Insurance Company and Compcare Health Services 
Insurance Corp., 
          Defendants. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2006 WI App 146 
Reported at:  295 Wis. 2d 372, 720 N.W.2d 152 
(Ct. App. 2006-Published) 
 
 
OPINION FILED: 
July 3, 2007   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
March 2, 2007   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Jeffrey A. Kremers   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
   
 
DISSENTED: 
ROGGENSACK, J., dissents (opinion filed). 
PROSSER, J., joins the dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Arthur P. Simpson, Christine M. Rice, and Simpson & 
Deardorff, S.C., Milwaukee, and oral argument by Arthur P. 
Simpson. 
 
For the plaintiffs-appellants there was a brief by Timothy 
J. Aiken, James C. Gallanis, and Aiken & Scoptur, S.C., 
Milwaukee, and oral argument by Timothy J. Aiken. 
 
 
 
2 
An amicus curiae brief was filed by Martha H. Heidt, M H 
Heidt Law Office, Mondovi, on behalf of the Wisconsin Academy of 
Trial Lawyers. 
 
 
2007 WI 84
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
 
No.  2005AP2030  
(L.C. No. 
2003CV6200) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Joseph Leitinger, Bonnie Leitinger and Services 
Unlimited, 
 
          Plaintiffs-Appellants, 
 
     v. 
 
DBart, Inc., d/b/a Barthenheier Construction, 
Inc., and Heritage Mutual Insurance Company, 
n/k/a Acuity, a mutual insurance company, 
 
          Defendants-Respondents-Petitioners, 
 
Van Buren Management, Inc., American Economy 
Insurance Company and Compcare Health Services 
Insurance Corp., 
 
          Defendants. 
 
 
 
FILED 
 
JUL 3, 2007 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
SHIRLEY S. ABRAHAMSON, C.J.   This is a review of a 
published decision of the court of appeals1 reversing a judgment 
                                                 
1 Leitinger v. Van Buren Mgmt., Inc., 2006 WI App 146, 295 
Wis. 2d 372, 720 N.W.2d 152. 
No. 
2005AP2030   
 
2 
 
of the Circuit Court for Milwaukee County, Jeffrey A. Kremers, 
Judge.   
¶2 
Joseph Leitinger and Bonnie Leitinger, his wife, and 
Services Unlimited2 (collectively referred to as Leitinger) sued 
several defendants, collectively referred to as Acuity,3 for 
damages from a personal injury Joseph Leitinger suffered while 
employed at a construction site.  
¶3 
The parties disputed the reasonable value of Joseph 
Leitinger's medical treatment in this personal injury action.  
The health care provider billed Joseph Leitinger $154,818.51 for 
the treatment rendered, but as a result of negotiated discounts 
the health care provider accepted $111,394.73 from Joseph 
Leitinger's health insurance company.  The difference between 
the amount billed and the amount actually paid by Leitinger's 
health insurance company is $43,424.78.  Leitinger's health 
insurance company protected its subrogation rights in the 
present case.  
¶4 
The issue of law presented on review is whether, in 
light of the collateral source rule, evidence of the amount 
                                                 
2 Joseph Leitinger is the owner of and provides general 
contractor services through Services Unlimited. 
3 The 
defendants 
are 
DBart, 
Inc. 
d/b/a 
Barthenheier 
Construction, Inc. (a construction contractor), Heritage Mutual 
Insurance 
Co. 
n/k/a 
Acuity, 
A 
Mutual 
Insurance 
Company 
(liability insurer for DBart, Inc.), Van Buren Management, Inc. 
(owner of the property upon which Leitinger's injury occurred), 
American Economy Insurance Company (liability insurer for Van 
Buren Management, Inc.), and Compcare Health Services Insurance 
Corp. (Leitinger's health insurance company).  
No. 
2005AP2030   
 
3 
 
actually paid by a plaintiff's health insurance company for the 
plaintiff's medical treatment is admissible in a personal injury 
action for the purpose of establishing the reasonable value of 
the medical treatment rendered.  
¶5 
Leitinger argues that the amount actually paid by his 
health insurance company for his medical treatment is evidence 
of a collateral source payment and is thus inadmissible evidence 
under the collateral source rule.  In contrast, Acuity contends 
that evidence of the amount actually paid by Leitinger's 
insurance company for medical treatment rendered to Leitinger is 
admissible to prove the reasonable value of the medical 
treatment in this personal injury action when the value of the 
medical treatment is disputed.  
¶6 
The circuit court ruled that the evidence of the 
amount actually paid for the medical treatment rendered was 
relevant to the determination of the reasonable value of the 
medical treatment and was therefore admissible.  The court of 
appeals reversed the judgment of the circuit court, concluding 
that the collateral source rule prohibits parties in a personal 
injury action from introducing evidence of the amount actually 
paid by the injured person's health insurance company, that is, 
a collateral source, for medical treatment to prove the 
reasonable value of the treatment.  
¶7 
For the reasons set forth, we affirm the decision of 
the court of appeals.  We hold, as did the court of appeals, 
that the collateral source rule prohibits parties in a personal 
injury action from introducing evidence of the amount actually 
No. 
2005AP2030   
 
4 
 
paid by the injured person's health insurance company, a 
collateral source, for medical treatment rendered to prove the 
reasonable value of the medical treatment.  We therefore remand 
this cause to the circuit court for proceedings consistent with 
this decision and the parties' stipulations. 
I 
¶8 
The facts in this case are not in dispute for purposes 
of this review.  In August 2001, Joseph Leitinger was employed 
as a contractor by Van Buren Management.  While at work on a 
construction site operated by DBart, Joseph Leitinger crashed 
through the floor, falling 30 feet, sustaining serious injuries.  
Leitinger incurred extensive medical expenses, which were paid 
primarily by his health insurance company, Compcare Health 
Services Insurance Corporation.   
¶9 
Leitinger's complaint alleged negligence and safe 
workplace violations against Van Buren Management, DBart, and 
their liability insurers.  In a special verdict, the jury found 
DBart 67% causally negligent and Joseph Leitinger 33% causally 
negligent.  Leitinger was awarded $596,881.68.4   
¶10 The parties' liability is not at issue here.  The sole 
dispute involves the appropriate amount Leitinger can recover as 
damages from the tortfeasor for the cost of Leintinger's medical 
treatment.  In other words, what damages may Leitinger recover 
                                                 
4 The jury award includes the reasonable value of medical 
treatment, past and future loss of earning capacity, and past 
and future pain and suffering.  Only the reasonable value of 
Leitinger's medical treatment is before this court on review.  
Acuity does not dispute the other parts of the jury award. 
No. 
2005AP2030   
 
5 
 
from Acuity, the tortfeasor's insurance company, which agreed to 
stand in the shoes of the tortfeasor and pay whatever sums for 
which the tortfeasor was liable?  
¶11 Refusing to apply the collateral source rule, the 
circuit court denied Leitinger's motion in limine to exclude 
evidence of the amount actually paid by Leitinger's health 
insurance company for his medical treatment.  The circuit court 
allowed the parties to proffer as evidence both the amount 
billed by the medical service provider and the amount paid by 
Leitinger's health insurance company to prove the reasonable 
value of the medical treatment rendered.  The circuit court also 
allowed the parties to present expert testimony about the 
reasonable value of the medical services.5 
¶12 The parties stipulated, for purposes of trial, (1) 
that the amount Leitinger's health insurance company actually 
paid for the medical treatment rendered to Leitinger, not the 
amount billed to Leitinger, was the reasonable value of the 
medical treatment, and (2) that Leitinger reserved the right to 
appeal the circuit court ruling that the amount actually paid by 
his health insurance company for medical treatment rendered to 
him was admissible evidence of the reasonable value of the 
treatment.  As a result of this stipulation, the jury was 
presented only with evidence of the amount actually paid for the 
medical treatment rendered.  
                                                 
5 Neither party, however, presented an expert witness to 
testify about the reasonableness of the amounts billed or the 
amounts paid. 
No. 
2005AP2030   
 
6 
 
¶13 Leitinger was awarded $111,394.73 for his medical 
expenses, which is the amount Leitinger's health insurance 
company actually paid for the medical treatment. 
¶14 After the jury returned its verdict, Leitinger renewed 
his motion before the circuit court to exclude evidence of the 
amount actually paid for his medical treatment, relying on the 
collateral source rule.  Specifically, Leitinger requested "an 
order by the [Circuit] Court to order a new trial on the issue 
of medical bills with the Collateral Source Rule enforced; i.e. 
evidence of the amount paid by the medical insurer excluded 
pursuant to Ellsworth6 and Kauffman [sic]."7   
¶15 The circuit court denied Leitinger's motion for a new 
trial and affirmed its prior evidentiary ruling.  The circuit 
court reasoned as follows:  "So, the reasonable value of the 
services provided to be determined, given that the reasonable 
value of the services has to be determined by the jury, seems to 
me that one thing they can consider was in fact what was paid 
and accepted by the medical providers as a potential, not 
binding, not final, but a potential measure of the reasonable 
value of the services." 
¶16 The parties then further modified their stipulation.  
Acuity agreed that if evidence of the amount actually paid by 
Leitinger's health insurance company is inadmissible, then the 
                                                 
6 Ellsworth v. Schelbrock, 2000 WI 63, 235 Wis. 2d 678, 611 
N.W.2d 764. 
7 Koffman v. Leichtfuss, 2001 WI 111, 246 Wis. 2d 31, 630 
N.W.2d 201. 
No. 
2005AP2030   
 
