COLLATERAL SOURCE RULE REFORM

The collateral source rule bars the admissibility of evidence at trial to show that a plaintiff's losses have been compensated from other sources, such as the plaintiff's insurance or workers compensation.   

PROBLEM:  The collateral source rule keeps important information relevant to the determination of damages from reaching the jury.  It allows plaintiffs to be compensated twice for the same injury.

ATRA'S POSITION:  ATRA supports permitting the admissibility of evidence of collateral source payments at trial or requiring awards to be offset by the amount paid to plaintiffs by collateral sources, less the amount paid by the plaintiff to secure the benefit.   

OPPOSITION:  The personal injury bar's argument in support of the collateral source rule – that a plaintiff should not be penalized for having insurance – fails to take into account the fact the jury should full information when making as determination about damages. 

STATE REFORMS

ALABAMA

Collateral Source Rule Reform: (1987): Ala. Code § 6-5-545.  Permits the admissibility of evidence of collateral source payments.  The collateral source rule reform in civil tort cases did not violate the right to trial by jury, or the due process, equal protection, access to courts, or right to a remedy provisions of the State Constitution, or the principle of separation of powers.  Marsh v. Green, 782 So. 2d 223 (Ala. 2000) (overruling American Legion Post No. 57 v. Leahey, 681 So. 2d 1337 (Ala. 1996).   

ALASKA

Collateral Source Rule Reform: SB 337 (1986): Alaska Stat. § 9.17.070.  Permits the admissibility of evidence of collateral source payments.  Provides for awards to be offset, less any amount paid by the claimant to secure the benefit, e.g., insurance premiums.

ARIZONA

Collateral Source Rule Reform: SB 1055 (1993): Ariz. Rev. Stat. § 12-565.  Permits the admissibility of evidence of collateral source payments in all civil liability cases. 

CALIFORNIA

Medical Liability Reform: Collateral Source Rule Reform: The Medical Injury Compensation Reform Act (MICRA): (1975): Cal. Civ. Code § 3333.1.  Permits the admissibility of evidence of collateral source payments and amounts paid to secure the benefit.  The collateral source rule reform statute does not violate the equal protection or due process provisions of the State or Federal Constitutions.  Fein v. Permanente Medical Group, 695 P.2d 665 (Cal.), appeal dismissed, 474 U.S. 892 (1985).

COLORADO

Collateral Source Rule Reform: SB 67 (1986): Colo. Rev. Stat. § 13-21-111.6.  Permits the admissibility of evidence of collateral source payments.  Provides for awards to be offset with broad exclusions.

CONNECTICUT

Collateral Source Rule Reform: HB 6134 (1986): Conn. Gen. Stat. Ann. § 52‑225a.  Permits the admissibility of evidence of collateral source payments.  Provides for awards to be offset by the amount paid by collateral sources less any amount paid by the claimant to secure the benefit.

DELAWARE

Medical Liability Reform: Collateral Source Reform: Del. Code Ann. tit. 18 § 6862.  Permits the admissibility of evidence of collateral source payments in medical liability actions.

FLORIDA

Collateral Source Rule Reform: SB 465 (1986): Collateral Source Reform: Fla. Stat. § 768.76. Provides for awards to be offset with broad exclusions.  The collateral source rule reform is  unconstitutional.  Smith v. Department of Insurance, 507 So.2d 1080 (Fla. 1987).      

GEORGIA

Collateral Source Reform.  Permits the admissibility of evidence of collateral source payments.  The statute authorizing admission of collateral sources of recovery available to plaintiffs seeking special damages for tortious injury violated the State Constitutional requirement of impartial and complete protection to person and property.  Denton v. Con-Way Southern Express, Inc., 402 S.E.2d 269 (Ga. 1991).

HAWAII

Collateral Source Rule Reform: SB S1 (special session) (1986): Sunset provision (SB 1529) enacted in 1991.  Provides for the payment of valid liens (arising out of claims for payments made from collateral sources for costs and expenses arising from an injury) from special damages recovered.  Prevents double recoveries by allowing subrogation liens by insurance companies or other sources.  Allows third parties to file a lien and collect the benefits paid to the plaintiff from the plaintiff’s award. The reform does not affect the amount of damages paid by the defendant to the plaintiff.

IDAHO

Collateral Source Rule Reform: HB 745 (1990): Idaho Code Ann. § 6-1606.  Permits the admissibility of evidence of collateral source payments.  Provides for awards to be offset to the extent that they include double recoveries from sources other than federal benefits, life insurance, or contractual subrogation rights.

ILLINOIS

Collateral Source Rule Reform: SB 1200 (1986): 735 Ill. Comp. Stat Ann. § 5/2 –1205.  Provides for awards to be offset for benefits over $25,000, as long as the offset does not reduce the judgment by more than 50%.

INDIANA

Collateral Source Rule Reform: SB 394 (1986): Ind. Code Ann. § 34-44-1-2.   Permits the admissibility of evidence of collateral source payments from sources other than life insurance, other insurance for which the plaintiff or members of the plaintiff’s family have paid directly, or payments made by the United States or any of its agencies or subdivisions.  Provides for awards to be offset at the court’s discretion.  Permits a court to instruct a jury to disregard tax consequences of its verdict.

IOWA

Collateral Source Rule Reform: SF 482 (1987).  Permits the admissibility of evidence of collateral source payments.  

