Opinion ID: 1103946
Heading Depth: 1
Heading Rank: 4

Heading: Actual Amounts Paid

Text: The second approach taken by courts, and urged by defendant in the case sub judice, is to deny the plaintiff the ability to recover the write-off amounts because the plaintiff did not incur the write-off amount, thus, resulting in a windfall for the plaintiff, if the plaintiff was allowed to recover. The Idaho Supreme Court used this logic in deciding Dyet v. McKinley, 139 Idaho 526, 81 P.3d 1236, 1239 (Id. 2003), where the court held that (a)lthough the write-off technically is not a payment from a collateral source within the meaning of the collateral source statute, it is not an item of damages for which plaintiff may recover because plaintiff has incurred no liability therefore. In the case sub judice, the Louisiana Second Circuit Court of Appeal, agreed that the goal of tort recovery is to make the victim whole and that goal would not be served by allowing recovery of a non-existent debt. Bozeman II, at 966. The Second Circuit agreed with the Louisiana Fourth Circuit Court of Appeal ruling that a plaintiff may not recover as damages that portion of medical expenses `contractually adjusted' or `written off' by a healthcare provider pursuant to the requirements of the Medicaid program. Such expenses are not damages incurred by the plaintiff and are not subject to recovery by application of the collateral source rule. Terrell v. Nanda, supra, 759 So.2d at 1031. Defendant, DOTD, adheres to this reasoning. DOTD argues that the Medicaid write-off amount is an illusory amount that is simply used by healthcare providers to set their fee payments with Medicaid. DOTD argues that the plaintiff never incurred this bill, and by operation of state and federal law, the Medicaid provider is required to accept as full payment the amount paid by Medicaid, and no more. Thus, to allow the plaintiff to recover this additional amount would violate the law of compensatory damages, which is to make the plaintiff whole. According to defendant, allowing plaintiff to recover an amount that neither he nor anyone was ever obligated to repay, an amount over and above what was actually paid for his medical expenses, would be to grant the plaintiff a windfall because plaintiff would recover damages in excess of what it took to make the plaintiff whole, thus, violating the goal of tort recovery. We disagree. The Wisconsin Supreme Court in Koffman v. Leichtfuss, supra, 246 Wis.2d at 47, 630 N.W.2d 201, held that the collateral source rule is grounded in the long-standing policy decision that should a windfall arise as a consequence of an outside payment, the party to profit from that collateral source is the person who has been injured, and not the one whose wrongful acts caused the injury. Similarly, the Kansas Supreme Court held that (i)f there is to be a windfall, it should benefit the injured party rather than the tortfeasor. Rose v. Via Christi, 276 Kan. 539, 544, 78 P.3d 798. Likewise, the Montana Supreme Court concluded that (t)he principle behind the collateral source rule is that it is better for the wronged plaintiff to receive a potential windfall than for a tortfeasor to be relieved of responsibility for the wrong. Five U's Inc. v. Burger King Corp., 290 Mont. 452, 455, 962 P.2d 1218. Thus, the proper focus of our inquiry is on the nature of the write-offs vis-a-vis the tortfeasor, rather than vis-a-vis the tort victim, as stated by the Louisiana First Circuit Court of Appeal, in Griffin v. The Louisiana Sheriff's Auto Risk Assoc., 1999 CA 2944 (La.App. 1 Cir. 6/22/01), 802 So.2d 691, 715. The court further determined that when courts approach the problem with this focus, the application of the collateral source rule makes more sense and is more appropriate. This rationale can best be understood by analyzing the write-offs in two situations: one in which a tortfeasor injures an uninsured victim and the other in which the same tortfeasor, in the same manner and to the same extent, injures an insured victim. Unless the write-offs are considered collateral sources, the tortfeasor would be relieved of his liability to the insured victim to the amount of the write-offs. The argument that there is no underlying obligation for plaintiff to pay the amount of the write-offs and, therefore, the plaintiff should not be allowed to benefit from a non-existent debt, falls because the effect of this reasoning results in a diminution of the tortfeasor's liability vis-a-vis an insured victim when compared with the same tortfeasor's liability vis-a-vis an uninsured victim.