7 
 
entire amount billed is the reasonable value of the medical 
treatment rendered.  Thus, if Leitinger wins his appeal, he will 
receive $43,424.78, which is the difference between the amount 
billed by the medical service provider and the amount actually 
paid by Leitinger's health insurance company.8 
¶17 Relying on this court's recent decision in Koffman v. 
Leichtfuss, 2001 WI 111, 246 Wis. 2d 31, 630 N.W.2d 201, the 
court of appeals concluded that "the fact finder should not be 
allowed to consider 'payments made by outside sources on the 
plaintiff's behalf, including insurance payments.'"9  Adhering to 
the parties' stipulations, the court of appeals added to 
Leitinger's jury award the difference between the amount the 
medical 
service 
provider 
billed 
and 
the 
amount 
paid 
by 
Leitinger's health insurance company. 
II 
¶18 We ordinarily review a circuit court's ruling on the 
admission of evidence to determine whether the circuit court 
erroneously exercised its discretion.10  A reviewing court will 
affirm a circuit court's exercise of discretion if the circuit 
court 
applied 
the 
proper standard of law and, using a 
demonstrated rational process, reached a conclusion that a 
reasonable court could reach.   
                                                 
8 Acuity's brief asserts that the parties agreed to this 
stipulation to "streamline" the trial, to save their clients 
money, and to save the court time.   
9 Leitinger, 295 Wis. 2d 372, ¶17. 
10 State v. Muckerheide, 2007 WI 5, ¶17, ___ Wis. 2d ___, 
725 N.W.2d 930. 
No. 
2005AP2030   
 
8 
 
¶19 If a circuit court exercises its discretion upon an 
error of law, the circuit court has erroneously exercised its 
discretion.11  The question of law embedded in the circuit 
court's decision to admit the evidence at issue is the 
interpretation and application of the collateral source rule. 
More specifically, the circuit court was called upon to 
determine whether, as a matter of law, the collateral source 
rules operates to bar evidence of collateral source payments in 
a personal injury action when offered for the purpose of 
determining the reasonable value of the medical treatment 
rendered.   
¶20 The question presented in the instant case is not 
whether the damages are to be limited to or reduced by the 
amount actually paid for medical treatment rendered but rather 
whether, in determining the reasonable value of the treatment, 
the fact-finder may consider the amount actually paid by a 
collateral source, which in the present case is the injured 
person's health insurance company.  This court decides a 
question of law independently of the circuit court and the court 
of appeals but benefiting from their analyses.12 
                                                 
11 State v. Hutnik, 39 Wis. 2d 754, 763, 159 N.W.2d 733 
(1968) ("If a judge bases the exercise of his discretion upon an 
error of law, his conduct is beyond the limits of discretion."), 
quoted in Kenosha Hosp. & Med. Ctr. v. Garcia, 2004 WI 105, ¶15, 
274 Wis. 2d 338, 683 N.W.2d 425. 
12 Estate of Rille v. Physicians Ins. Co., 2007 WI 36, ¶39, 
___ Wis. 2d ___, 728 N.W.2d 693. 
No. 
2005AP2030   
 
9 
 
III 
¶21 The issue presented requires us to explore three 
areas: (A) the proper measure of damages for medical treatment 
rendered in a personal injury action; (B) the collateral source 
rule and the public policy considerations underlying it; and (C) 
prior decisions interpreting and applying the collateral source 
rule.  
A 
¶22 At issue in this case is the appropriate measure of 
damages Leitinger may recover for his medical expenses.  We 
examine the traditional, oft-stated rule for the measure of 
damages to be recovered for medical expenses and apply this rule 
in the present case.  
¶23 The proper measure of damages for medical treatment 
rendered in a personal injury action is the reasonable value of 
the medical treatment reasonably required by the injury.13  The 
court has explained that "while the actual amount paid for 
medical services may reflect the reasonable value of the 
treatment rendered, the focus is on the reasonable value, not 
the actual charge.  In other words, '"this is a recovery for 
their value and not for the expenditures actually made or 
obligations incurred."'"14  "'The value of medical services made 
                                                 
13 Koffman, 246 Wis. 2d 31, ¶¶25, 27. In this case, there is 
no dispute regarding the necessity of Leitinger's medical 
treatment.  At issue is only the reasonable value.   
14 Koffman, 246 Wis. 2d 31, ¶27 (quoting McLaughlin v. Chi., 
Milwaukee, St. Paul & Pacific R.R. Co., 31 Wis. 2d 378, 395 
(quoting 22 Am. Jur. 2d Damages § 207 (1965))). 
No. 
2005AP2030   
 
10 
 
necessary by the tort can ordinarily be recovered although they 
have 
created 
no 
liability 
or 
expense 
to 
the 
injured 
person . . . .'"15  For this traditional statement of the damages 
to which an injured person is entitled for necessary medical 
treatment, see, e.g.,  Koffman v. Leichtfuss, 2001 WI 111, ¶27, 
246 Wis. 2d 31, 630 N.W.2d 201; Thoreson v. Milwaukee & Suburban 
Transp. Corp., 56 Wis. 2d 231, 243, 201 N.W.2d 745 (1972); 
McLaughlin v. Chicago, Milwaukee, St. Paul & Pacific Ry. Co., 31 
Wis. 2d 378, 395, 143 N.W.2d 32 (1966) (quoting 22 Am. Jur. 2d 
Damages § 207 (1965)). 
¶24 Thus, the fact-finder determines the reasonable value 
of the medical treatment rendered, which is not necessarily the 
amount actually paid or the amount billed for the treatment.16   
B 
¶25 How the fact-finder will evaluate the reasonable value 
of Leitinger's medical expenses depends in part on how the 
                                                                                                                                                             
Wis JI——Civil 1756 (2007) states that a plaintiff should be 
compensated for "the sum of money . . . [that] has reasonably 
and 
necessarily 
been 
incurred 
from 
the 
date 
of 
the 
accident . . . for the care  and treatment of the injuries 
sustained by (plaintiff) as a result of the accident."   
15 Koffman, 246 Wis. 2d at 47 n.6 (quoting Restatement 
(Second) of Torts § 924 cmt. f). 
The reasonable value of the medical services is just one 
component of what makes the injured plaintiff "whole."  Other 
damages include lost wages, future lost wages, loss of earning 
capacity, etc. 
16 Koffman, 
246 
Wis. 2d 31, 
¶56 
(quoting 
Thoreson 
v. 
Milwaukee & Suburban Transp. Co., 56 Wis. 2d 231, 245, 201 
N.W.2d 745 (1971)). 
No. 
2005AP2030   
 
11 
 
collateral source rule applies to the valuation of medical 
expenses in the instant case. 
¶26 The collateral source rule is a well-established rule 
of law in Wisconsin.17  Simply put, the collateral source rule 
states that benefits an injured person receives from sources 
that have nothing to do with the tortfeasor may not be used to 
reduce the tortfeasor's liability to the injured person.  In 
other words, the tortfeasor is not given credit for payments or 
benefits conferred upon the injured person by any person other 
than the tortfeasor or someone identified with the tortfeasor 
(such as the tortfeasor's insurance company).  Thus under the 
collateral source rule, as the phrase implies, a payment by one 
who is not a tortfeasor (that is, a payment collateral to the 
tortfeasor) is treated differently from a payment by the 
tortfeasor.18 
                                                 
17 See, e.g., McLaughlin v. Chi., Milwaukee, St. Paul & 
Pacific Ry. Co., 31 Wis. 2d 378, 143 N.W.2d 32 (1966); Merz v. 
Old Republic Ins. Co., 53 Wis. 2d 47, 191 N.W.2d 876 (1971); 
Thoreson v. Milwaukee Suburban Transp. Co., 56 Wis. 2d 231, 201 
N.W.2d 745 (1971). 
18 "A payment made by a tortfeasor or a person acting for 
him to a person whom he has injured is credited against his tort 
liability . . . ."  Restatement (Second) of Torts § 920A(1) 
(1977).   
No. 
2005AP2030   
 
12 
 
                                                                                                                                                             
"Payments made to or benefits conferred on the injured 
party from other sources [than the tortfeasor or a person acting 
for him] are not credited against the tortfeasor's liability, 
although they cover all or a part of the harm for which the 
tortfeasor is liable."  Restatement (Second) Torts § 920A(2) 
(1977).  In Comment b at 514, the Restatement explains that 
"Payments made or benefits conferred by other sources are known 
as collateral-source benefits.  They do not have the effect of 
reducing the recovery against the defendant. . . . [I]t is the 
tortfeasor's responsibility to compensate for all harm that he 
causes, not confined to the net loss that the injured party 
receives."   
The general rule governing collateral source benefits has 
also been set forth as follows:  
[B]enefits received by the plaintiff from a source 
collateral to the defendant may not be used to reduce 
that defendant's liability for damages. 
1 Dan B. Dobbs, Dobbs Law of Remedies: Damages, Equity, 
Restitution § 3.8(1) at 372-73 (2d ed. 1993). 
The collateral source or collateral benefit rule 
denies the defendant any credit for payments or 
benefits conferred upon the plaintiff by any person 
other than the defendant himself or someone identified 
with him.  Payments made by the plaintiff's own 
insurer, or gratuitous benefits conferred by others, 
for example, do not reduce the defendant's tort 
liability, even though the payments operate to reduce 
the plaintiff's loss. 
2 Dan B. Dobbs, Dobbs Law of Remedies: Damages, Equity, 
Restitution § 8.6(3) at 493  (2d ed. 1993). 
2 Dan B. Dobbs, The Law of Torts § 380 at 1058 (2001), 
explains the collateral source rule as follows:  
In many cases, the injured plaintiff receives some 
compensation for injuries from sources that have 
nothing to do with the defendant.  The plaintiff's own 
insurance, job benefits, or donations by friends may 
all operate to reduce the plaintiff's loss.  The 
traditional rule is that compensation from "collateral 
sources" is none of the defendant's business and does 
not go to reduce the defendant's obligation to pay 
No. 
2005AP2030   
 
