Collateral Source Rule

In many personal injury cases, some of the injured person’s medical bills may be reduced by payments made from the person’s health insurance or worker’s compensation benefits. The collateral source rule in Florida provides that an injured person is not entitled to recover for the portion of their medical bills that have been paid by insurance or from certain other sources. This means that any overall recovery or award from a jury will be reduced by the Judge to the extent that other sources have already paid a portion of the medical expenses.

As part of the collateral source rule, the Judge, not the jury, makes the reduction after the initial award from the jury because the injured person is afforded the opportunity to show the full amount of their medical bills to help establish the severity of their injury as it relates to pain and suffering. The Judge then comes in afterwards and reduces the award by any payments made from collateral sources; this includes any portion of any medical bills that have been waived by the medical provider.

Medicare and Medicaid payments towards medical bills are allowed to be introduced to the jury and the jury is required to reduce any award they may give to the plaintiff by those amounts. Along those lines, in many cases the injured person is treated under a letter of protection, meaning they are receiving medical services that will be paid for from any eventual recovery in the case. The existence of a letter of protection is not allowed to be presented to the jury, but if the medical provider accepts a reduced payment for those services, or waives any portion of their bill, the Judge can reduce any recovery by that amount.

The collateral source rule also does not allow an injured person to recover for expenses that they were already paid by certain other sources. However, the collateral source rule also works to protect an injured person’s rights because it allows them to show the total amount of all medical bills regarding the cost of their treatment whether they truly paid those out of pocket or not in order to show the amount of treatment and the costs of that treatment which helps prove the pain and suffering they endured from the accident.