Opinion ID: 2120164
Heading Depth: 1
Heading Rank: 3

Heading: Negotiated Discounts and Other Jurisdictions

Text: Here, the question is whether a negotiated discount obtained by a plaintiff's health insurer is a collateral source as defined by subdivision 1(2) of the collateral-source statute. Before addressing negotiated discounts in the context of Minnesota's collateral-source statute, we first consider how negotiated discounts are treated in other jurisdictions. Several other jurisdictions have considered whether a plaintiff may recover a negotiated discount as an item of damages. The analyses and conclusions of these courts are varied. Courts in some jurisdictions that follow the common-law collateral-source rule have held that a discount is a collateral-source benefit, in essence treating it like a money payment delivered by an insurer to a healthcare provider on an insured's behalf. See, e.g., Hardi v. Mezzanotte, 818 A.2d 974, 983-85 (D.C.2003). In accordance with the common-law collateral-source rule's prohibition of reducing a plaintiff's award by a collateral-source benefit, these courts have held that the discount cannot be credited against the tortfeasor's liability; in other words, a plaintiff may recover the discount amount from the tortfeasor. See, e.g., id. Some of these courts also explicitly state that a party may not introduce evidence that a plaintiff paid his health care provider a lower money amount than the amount billed. See, e.g., Leitinger v. DBart, Inc., 302 Wis.2d 110, 736 N.W.2d 1, 18 (2007). Courts in other jurisdictions that follow the common-law collateral-source rule have said that negotiated discounts are not collateral sources, and therefore allow defendants to introduce evidence of the amount of money an insurer delivers to a healthcare provider to satisfy a plaintiff's medical debt. See Stanley v. Walker, 906 N.E.2d 852, 858 (Ind.2009); Robinson v. Bates, 112 Ohio St.3d 17, 857 N.E.2d 1195, 1200 (2006). These courts do not require that the negotiated discount be deducted from a plaintiff's damage award; in other words, they do not preclude a plaintiff from recovering a negotiated discount. See Robinson, 857 N.E.2d at 1200 (declining to adopt a categorical rule that a plaintiff may not recover negotiated discounts and instead stating that [t]he jury may decide that the reasonable value of medical care is the amount originally billed, the amount the medical provider accepted as payment, or some amount in between). These courts hold that a plaintiff is entitled to reasonable medical expenses and provide that [b]oth the original medical bill rendered and the amount accepted as full payment are admissible to prove the reasonableness and necessity of charges rendered for medical and hospital care. See id. at 1200; Stanley, 906 N.E.2d at 858. Other states, like Minnesota, have passed collateral-source statutes that have partially abrogated the common-law collateral-source rule. When faced with determining whether negotiated discounts are recoverable by plaintiffs, courts in states that have collateral-source statutes have interpreted their statutes and have endeavored to render decisions that are consistent with legislative intent. See, e.g., Goble v. Frohman, 901 So.2d 830, 833 (Fla. 2005); White v. Jubitz Corp., 347 Or. 212, 219 P.3d 566, 580-83 (2009).