13 
 
¶27 The collateral source rule was formally adopted by 
this court in 1921 in Cunnien v. Superior Iron Works, 175 
Wis. 172, 184 N.W. 767 (1921).19  We recently summarized the 
collateral source rule in Lagerstrom v. Myrtle Werth Hospital, 
2005 WI 124, 285 Wis. 2d 1, 700 N.W.2d 201, as "help[ing] 
claimants recover the 'reasonable value of the medical services, 
without limitation to the amounts paid.'"20 
¶28 As a rule of damages, "the collateral source rule 
denies a tortfeasor credit for payments or benefits conferred 
upon the plaintiff by any person other than the tortfeasor."21  
In other words, "[t]he tortfeasor who is legally responsible for 
causing injury is not relieved of his obligation to the victim 
simply because the victim had the foresight to arrange, or good 
fortune to receive, benefits from a collateral source for 
                                                                                                                                                             
damages, either in negligence or in strict liability 
cases. 
19 In Cunnien v. Superior Iron Works Co., 175 Wis. 172 
(1921), the plaintiff was unable to work after being injured in 
an automobile accident.  Even though he received wages through a 
government-operated vocational training program, the plaintiff's 
damage award included lost earnings.  On appeal, the supreme 
court determined that the wage payments were not grounds for the 
diminution of damages owed by the tortfeasor.   
20 Lagerstrom v. Myrtle Werth Hosp., 2005 WI 124, ¶56, 285 
Wis. 2d 1, 700 N.W.2d 201 (quoting Koffman, 246 Wis. 2d 31, ¶2). 
21 Lagerstrom, 285 Wis. 2d 1, ¶32.  See also Koffman, 246 
Wis. 2d 31, ¶29 (citing Payne v. Bilco Co., 54 Wis. 2d 424, 433, 
195 N.W.2d 641 (1972) ("The collateral source rule prevents any 
payments made on the plaintiff's behalf or gratuitous benefits 
received by the plaintiff from inuring to the benefit of a 
defendant-tortfeasor."). 
No. 
2005AP2030   
 
14 
 
injuries and expenses."22  Accordingly, an award of damages 
cannot be limited to or reduced by a collateral source payment. 
¶29 The court explained in Koffman v. Leichfuss, 2001 WI 
111, 
¶¶43, 
45-46, 
246 
Wis. 2d 31, 
630 
N.W.2d 201, 
the 
relationship between the reasonable value of medical expenses, 
the rights of the injured person to recovery of the reasonable 
value of the medical expenses, and the subrogation rights of the 
injured person's health insurance company that paid the medical 
expenses:  "The creation of a subrogation interest in the 
insurer does not vest the entirety of the medical expense claim 
in the insurer.  Nor does it extinguish the insured's right to 
recover 
amounts 
above 
and 
beyond 
those 
paid 
by 
the 
insurer. . . . Thus, recoverable medical expense damages may 
exist beyond that of the amount paid by the insurer, and the 
insured is entitled to pursue those amounts. . . .  [T]he 
collateral source rule allows the plaintiff to seek recovery for 
the reasonable value of medical services without consideration 
of payments made by the plaintiff's insurer; and . . . the 
insurer's subrogation rights entitle it to recoup the amounts it 
paid on the plaintiff's behalf."23  
                                                 
22 Ellsworth, 235 Wis. 2d 678, ¶7 n.7. 
23 The Koffman case distinguished Lambert v. Wrensch, 135 
Wis. 2d 105, 399 N.W.2d 369 (1987), in which the insurer was 
barred from pursuing its subrogation rights.  In the present 
case, 
Leitinger's 
health 
insurance 
company 
pursued 
its 
subrogation rights.  
No. 
2005AP2030   
 
15 
 
¶30 The 
collateral 
source 
rule 
is 
also 
a 
rule 
of 
evidence.24  As a rule of evidence, the collateral source rule 
generally precludes introduction of evidence regarding benefits 
a plaintiff obtained from sources collateral to the tortfeasor.  
A limited exception has been recognized when the evidence is 
offered for impeachment purposes.25   
¶31 The collateral source rule, as a rule of damages and 
as a rule of evidence, is premised on certain policy goals.  The 
collateral source rule is designed to protect plaintiffs.26  Thus 
courts have allowed plaintiffs to recover the reasonable value 
of medical services even when those services have been paid for 
entirely by a collateral source and the plaintiff has made no 
                                                 
24 Fitzgerald v. Expressway Sewerage Constr., Inc., 177 F.3d 
71, 73 (1st Cir. 1999) ("Implementation of the [collateral 
source rule] gives rise to an evidentiary analogue.  This 
analogue 
customarily 
bars 
the 
introduction 
of 
proof 
of 
collateral source payments made to a plaintiff."). 
For criticism of the collateral source rule as a rule of 
evidence because it keeps information from the fact-finder, see 
Joel K. Jacobsen, The Collateral Source Rule and the Role of the 
Jury, 70 Or. L. Rev. 523 (1991).   
25 Hack v. State Farm Mut. Auto. Ins. Co., 37 Wis. 2d 1, 10, 
154 N.W.2d 320 (1967). 
26 2 Dan B. Dobbs, Dobbs Law of Remedies: Damages, Equity, 
Restitution § 8.6(3) at 495 (2d ed. 1993): 
In many instances of the collateral source rule it is 
possible to argue that the plaintiff paid for the 
benefit he is now receiving and that the defendant 
ought not benefit from the plaintiff's investment.  
Along with this, it is said that the collateral source 
rule encourages the plaintiff to protect himself by 
the purchase of insurance by making sure he reaps its 
value.  
No. 
2005AP2030   
 
16 
 
out-of-pocket payments at all.27  The collateral source rule 
protects plaintiffs by guarding against the potential misuse of 
collateral source evidence to deny the plaintiff full recovery 
to which he is entitled.28  
                                                 
27 The Ellsworth court, 235 Wis. 2d 678, ¶7, finds support 
for this argument as far back as a 1927 case, Campbell v. 
Sutliff, 193 Wis. 370, 214 N.W. 374 (1927), when the court 
recognized that any benefit resulting from the injury belongs to 
the plaintiff, not the one whose wrongful acts caused the 
injury.  See also Restatement (Second) of Torts, § 920A (1977).   
28 See, e.g., Loncar v. Gray, 28 P.3d 928, 933 (Alaska 2001) 
("The collateral source rule 'exclud[es] evidence of other 
compensation on the theory that such evidence would affect the 
jury's judgment unfavorably to the plaintiff on the issues of 
liability and damages.'"); Olariu v. Marrero, 549 S.E.2d 121, 
123 (Ga. App. 2001) (presentation to the jury of payment of 
damages by a collateral source is prohibited); Blessing v. Boy 
Scouts of Am.-Heart of Am. Council, 608 S.W.2d 484, 489 (Mo. 
App. 1980) ("Evidence which shows that an injured party has 
received insurance payments is presumed to be prejudicial upon 
the concept that a tort-feasor is not permitted to receive the 
benefit of insurance payments from another source.  To permit 
such evidence would tend to deny to an injured party recovery of 
benefits to which he or she would be entitled from some other 
source"); Proctor v. Castelletti, 911 P.2d 853, 854 (Nev. 1996) 
(adopting per se rule barring admission of evidence of a 
collateral source of payment for an injury for any purpose; 
"There is an ever-present danger that the jury will misuse the 
evidence to diminish the damage award."); Jurgensen v. Smith, 
611 N.W.2d 439, 442 (S.D. 2000) ("[A] plaintiff's collateral 
source of income 'cannot be inquired into as part of a 
defendant's case, because of the danger that the jury may be 
inclined to . . . reduce a damage award, when it learns that 
plaintiff's loss is entirely or partially covered.'") (quoted 
source omitted); Radvany v. Davis, 551 S.E.2d 347, 348 (Va. 
2001) ("[P]ayments made by a collateral source . . . are not 
admissible in evidence . . . ."); 1 Dan B. Dobbs, Dobbs Law of 
Remedies: Damages, Equity, Restitution, § 3.8(1) at 375 (2d ed. 
1993) (one justification advanced for the collateral source rule 
is that "the introduction of evidence that the plaintiff 
received benefits is inherently prejudicial to the plaintiff").  
No. 
2005AP2030   
 
17 
 
¶32 The collateral source rule ensures that the liability 
of similarly situated defendants is not dependent on the 
relative fortuity of the manner in which each plaintiff's 
medical expenses are financed.29   
¶33 The 
collateral 
source 
rule, 
like 
other 
tort 
principles, also aims at deterring a tortfeasor's negligent 
conduct.  Accordingly, it makes the tortfeasor fully responsible 
for damages caused as a result of tortious conduct.30 
¶34 Although an injured person may experience double 
recovery when the collateral source rule is applied,31 one 
                                                                                                                                                             
A minority of courts has taken the position that regardless 
of the reasonable value of the medical services rendered, the 
amount actually paid is admissible and governs recovery of 
damages.  See, e.g., Moorhead v. Crozer Chester Med. Ctr., 765 
A.2d 786 (Pa. 2001) (regardless of reasonable value, plaintiff's 
award limited to amount actually paid for medical services); 
Hanif v. Housing Auth., 246 Cal. Rptr. 192, 195 (Cal. App. 1988) 
(plaintiff generally entitled only to amount actually paid for 
medical services so long as the amount is reasonable).  
29 Koffman, 246 Wis. 2d 31, ¶31. 
30 Lagerstrom, 235 Wis. 2d 678, ¶7.  See also 3 The Law of 
Damages in Wisconsin, § 33.5 (2005).  In the present case the 
tortfeasor is insured and Acuity, the insurer, will be paying 
damages on behalf of the tortfeasor, a responsibility for which 
the insurance company contracted.  In some circumstances it may 
be against public policy to allow a tortfeasor to purchase 
insurance to cover a liability.  In the present case, liability 
insurance is not against public policy.  
31 See 
Voge 
v. 
Anderson, 
181 
Wis. 2d 726, 
732, 
512 
N.W.2d 749, 733 (1994) (allowing an injured party a double 
recovery).  See also 2 Dan B. Dobbs, Dobbs Law of Remedies: 
Damages, Equity, Restitution § 8.6(3) at 493 (2d ed. 1993).   
No. 
2005AP2030   
 
18 
 
recovery from the collateral source and a second recovery from 
the tortfeasor, the purpose of the collateral source rule is not 
to provide the injured person with a windfall, but rather to 
prevent the tortfeasor from escaping liability because a 
collateral source has compensated the injured person.  The 
injured person, not the tortfeasor, benefits from the collateral 
source.32 
C 
¶35 Two recent cases, Ellsworth v. Schelbrock, 2000 WI 63, 
235 Wis. 2d 678, 611 N.W.2d 764, and Koffman v. Leichfuss, 2001 
WI 111, 246 Wis. 2d 31, 630 N.W.2d 201, reaffirming the vitality 
of the collateral source rule, govern the present case. 
¶36 In Ellsworth, the plaintiff was severely injured in an 
automobile accident and the Medical Assistance program paid 
medical expenses at an amount less than billed.  The tortfeasor 
contended that the collateral source rule was inapplicable to 
the facts of the case and that the plaintiff's recovery for 
                                                                                                                                                             
This "double recovery" is often an unfounded fear.  "The 
collateral source rule works in conjunction with subrogation and 
reimbursement.  Plaintiffs do not necessarily actually receive a 
double recovery even if they do collect fully from both the 
tortfeasor and the collateral source, because a collateral 
source may have a right of subrogation or reimbursement." 
Lagerstrom, 285 Wis. 2d 1, ¶62 (citing Dan B. Dobbs, Dobbs Law 
of Remedies: Damages, Equity, Restitution § 8.6 at 496 (2d ed. 
1993)). 
32 Lagerstrom, 
285 
Wis. 2d 1, 
¶57 
(internal 
citations 
omitted); Voge, 181 Wis. 2d at 732.  See also 3 The Law of 
Damages in Wisconsin, § 33.5 (2005).  
No. 
2005AP2030   
 
19 
 
medical expenses should be limited to the amount paid by Medical 
Assistance. 
¶37 Applying 
the 
collateral 
source 
rule 
to 
Medical 
Assistance benefits, the Ellsworth court held that the award for 
medical damages is not limited to the amount paid by the Medical 
Assistance program.33  The court declared that a plaintiff's 
recovery for medical services is for the reasonable value of the 
services, not for the expenditures actually made or the 
obligations incurred.  
¶38 The Ellsworth court not only addressed the damages 
aspect of the collateral source rule but also explored whether 
the amounts paid by Medical Assistance for medical services were 
the reasonable value of the medical services.  The tortfeasor in 
Ellsworth argued that the amount paid by Medical Assistance 
represented, as a matter or law, the reasonable value of the 
medical services rendered to the plaintiff.  The tortfeasor 
                                                 
33 Ellsworth, 235 Wis. 2d 678, ¶22.  The Ellsworth court 
reached its ruling by analyzing the policy goals underlying the 
collateral source rule.  The court explained that the collateral 
source rule is designed to deter negligent conduct, a goal which 
is achieved by "placing the full cost of the wrongful conduct on 
the tortfeasor." Id., ¶7 (citing Am. Standard Ins. Co. v. 
Cleveland, 124 Wis. 2d 258 (Ct. App. 1985)).  "The tortfeasor 
who is legally responsible for causing injury is not relieved of 
his obligation to the victim simply because the victim had the 
foresight to arrange, or the good fortune to receive, benefits 
from a collateral source for injuries and expenses."  Id.  The 
court buttressed its reasoning by turning to a fundamental 
premise of the collateral source rule: If any party is to profit 
by the payments made by a collateral source, the person who has 
been injured, not the one whose wrongful acts caused the injury, 
should benefit.  Id. 
No. 
2005AP2030   
 
20 
 
contended that, by statute, Medical Assistance payments are to 
be 
"the 
customary, 
usual 
and 
reasonable 
demand 
for 
payment . . . which does not exceed the general level of charges 
by others who render such service or care . . . ."34  Three 
dissenting justices in Ellsworth, Justices Sykes, Wilcox, and 
Crooks, agreed that the proper measure of damages is not what 
would have been paid for the medical services (the amount 
billed) but what was actually incurred in the care and treatment 
of the plaintiff's injuries (the amount paid by Medical 
Assistance). 
The 
dissenting 
justices 
concluded 
that 
"the 
plaintiff's measure of damages in this case is that which 
Medical Assistance paid and the medical providers accepted as 
payment in full for the services rendered."35   
¶39 The 
Ellsworth 
majority 
rejected 
the 
tortfeasor's 
invitation to treat the amounts paid by Medical Assistance as 
the reasonable value of the services.36  Contrary to the 
dissenting 
justices' 
view, 
the 
majority 
ruled 
that 
the 
reasonable value of the medical services was not limited to or 
dictated by the amounts paid by Medical Assistance.  The 
Ellsworth court explained:   
The collateral source rule seeks to place upon the 
tortfeasor full responsibility for the loss he has 
caused.  [The defendant] is not entitled to reap the 
                                                 
34 Ellsworth, 235 Wis. 2d 678, ¶16 (quoting Wis. Stat. 
§ 49.43(1)). 
35 Ellsworth, 235 Wis. 2d 678, ¶31  (Sykes, J., dissenting). 
36 Id., ¶16. 
No. 
2005AP2030   
 
21 
 
benefit 
of 
Ellsworth's 
eligibility 
for 
public 
assistance or from the government's economic clout in 
the health care market place.  The reimbursement rate 
that is established by the state for health care 
providers participating in the Medical Assistance 
program is not dispositive.  Ellsworth, as the party 
claiming damages, carries the burden to prove her 
medical expenses to a reasonable certainty, by the 
greater weight of credible evidence.37   
They cautioned, however, in an footnote that "[w]e note, as did 
the court of appeals, that we are not addressing the situation 
where a provider of medical services charges less as part of an 
agreement to act as the exclusive provider of treatment as part 
of a managed care plan."38  
¶40 Justice Prosser, a member of the Ellsworth majority, 
explained the Ellsworth decision in a dissent in a subsequent 
case as follows:  "The Ellsworth majority held that the 
plaintiff was entitled to recover the higher amount, while the 
dissent concluded that the extra $250,000 reflected 'what the 
highest payor would have paid for the same medical services,' 
and thus yielded an unjustified windfall for the plaintiff."39 
¶41 One year later in Koffman, the court was again faced 
with a question about the proper application of the collateral 
source rule in determining damages for medical services rendered 
in a personal injury action.   
                                                 
37 Id., ¶17. 
38 Id., ¶6 n.1. 
39 Lagerstrom, 
285 
Wis. 2d 1, 
¶130 
(Prosser, 
J., 
dissenting). 
No. 
2005AP2030   
 
22 
 
¶42 The plaintiff in Koffman was severely injured in an 
automobile accident and required extensive medical care, the 
cost of which was paid primarily by the plaintiff's insurance 
company.  The amount billed for the medical treatment was 
$187,931.78, but because of "certain contractual relationships 
with the plaintiff's health care providers, [the plaintiff's 
insurance company] received the benefit of reduced 'contracted 
rates' and was able to satisfy its liability for the amounts 
billed by the providers with total payments of $62,324.00."40 
¶43 The parties stipulated that the reasonable value of 
the medical services was the amount billed by the health care 
providers. 
The 
tortfeasor 
nevertheless 
argued 
that 
the 
plaintiff's recovery was limited, as a matter of law, to the 
amounts paid for the medical treatment.  Agreeing with the 
tortfeasor, the circuit court reduced the jury's medical expense 
damage award to the amount actually paid. 
¶44 The Koffman court examined the implications of the 
health care system in which an insurer's liability for medical 
expenses billed to an insured is often satisfied at discounted 
rates, with the remainder written off by the health care 
provider.41  The Koffman court reasoned that the collateral 
source rule is specifically designed to prevent a discount 
received by a plaintiff's insurance company from affecting the 
plaintiff's recovery of the reasonable value of medical services 
                                                 
40 Koffman, 246 Wis. 2d 31, ¶4. 
41 Id., ¶¶21-22. 
No. 
2005AP2030   
 
23 
 
rendered.42  It concluded that the reduced rates the plaintiff's 
health insurance company negotiated with the health care 
provider did not justify an exception to the collateral source 
rule.  Rather, the collateral source rule allows the plaintiff 
to seek recovery of the reasonable value of medical services 
without consideration of gratuitous medical services rendered or 
payments made by outside sources on the plaintiff's behalf, even 
when made at reduced rates.   
¶45 The Koffman court explained as follows:  
Where the plaintiff's health care providers settle the 
plaintiff's medical bills with the plaintiff's insurer 
at reduced rates, the collateral source rule dictates 
that the defendant-tortfeasor not receive the benefit 
of the written-off amounts. The benefit of the reduced 
payments inures solely to the plaintiff. 
. . . . 
Despite the various insurance arrangements that exist 
in each case, the factor controlling a defendant's 
liability for medical expense is the reasonable value 
of the treatment rendered.43   
¶46 The Koffman court reached the following conclusions: 
1.  "[T]he plaintiff is entitled to seek recovery of 
the reasonable value of the medical services, without 
limitation to the amounts paid."44   
                                                 
42 Id., ¶32. 
43 Id., ¶¶30-31 (footnotes and citations omitted). 
The Koffman court alluded that there might be situations, 
like impeachment, where this type of collateral source evidence 
may be admissible, but did not answer this question.  Koffman, 
246 Wis. 2d 31, ¶52 n.10. 
44 Koffman, 246 Wis. 2d 31, ¶2. 
No. 
2005AP2030   
 
24 
 
2.  The collateral source rule "renders irrelevant the 
amounts of the collateral source payments . . . and 
precludes a reduction in medical expense damages based 
on those payments."45  
3.  Limiting medical expense damages to the amounts 
actually paid "is contrary to the rule of valuation of 
medical expense damages, the collateral source rule, 
and principles of subrogation . . . ."46   
4.  "Applying the collateral source rule to payments 
that 
have 
been 
reduced 
by 
contractual 
arrangements . . . assures 
that 
the 
liability 
of 
similarly situated defendants is not dependent on the 
relative 
fortuity 
of 
the 
manner 
in 
which 
each 
plaintiff's medical expenses are financed."47  
¶47 Most important to our review in the instant case, the 
Koffman court stated that evidence of the amounts actually paid 
by the plaintiff's health care insurance company is inadmissible 
in the absence of a separate basis for the relevance of this 
collateral source evidence.48   
¶48 The Ellsworth and Koffman decisions leave no doubt 
that the tortfeasor is not to benefit from the fact that the 
medical services provider was paid less by a collateral source 
than the amount billed.  If evidence of the collateral source 
payments 
were 
admissible, 
even 
for 
consideration 
of 
the 
reasonable 
value 
of 
the 
medical 
treatment 
rendered, 
a 
plaintiff's recovery of medical expenses would be affected by 
the amount actually paid by a collateral source for medical 
                                                 
45 Id., ¶32. 
46 Id., ¶47. 
47 Id., ¶31. 
48 Id., ¶52. 
No. 
2005AP2030   
 
25 
 
services. Such a "limitation" on the plaintiff's damages 
contravenes the view of the collateral source rule stated in 
Ellsworth and Koffman.   
¶49 Acuity offers several arguments why the instant case 
does not involve the collateral source rule and why Ellsworth 
and 
Koffman are inapposite.  None of the arguments is 
persuasive. 
¶50 First, Acuity contends that Ellsworth and Koffman are 
inapposite because in those cases no question was raised about 
the 
reasonable 
value 
of 
the 
medical 
treatment 
rendered.  
According to Acuity, in Ellsworth and Koffman, the court applied 
the collateral source rule to the ultimate award of damages, not 
to the question of the reasonable value of the medical 
treatment. 
 Acuity 
is wrong to conclude that the rule 
established in those cases does not extend to the present case. 
¶51 Our holdings and discussions in Ellsworth and Koffman 
set forth a proposition of law that applies to the present case: 
A plaintiff in a personal injury tort action is entitled to seek 
recovery of the reasonable value of medical treatment without 
limitation to the amount paid by a collateral source for the 
medical treatment. 
¶52 Second, Acuity argues that because it seeks to 
introduce as evidence only the amount actually paid for medical 
treatment, and not the source of these compromised payments, and 
does not seek to reduce damages by the amount of the collateral 
source payments, it is doing no violence either to the 
collateral source rule or to Ellsworth and Koffman.  The South 
No. 
2005AP2030   
 
26 
 
Carolina 
Supreme 
Court 
evaluated 
an 
argument 
similar 
to 
Acuity's.  The court declared that "[w]hile facially appealing, 
this 
argument 
ignores 
the 
reality 
that 
unexplained, 
the 
compromised 
payments 
would 
in 
fact 
confuse 
the 
jury.  
Conversely, any attempts on the part of the plaintiff to explain 
the compromised payment would necessarily lead to the existence 
of a collateral source."49  The South Carolina Supreme Court held 
that the collateral source rule is directly implicated and that 
a party cannot introduce evidence of the actual payment by a 
collateral source to challenge the reasonableness of the 
plaintiff's medical expenses. 
¶53 Although claiming that the evidence assists the fact-
finder in determining the reasonable value of the medical 
treatment and does not limit or reduce the damages, Acuity, in 
essence, is seeking to do indirectly what it cannot do directly, 
that is, it is seeking to limit Leitinger's award for expenses 
for medical treatment by introducing evidence that payment was 
made by a collateral source.  Acuity ignores the fact that the 
collateral source rule protects against the "ever-present danger 
that the jury will misuse the evidence [of collateral payments] 
to diminish the damage award."50  Acuity is trying to circumvent 
the collateral source rule. 
¶54 The collateral source rule prevents the fact-finder 
from learning about collateral source payments, even when 
                                                 
49 Covington v. George, 597 S.E.2d 142, 144-45 (S.C. 2004).   
50 Proctor v. Castelletti, 911 P.2d 853, 854 (Nev. 1996).   
No. 
2005AP2030   
 
27 
 
offered supposedly to assist the jury in determining the 
reasonable value of the medical treatment rendered, so that the 
existence of collateral source payments will not influence the 
fact-finder.51 
¶55 Third, Acuity narrowly focuses on paragraph 52 in the 
Koffman decision, arguing that the court recognized that the 
amount actually paid by a third party is a relevant factor in 
calculating the reasonable value of medical services. 
¶56 Paragraph 52 of the Koffman decision states as 
follows: 
Here, the evidence of the amounts paid by the 
plaintiff's 
insurers 
was 
inadmissible. 
 
As 
a 
consequence 
of 
the 
parties' 
stipulation 
to 
the 
reasonableness of amounts billed by the health care 
providers, the sole issue for the jury to determine 
was the amount of medical expense damages caused by 
the defendants' negligence.  The amounts paid by the 
plaintiff and his insurers were irrelevant to the 
determination of the causal link between the treatment 
and the injury.  In the absence of a separate basis 
for the relevance of this collateral source evidence, 
evidence of such payments should have been deemed 
inadmissible.52   
An 
accompanying 
footnote 
reads 
as 
follows: 
"Because 
the 
reasonableness of the amounts billed by the plaintiff's health 
care providers was the subject of the parties' stipulation, it 
cannot be said that the defendant's presentation of this 
                                                 
51 "The entire theory of the collateral source rule is to 
keep the jury from learning anything about the collateral income 
so that it will not influence the decision of the jury."  Wolfe 
v. Whipple, 251 N.E.2d 77, 82 (Ill. App. 1969).   
52 Koffman, 246 Wis. 2d 31, ¶52. 
No. 
2005AP2030   
 
28 
 
evidence was material to the valuation of those expenses in this 
case."53 
¶57 Acuity argues that paragraph 52 means that the 
reasonable value of medical services is a separate basis for 
admitting evidence of the collateral source payment.  The 
Koffman court cites only one case as an exception to the 
collateral source rule:  Hack v. State Farm Mutual Automobile 
Insurance Co., 37 Wis. 2d 1, 154 N.W.2d 320 (1967).  In Hack, 
evidence of collateral source payments was admissible to impeach 
the credibility of the plaintiff.  We need not address whether 
other exceptions to the collateral source rule exist.  We need 
only decide, and do decide, that Koffman does not support an 
exception to the collateral source rule when the evidence is 
used to determine the reasonable value of the medical treatment.  
¶58 The Koffman court did not hold in this passage that 
collateral source evidence is admissible for valuation purposes.  
The Koffman court was simply acknowledging that under the 
circumstances of the case in which the parties stipulated that 
the amount billed was the reasonable value of the medical 
treatment, no one could argue that the amount actually paid was 
admissible to prove the reasonable value. 
¶59 The sole purpose of Acuity's presentation of the 
evidence of the amount actually paid by a collateral source is 
to reduce the award for medical expenses to this payment, a 
result that is exactly what the Koffman court said the 
                                                 
53 Id., ¶52 n.10 
No. 
2005AP2030   
 
29 
 
collateral source rule is designed to combat.54  Acuity attempts 
to extrapolate too much from paragraph 52 in Koffman.  The 
passage upon which Acuity relies cannot be read to overrule the 
clear holding of Koffman. 
¶60 Fourth, Acuity attempts to distill from paragraph 27 
in the Koffman decision the rule that the actual amount paid by 
a collateral source is admissible for the purpose of determining 
the reasonable value of medical services.  In paragraph 27, the 
Koffman court stated as follows: 
In Wisconsin, a plaintiff who has been injured by the 
tortious conduct of another may recover the reasonable 
value of medical services rendered. . . . [W]e [have] 
explained that while the actual amount paid for 
medical services may reflect the reasonable value of 
the treatment rendered, the focus is on the reasonable 
value, not the actual charge.55 
¶61 Once again, we disagree with Acuity's interpretation 
of Koffman.  This passage is silent about the effect of the 
collateral source rule.  In the quoted passage, the Koffman 
court elucidated the well-accepted standard for valuation of 
medical services.   
¶62 Acuity reads too much into this isolated passage and 
reads it out of context, ignoring the overall premise of 
Koffman:  the collateral source rule operates to ensure that a 
plaintiff may recover the reasonable value of medical services 
                                                 
54 Id., ¶53.  
55 Id., ¶27 (emphasis added). 
No. 
2005AP2030   
 
30 
 
rendered without being limited to the amount actually paid by a 
collateral source.   
¶63 Fifth, Acuity argues that even if the collateral 
source rule bars introduction of evidence of amounts actually 
paid for medical services, this court modified the collateral 
source rule in Lagerstrom to permit introduction of evidence of 
collateral source payments.   
¶64 In Lagerstrom, the court considered the admissibility 
of collateral source payments in a medical malpractice action 
governed by Wis. Stat. § 893.55(7) (2001-02).56  This statute 
explicitly allows evidence of collateral source payments to be 
introduced in medical malpractice actions but fails to state the 
purpose for which the evidence may be admitted.  After reviewing 
the statutory text, its legislative history, its legislative 
goal, and common-law concepts, the Lagerstrom court concluded 
that the statute requires that the fact-finder be instructed 
that 
it 
may 
consider 
the 
collateral 
source 
payments 
in 
determining the reasonable value of medical services, but must 
                                                 
56 Wisconsin 
Stat. 
§ 893.55(7) 
(2001-02) 
provides 
in 
pertinent part: 
Evidence 
of 
any 
compensation 
for 
bodily 
injury 
received from sources other than the defendant to 
compensate the claimant for the injury is admissible 
in 
an 
action 
to 
recover 
damages 
for 
medical 
malpractice. 
 
This 
section 
does 
not 
limit 
the 
substantive or procedural rights of persons who have 
claims based upon subrogation. 
All references to the Wisconsin Statutes are to the 2001-02 
version unless otherwise noted. 
No. 
2005AP2030   
 
31 
 
not reduce the reasonable value of medical services by the 
amount of the collateral source payments.57  The court also 
reasoned that if evidence of the collateral source payments is 
presented to the fact-finder, then the parties must be allowed 
to furnish the jury with evidence of any obligations of 
subrogation or reimbursement.58 
¶65 Acuity relies on Lagerstrom to conclude that evidence 
of the amount actually paid by an insurance company is relevant 
and admissible evidence and accordingly that "evidence of 
collateral source payments may be used by the jury to determine 
the reasonable value of medical services."59  Acuity's arguments 
are off the mark.  Lagerstrom cannot be read so broadly as to 
apply to the facts of this case. 
¶66 The court in Lagerstrom observed that Wis. Stat. 
§ 893.55(7) did not abrogate the collateral source rule.  
Rather, the statute was a modification of the rules of evidence 
in medical malpractice cases.60  Attorneys Webster A. Hart and 
Stephanie L. Finn in 3 The Law of Damages in Wisconsin § 33.6 
(2005) properly summarize the impact of Wis. Stat. § 893.55(7) 
                                                 
57 Lagerstrom, 285 Wis. 2d 1, ¶5. 
58 Id. 
59 Id. 
60 The Lagerstrom court explained that "[w]e conclude that 
the text of § 893.55(7) explicitly allows evidence of collateral 
source 
payments 
to 
be 
introduced 
in 
medical 
malpractice 
actions." 
285 
Wis. 2d 1, 
¶74 
(emphasis 
added). 
 
Medical 
malpractice actions are a special type of tort action governed 
by Wis. Stat. ch. 655. 
No. 
2005AP2030   
 
32 
 
by stating that, "but for" the existence of section 893.55(7), 
the collateral source rule would prohibit juries from hearing 
evidence of the amounts received from other sources.   
¶67 Sixth, Acuity argues that the amounts billed by health 
care providers are "fantasy," "arbitrary," and "random" figures 
that have no correlation to the reasonable value of the medical 
services actually provided.  Acuity insists that the "reality 
rate," that is, the amount actually paid, is the true measure of 
the reasonable value of the medical services to be considered by 
the fact-finder in determining the reasonable value of medical 
services rendered.61 
¶68 Acuity may be correct that a significant difference 
frequently exists between the amount billed and the amount 
actually paid for medical services.  The amount actually paid 
for medical services may include substantial "discounts," as 
illustrated here and in Koffman.  The Koffman court reviewed 
factors that contribute to the discounted amounts that health 
insurance companies pay for medical services, such as volume and 
                                                 
61 As support for this notion of "fantasy rates," Acuity 
points to Dorr v. Sacred Heart Hospital, 228 Wis. 2d 429, 597 
N.W.2d 462 (Ct. App. 1999).  The Dorr case demonstrates that 
HMOs and health insurance providers are able to contract for 
discounted services, arranging benefits for their subscribers at 
a reduced rate.  In Dorr, the parties established a contractual 
relationship that was binding under the law.  Because the 
hospital violated the terms of this arrangement, the court of 
appeals held that the hospital was liable for conversion and 
tortious 
interference with the patients' health insurance 
contract. 
No. 
2005AP2030   
 
33 
 
guaranteed payment.  We recognized the sources of these 
"discounts" in Koffman as follows:  
The modern health care system employs a myriad of 
health care finance arrangements.  As part of the 
system, negotiated and contracted discounts between 
health care providers and insurers are increasingly 
prevalent.  Pursuant to these agreements, an insurer's 
liability for the medical expenses billed to its 
insured is often satisfied at discounted rates, with 
the remainder being "written-off" by the health care 
provider.62 
 
¶69 Acuity nonetheless asserts that the Koffman court was 
mistaken in characterizing the difference between the amount 
paid and the amount billed as a "discount."  Acuity explains 
that reimbursement rates are not "discounts" and instead are 
typically determined by each health insurance company pursuant 
to "usual, customary, and reasonable charges or prevailing rates 
in the community," as required by law.63  
 
¶70 We disagree with Acuity.  The Ellsworth court refused 
to accept a similar argument made by the tortfeasor in that case 
and concluded that the amount established by the state for 
health care providers participating in the Medical Assistance 
program is not dispositive of reasonable value, even though the 
                                                 
62 Koffman, 246 Wis. 2d 31, ¶21. 
63 Acuity cites Wis. Admin. Code INS § 3.60 regarding 
setting customary, usual, and reasonable charges.  
For a discussion of using a discount or write-off to prove 
the charges are unreasonably high, see 2 Dan B. Dobbs, The Law 
of Torts § 380 at 1060 (2006 pocket part at 149-50). 
No. 
2005AP2030   
 
34 
 
statute defines the charge for Medical Assistance as "the 
customary, usual and reasonable demand for payment." 
¶71 The evidence Acuity proffers will not assist the fact-
finder as Acuity claims, because a particular health insurance 
company's negotiated rates with a health care provider are not 
necessarily relevant evidence of the reasonable value of the 
medical services in a tort action.64   
¶72 The 
reimbursement 
rate 
of 
a 
particular 
health 
insurance 
company 
generally 
arises 
out 
of 
a 
contractual 
relationship and reflects a multitude of factors related to the 
                                                 
64 For support for the proposition that evidence of the 
amount actually paid is admissible to prove the reasonable value 
of 
the 
medical 
treatment 
rendered, 
Acuity 
cites 
to 
Lautenschlager v. Hamburg, 41 Wis. 2d 623, 630, 165 N.W.2d 129 
(1969) ("'The amount paid or liability incurred is merely 
evidence which can go to the jury to assist it in arriving at a 
reasonable award.'") (quoted source omitted).   
Lautenschlager sheds little light on the issue before the 
court.  In Lautenschlager, the jury awarded only $1,000 in 
damages although the plaintiff submitted bills that totaled 
$1,562.  Upon appeal, the court examined the adequacy of the 
award, deciding whether there was credible evidence to support 
it.  The court concluded that "[u]pon a review of the evidence, 
it is apparent that some medical bills were admitted into 
evidence with little or no testimony to support the necessity 
for the services in relation to the injuries sustained . . . ."  
41 Wis. 2d 623, 630.  The issue was one of failure of proof by 
the plaintiff and not the application of the collateral source 
rule.  The Lautenschlager court did not even refer to the 
collateral source rule. 
No. 
2005AP2030   
 
35 
 
relationship of the insurance company and the provider, not just 
to the reasonable value of the medical services.65   
¶73 The admission in evidence of the amount actually paid 
in the present case, even if marginally relevant,66 might bring 
                                                 
65 The Supreme Court of Virginia in Radvany v. Davis, 551 
S.E.2d 347 (Va. 2001), when faced with the same issue, likewise 
concluded that the amounts accepted by the plaintiff's health 
care providers are not evidence of whether the medical bills are 
reasonable in amount.  "The amounts accepted . . . represent 
amounts 
agreed 
upon 
pursuant 
to 
contractual 
negotiations 
undertaken 
in 
conjunction 
with 
[the 
plaintiff's] 
health 
insurance policy.  Such negotiated amounts, presumably inuring 
to the benefit of the medical providers, the insurance carrier, 
and [the plaintiff], do not reflect the 'prevailing cost' of 
those services to other patients."  Radvany, 551 S.E.2d at 348.  
Accordingly, the Supreme Court of Virginia held that "such 
amounts are not evidence of whether the medical bills are 
'reasonable, i.e., not excessive in amount, considering the 
prevailing cost of such services'" (internal citations omitted).  
Id. 
We explained in Koffman that the cost of medical treatment 
for plaintiffs with the same injury may vary depending on how 
each plaintiff's medical expenses are financed.  "One plaintiff 
may be uninsured and receive the benefit of Medical Assistance, 
another's insurer may have paid full value for the treatment, 
and yet another's insurer may have received the benefit of 
reduced contractual rates."  Koffman, 246 Wis. 2d 31, ¶31.  The 
"reasonable value of the treatment rendered" was not contingent 
upon "the various insurance arrangements that exist in each 
case."  Id. 
66 In Lagerstrom, this court recognized that the legislature 
decided in enacting Wis. Stat. § 893.55(7) that evidence of 
collateral source payments may be relevant to determining the 
reasonable 
value 
of 
medical 
services. 
 
Lagerstrom, 
285 
Wis. 2d 1, ¶¶5, 76. 
No. 
2005AP2030   
 
36 
 
complex, confusing side issues before the fact-finder that are 
not necessarily related to the value of the medical services 
rendered.67  Accordingly, Acuity errs in insisting that the 
amount actually paid by a collateral source in the present case 
is a factor for the fact-finder in determining reasonable value 
of those services.  The truth-seeking function of a trial is 
assisted, not perverted, by applying the collateral source rule 
and excluding the amount actually paid by a collateral source in 
the present case.  
¶74 In sum, we are not persuaded by Acuity's arguments 
that the collateral source rule is not applicable or that 
Ellsworth and Koffman do not govern the instant case. 
* * * * 
 
¶75 For the reasons set forth, we affirm the decision of 
the court of appeals.  We hold, as did the court of appeals, 
that the collateral source rule prohibits parties in a personal 
injury action from introducing evidence of the amount actually 
paid by a collateral source for medical treatment rendered to 
prove the reasonable value of the medical treatment.  We 
                                                                                                                                                             
Professor Dobbs comments that standing alone, the probative 
value of the amount actually paid to show "true" value "is 
rather weak."  He further comments, however, that if a provider 
routinely writes off a fixed percentage of its bills, "that fact 
plus other evidence may suffice to raise doubts about the 
reasonableness of the billed charges."  2 Dan B. Dobbs, The Law 
of Torts § 380 at 1060 (2006 pocket part at 149-50). 
67 See Wis. Stat. §§ 904.01, 904.03. 
No. 
2005AP2030   
 
37 
 
therefore remand this cause to the circuit court for proceedings 
consistent with this decision and the parties' stipulations.  
 
¶76 By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
 
No.  2005AP2030.pdr 
 
1 
 
¶77 PATIENCE DRAKE ROGGENSACK, J. (dissenting).   Joseph 
Leitinger was injured during the course of his employment.  His 
health care providers billed him $154,818.51 for the medical 
care he received.  However, his insurer paid only $111,394.73 to 
settle the bills in full.  No one has paid, or will ever pay, 
the $43,424.78 difference between the billed amount and the paid 
amount.  It is beyond question that under the facts of this case 
Leitinger is entitled to a damage award that includes the 
reasonable value of the medical care he received.  The question 
presented here is whether a circuit court must limit the 
evidence that a jury can hear as the jury determines the 
reasonable value of an injured party's medical care.  
¶78 The majority opinion concludes that "the collateral 
source rule prohibits parties in a personal injury action from 
introducing evidence of the amount actually paid by the injured 
person's health insurance company, a collateral source, for 
medical treatment rendered to prove the reasonable value of the 
medical treatment."  Majority op., ¶7.  In so doing, (1) it 
provides damages to Leitinger that are no longer compensatory 
damages because they exceed the amount necessary to make him 
whole; (2) it causes the relevancy of evidence to turn on who 
pays for the medical care provided, rather than on the 
relationship of the evidence to the reasonable value of the 
medical care provided, i.e., a fact the jury must determine; and 
(3) it usurps the jury's fact-finding function by hiding 
relevant evidence from the jury while at the same time 
presenting it with misleading evidence that implies that the 
No.  2005AP2030.pdr 
 
2 
 
billed amount is the cost of the medical care provided.  Because 
I conclude that the majority opinion extends the collateral 
source rule too far, I respectfully dissent.  
I.  BACKGROUND1 
¶79 Leitinger 
was 
injured 
in 
a 
construction-related 
accident while employed by his own company, Services Unlimited.  
His insurance company paid $43,424.78 less than the amount 
billed to satisfy all of the charges for the medical care he 
received.   
¶80 At trial, Acuity, who provided liability insurance to 
various defendants, did not stipulate that the amount that was 
billed is the reasonable value of the medical care provided, as 
the insurer had in Koffman v. Leichtfuss, 2001 WI 111, ¶7, 246 
Wis. 2d 31, 630 N.W.2d 201.  Acuity introduced the amount 
actually paid for Leitinger's medical care as evidence relevant 
to the jury's determination of the reasonable value of his 
medical care.2  The circuit court permitted expert testimony on 
the reasonable value of Leitinger's medical care, as well.  The 
jury awarded $111,394.73, the amount actually paid for the 
medical care.  
¶81 Leitinger appealed, and the court of appeals reversed, 
concluding 
that 
the 
collateral 
source 
rule 
prohibited 
                                                 
1 The factual and procedural backgrounds of this case are 
undisputed for purposes of this review.   
2 Leitinger objected to the admission of this evidence, but 
the circuit court agreed that the evidence was relevant to a 
question the jury was to decide.  Therefore, the amount paid for 
Leitinger's medical care was before the jury. 
No.  2005AP2030.pdr 
 
3 
 
presentation of evidence of the amount paid by Leitinger's 
insurance company.  Leitinger v. Van Buren Mgmt., Inc., 2006 WI 
App 146, ¶1, 295 Wis. 2d 372, 720 N.W.2d 152.  We granted 
Acuity's petition for review. 
II.  DISCUSSION 
A. 
Standard of Review 
¶82 A circuit court's decision to admit or deny admission 
of proffered evidence is a discretionary determination.  State 
v. Cofield, 2000 WI App 196, ¶7, 238 Wis. 2d 467, 618 N.W.2d 
214.  However, we determine as a question of law whether the 
evidence that was admitted or excluded is relevant to a factual 
determination the jury must make.  See Barrera v. State, 99 
Wis. 2d 269, 279, 298 N.W.2d 820 (1980).  In the case before us, 
the collateral source rule is implicated in the circuit court's 
evidentiary ruling.  The scope of the collateral source rule is 
a question of law that we address independently of the decisions 
of other courts, but aided by their analyses.  Ellsworth v. 
Schelbrock, 2000 WI 63, ¶6, 235 Wis. 2d 678, 611 N.W.2d 764.   
B. 
Relevant Evidence 
¶83 As 
a 
general 
principle, 
relevant 
evidence 
is 
admissible.  State v. Eugenio, 219 Wis. 2d 391, 411, 579 N.W.2d 
642 (1998).  Wisconsin Stat. § 904.01 (2001-02)3 provides that 
"'[r]elevant evidence' means evidence having any tendency to 
make the existence of any fact that is of consequence to the 
determination of the action more probable or less probable than 
                                                 
3 All subsequent references to the Wisconsin Statutes are to 
the 2001-02 version unless otherwise noted. 
No.  2005AP2030.pdr 
 
4 
 
it would be without the evidence."  However, the admission of 
relevant evidence may be precluded by constitution, statute or 
court rule.  Wis. Stat. § 904.02.  The collateral source rule is 
a court-made rule.  Cunnien v. Superior Iron Works Co., 175 Wis. 
172, 188, 184 N.W. 767 (1921).  
C. 
The Collateral Source Rule 
¶84 The collateral source rule began as a substantive rule 
of damages wherein the amount due to an injured party could not 
be reduced by amounts paid to or on behalf of an injured party 
by a collateral source.  Id.  In Cunnien, we concluded that the 
lower court erred in reducing the amount of Cunnien's damages by 
the $1,500 that his employer had paid him as salary while he was 
unable to work due to his injuries.  Id.   
¶85 Under the collateral source rule, an injured plaintiff 
may seek as part of his damages the reasonable value of medical 
care provided, without a deduction for payments made for those 
services by collateral sources.  Ellsworth, 235 Wis. 2d 678, ¶9.  
The collateral source rule "prevents payments made by the 
insure[r of the injured party] from inuring to the benefit of 
the defendant, and the insurer's subrogation rights prevent a 
double recovery on the part of the plaintiff."  Koffman, 246 
Wis. 2d 31, ¶40. 
¶86 Over the years, the collateral source rule has taken 
on an evidentiary character, in addition to its being a 
substantive rule of damages.  Id., ¶52.  It has been used to 
prevent, or overrule, the admission of evidence of payments by a 
collateral source.  Id. 
No.  2005AP2030.pdr 
 
5 
 
¶87 In Koffman, the defendant stipulated4 that the amount 
billed by Koffman's medical care providers was reasonable.  Id., 
¶7.  Therefore, we concluded that the admission of the amount 
actually paid to the medical care providers was "irrelevant" to 
determining the reasonable value of the medical care provided.  
Id., ¶53.  Accordingly, we concluded that the amount paid was 
not admissible.  Id.   
¶88 While the collateral source rule is grounded in 
requiring a tortfeasor to pay all the damages that resulted from 
his tortious conduct and ensuring that he does not benefit from 
collateral payments made to compensate for injuries he caused, 
id., ¶29, it is also grounded in the collateral payer's rights 
of subrogation that keep a plaintiff from a double recovery for 
a single injury, id., ¶33.  We explained in Koffman:  "[I]f the 
[plaintiff's] insurer is barred from exercising its subrogation 
rights, the plaintiff's recovery of the reasonable value of 
medical expenses would simply be reduced by the amounts paid on 
his behalf in order to prevent a double recovery."  Id., ¶41.   
¶89 Our explanation about preventing a double recovery for 
a single injury while employing the collateral source rule in 
Koffman is consistent with our earlier statements in Voge v. 
Anderson, 181 Wis. 2d 726, 732, 512 N.W.2d 749 (1994) and 
Lambert v. Wrensch, 135 Wis. 2d 105, 121, 399 N.W.2d 369 (1987), 
as we explained in Koffman.  There, we reaffirmed that if the 
                                                 
4 This stipulation affected the reasoning in our decision 
because we did not explain why the collateral source rule, which 
had heretofore been applied to payments made on behalf of the 
injured party, could now be applied to non-payments.  
No.  2005AP2030.pdr 
 
6 
 
collateral payer is barred from pursuing a subrogation claim for 
its payment, the tortfeasor is entitled to a reduction in the 
judgment for that collateral payment.  Koffman, 246 Wis. 2d 31, 
¶39 (explaining that "[i]n Voge v. Anderson, we properly 
characterized Lambert as holding that 'where the [plaintiff's] 
insurer is barred from pursuing a claim [of subrogation], the 
tortfeasor is entitled to a reduction in judgment for the amount 
of that claim'").  Therefore, the collateral source rule does 
not always prevent a reduction in a plaintiff's award of damages 
for amounts paid by a collateral source, nor are such payments 
always inadmissible evidence.  See also Hack v. State Farm Mut. 
Auto. Ins. Co., 37 Wis. 2d 1, 10, 154 N.W.2d 320 (1967) 
(concluding that evidence of a collateral source payment is 
admissible for purposes of impeachment).  
¶90 The majority opinion asserts, contrary to Wisconsin 
law, that there are times when the collateral source rule 
permits double recoveries by an injured party.  Majority op., 
¶34 (stating that "an injured person may experience double 
recovery when the collateral source rule is applied, one 
recovery from the collateral source and a second recovery from 
the tortfeasor").  The majority opinion cites Dan B. Dobbs, 
Dobbs Law of Remedies:  Damages, Equity, Restitution § 8.6 at 
496 (2d ed. 1993) as support for its assertion, but Dobbs does 
not support the majority opinion.  Rather, Dobbs explains that a 
plaintiff does not receive a double recovery because of the 
subrogation and reimbursement rights that are held by the 
collateral payers.  Id.  In Wisconsin, as we recently reaffirmed 
No.  2005AP2030.pdr 
 
7 
 
in Koffman, an injured party is not entitled to a double 
recovery for a single injury under the collateral source rule:  
"[I]f the insurer is barred from exercising its subrogation 
rights, the plaintiff's recovery of the reasonable value of 
medical expenses would simply be reduced by the amounts paid on 
his behalf in order to prevent a double recovery."  Koffman, 246 
Wis. 2d 31, ¶41. 
¶91 Furthermore, as its name demonstrates, the collateral 
source rule applies to payments only if they are made by a 
"collateral" source.  That is, the source of payment must be 
collateral to the tortfeasor.  The majority opinion recognizes 
this legal principle.  Majority op., ¶26. 
¶92 Therefore, if the tortfeasor or the tortfeasor's 
insurer pays for the medical care provided to the injured party, 
their payments would not be governed by the collateral source 
rule because a payment from either the tortfeasor or his 
liability insurer would not be from a "collateral" source.  
Restatement (Second) Torts § 920A(2) (1977).  Accordingly, the 
collateral source rule would not prevent the amount paid by a 
tortfeasor or by the tortfeasor's insurer for a plaintiff's 
medical care from being presented to the jury as evidence of the 
reasonable value of the medical care, even if a larger amount 
had been billed for the care than was paid for it. 
No.  2005AP2030.pdr 
 
8 
 
D. 
Effects of the Majority Opinion 
¶93 The jury awarded Leitinger $43,424.78 less than the 
amount he was billed for the medical care he received.  No one 
has paid this $43,424.78 on his behalf.  The collateral source 
rule, whether a substantive rule of damages or an evidentiary 
rule relating to what evidence is relevant to a determination of 
the reasonable value of medical care provided to an injured 
plaintiff, is grounded in two principles:  (1) the collateral 
payments must not provide a double recovery for a single injury 
and (2) any collateral payments made to or on behalf of an 
injured plaintiff should not reduce the amount the tortfeasor 
will be required to pay to compensate for the injury he caused.  
Koffman, 246 Wis. 2d 31, ¶¶29, 41.  The majority opinion cuts 
against both principles.  
¶94 The first principle——not providing a double recovery 
for a single injury——is driven by the policy that an injured 
party is entitled to be made whole by compensatory damages, but 
not more than whole.  White v. Benkowski, 37 Wis. 2d 285, 290, 
155 N.W.2d 74 (1967).  There are only two occasions under 
Wisconsin law for which an injured party receives damages that 
exceed damages sufficient to make him whole:  first, when 
punitive damages are awarded to punish the wrongdoer, id., or 
second, when the legislature establishes a statutory right of 
recovery that exceeds a plaintiff's compensatory damages.  See, 
e.g., 
Wis. 
Stat. 
§ 133.18 
(awarding 
treble 
damages 
for 
violations of Wisconsin antitrust laws).  "The sole object of 
compensatory damages is to make the injured party whole for 
No.  2005AP2030.pdr 
 
9 
 
losses actually suffered; the plaintiff cannot be made more than 
whole, make a profit, or receive more than one recovery for the 
same harm."  22 Am Jur. 2d Damages § 28.   
¶95 Here, the majority opinion employs the collateral 
source rule to provide damages that are greater than those that 
will make Leitinger whole; however, no punitive damages were 
awarded and no statute afforded a recovery in addition to 
compensatory damages.  The majority opinion simply gives 
Leitinger a double recovery for part of the reasonable value of 
the medical care provided, contrary to established precedent.  
Koffman, 246 Wis. 2d 31, ¶41; Voge, 181 Wis. 2d at 732; Lambert, 
135 Wis. 2d at 121.   
¶96 In so doing, the majority opinion creates a new 
category of damages, without acknowledging what it is doing.  It 
does so by unnecessarily expanding the evidentiary component of 
the collateral source rule to prohibit the jury from hearing 
what was actually paid to cover all of Leitinger's medical care 
bills while admitting evidence of what was billed, even though 
no one will ever pay that amount.   
¶97 This new rule of evidence, which will be applied to 
cases where the plaintiff's insurance company pays the medical 
care bills, cannot be applied to preclude the admission of the 
same evidence of payment when a tortfeasor's insurer pays for 
the medical care.  This is so because a payment from the 
tortfeasor's insurer is not a payment from a collateral source.  
Therefore, 
the 
majority opinion will produce inconsistent 
evidentiary rulings, where the admissibility of evidence will 
No.  2005AP2030.pdr 
 
10 
 
not depend on whether the evidence is actually relevant to the 
reasonable value of the medical care provided to an injured 
person, i.e., a fact that a jury must find, but rather, it will 
depend on who pays for the medical care.  Facilitating such 
inconsistent evidentiary rulings should be a red flag to the 
majority opinion that it goes too far in its extension of the 
collateral source rule.  
¶98 As I have explained above, Leitinger will never have 
to pay the amount billed, nor will anyone else.  However, it 
does not follow that there is no cost to anyone for the 
$43,424.78 that Leitinger will collect.  Liability insurance 
premiums will rise to cover this new wrinkle in damages that a 
liability insurer will be required to pay, even though a jury 
decided that these amounts are not needed to fully compensate 
the injured party.  And query, if the amount billed is actually 
the reasonable value of the medical care provided, shouldn't it 
be paid to the persons who provided that care, as it is they who 
have not been fully compensated?   
¶99 The majority opinion also implies throughout that the 
collateral source rule has been employed without exception any 
time there is a payment from a collateral source.  However, our 
decisions in Koffman, Voge and Lambert show that is not correct.  
I 
recognize that 
in Koffman we said that "[w]here the 
plaintiff's health care providers settle the plaintiff's medical 
bills with the plaintiff's insurers at reduced rates, the 
collateral source rule dictates that the defendant-tortfeasor 
not receive the benefit of the written-off amounts."  Koffman, 
No.  2005AP2030.pdr 
 
11 
 
246 Wis. 2d 31, ¶30.  However, we reached this conclusion after 
the defendants stipulated that the amount billed was the 
reasonable value of the medical services provided.  Id., ¶7.  
Acuity made no such stipulation here.   
¶100 Furthermore, the statement at ¶30 of Koffman that is 
quoted immediately above must be read in the context of the 
issue we now face, i.e., can the jury consider the amount paid——
together with any other relevant evidence the parties care to 
present——as it decides the reasonable value of the medical care 
provided to Leitinger?  With no stipulation from Acuity that the 
amount billed for the medical care is reasonable, there is 
nothing to support the conclusion that the amount billed is any 
more relevant to a determination of the reasonable value of the 
medical care provided than is the amount paid for that care.  I 
favor letting the jury decide jury questions.  As has been 
explained:  
[C]oncealing relevant information from the jury does 
not further the legitimate purpose of the collateral 
source rule.  . . .  It serves no principled purpose 
for courts to diminish the jury's role through a 
judge-made policy of concealment.  Other rules of 
damages are imparted to the jury through instructions 
from the court; courts should treat the collateral 
source rule in the same way. 
Joel K. Jacobsen, The Collateral Source Rule and the Role of the 
Jury, 70 Or. L. Rev. 523, 541 (1991).  
¶101 There is an additional reason why the amount paid 
should not be excluded from evidence a jury can consider while 
the amount billed is admitted.  It has been said that the amount 
billed for medical expenses has become a fictitious amount.  See 
No.  2005AP2030.pdr 
 
12 
 
Jacobsen, supra; John Dewar Gleissner, Proving Medical Expenses:  
Time for a Change, 28 Am. J. Trial Advoc. 649 (2005); Robert 
Hernquist, Arthur v. Catour:  An Examination of the Collateral 
Source Rule in Illinois, 38 Loy. U. Chi. L.J. 169 (2006). 
If the higher stated medical bill, an amount that 
never was and never will be paid, is admitted without 
evidence of the lower reimbursement rate, the jury is 
basing 
their 
verdict 
on 
"mere 
speculation 
or 
conjecture."  The difference between the stated bill 
and the paid charges . . . is purely fictional as a 
true charge. 
Gleissner, 28 Am. J. Trial Advoc. at 656. 
III.  CONCLUSION 
¶102 Therefore, 
I conclude that the majority opinion 
extends the collateral source rule too far, and in so doing: (1) 
it provides damages to Leitinger that are no longer compensatory 
damages because they exceed the amount necessary to make him 
whole; (2) it causes the relevancy of evidence to turn on who 
pays for the medical care provided, rather than on the 
relationship of the evidence to the reasonable value of the 
medical care provided, i.e., a fact the jury must determine; and 
(3) it usurps the jury's fact-finding function by hiding 
relevant evidence from the jury while at the same time 
presenting it with misleading evidence that implies that the 
billed amount is the cost of the medical care provided.  
Accordingly, I respectfully dissent. 
¶103 I am authorized to state that Justice DAVID T. PROSSER 
joins in this dissent. 
No.  2005AP2030.pdr 
 
1