Medical Liability Reform: Collateral Source Rule Reform: Iowa Code Ann. § 147.136.  Provides for awards in medical liability cases to be offset by collateral sources.  The failure of the statute abrogating the collateral source rule in specified situations involving medical and hospital malpractice claims to distinguish between insured and self-insured institutions did not violate the equal protection clause of the Federal Constitution.  Lambert v. Sisters of Mercy Health Corp., 369 N.W.2d 417 (Iowa 1985).

KANSAS

Collateral Source Rule Reform: HB 2693 (1988).  Permits the admissibility of evidence of collateral source payments, where damages exceed $150,000.  Provides for awards to be offset when the court assigns comparative fault.  The statute allowing evidence of collateral source benefits where claimant demands judgment for damages in excess of $150,000 violated the equal protection provision of the State Constitution.  Thompson v. KFB Insurance Co., 850 P.2d 773 (Kan. 1993).

KENTUCKY

Collateral Source Rule Reform: HB 551 (1988).  Mandates that juries be advised of collateral source payments and subrogation of rights of collateral payers.  The statute allowing the admission of evidence of collateral source payments in personal injury actions violated the separation of powers provision of the State Constitution.  O’Bryan v. Hedgespeth, 892 S.W.2d 571 (Ky. 1995).

MAINE

Collateral Source Rule Reform: LD 2513 (1990): Me. Rev. Stat. Ann. tit. 24 § 2961.  Provides for awards to be offset by collateral source payments, where the collateral sources have not exercised subrogation rights within 10 days after a verdict for the plaintiff.

MASSACHUSETTS

Medical Liability Reform: Collateral Source Reform: Mass. Gen. Laws Ann. Ch. 231 § 60-G.  Provides for awards to be offset by collateral sources, less any premiums paid by the claimant to secure those benefits.

MICHIGAN

Collateral Source Rule Reform: HB 5154 (1986).  Permits the admissibility of evidence of collateral source payments after the verdict and before judgment is entered.  Permits courts to offset awards, as long as a plaintiff’s damages are not reduced by more than the amount awarded for economic damages.  The statute providing for the admissibility of collateral source payments in personal injury actions did not constitute an unconstitutional taking of property and did not violate the equal protection or right to jury trial provisions of the State Constitution.  Heinz v. Chicago Road Investment Co., 549 N.W.2d 47 (Mich. App. 1996), appeal denied, 567 N.W.2d 250 (Mich. 1997).

Medical Liability Reform: Collateral Source Rule Reform: Mich. Comp. Laws § 600.6303.  Provides for medical liability awards to be offset by collateral sources, less any premiums paid to obtain the benefit. 

MINNESOTA

Collateral Source Rule Reform: SB 2078 (1986): Minn. Stat. Ann. § 548.36.  Permits the admissibility of evidence of collateral source payments only for the court’s review.  Provides for awards to be offset by collateral source payments, unless the source of reimbursement has a subrogation right.  The statutory provision allowing a court to offset collateral source payments was not unconstitutionally vague and did not violate the due process, equal protection, or right to remedy provisions of the State Constitution.  Johnson v. Farmers Union Central Exchange, Inc., 414 N.W.2d 425 (Minn. App. 1987).

MISSOURI

Collateral Source Rule Reform: H.B. 393 (2005).  Modifies the collateral source rule to allow the actual amount of paid medical expenses to be introduced into evidence rather than the amount billed.

Collateral Source Rule Reform: HB 700 (1987).  Permits the admissibility of evidence of collateral source payments, but provided that a defendant who presents collateral source payments as evidence waives his right to a credit against the judgment for that amount.

MONTANA

Collateral Source Rule Reform: HB 567 (1987).  Permits the admissibility of evidence of collateral source payments, unless the source of reimbursement has a subrogation right under state or federal law.   Requires a court to offset damages over $50,000.

Medical Liability Reform: Collateral Source Rule Reform: Mont. Code Ann.  § 27‑1‑308.  Provides for awards to be offset by collateral sources that do not involve rights of subrogation in medical liability cases for awards over $50,000.

NEBRASKA

Medical Liability Reform: Collateral Source Rule Reform: Neb Stat. § 44-2819.  Allows evidence of nonreturnable medical reimbursement insurance in medical liability cases to be taken as a credit against any judgment rendered.

NEVADA

Medical Liability Reform: Collateral Source Rule Reform: Nev. Rev. Stat. Ann. § 42.020.  Provides for awards in medical liability cases to be offset by the amount received by a collateral source, including any prior payment by the defendant health care provider.  

NEW HAMPSHIRE

Medical Liability Reform: Collateral Source Rule Reform: A New Hampshire statute abolishing the collateral source rule was found to be unconstitutional in Carson v. Maurer, 424 A.2d 825 (N.H. 1980).

NEW JERSEY

Collateral Source Rule Reform: SB 2703, SB 2708 (1987): N.J. Stat. Ann. § 2A:15-92.  Provides for awards to be offset by collateral source payments other than workers’ compensation and life insurance benefits.

NEW YORK

Collateral Source Rule Reform: SB 9351 (1986).  Provides for awards to be offset by collateral source payments. 

Medical Liability Reform: Collateral Source Rule Reform: N.Y. C.P.L:R § 4545(a).  Permits the admissibility of evidence of collateral source payments in medical liability cases.

NORTH DAKOTA

Collateral Source Rule Reform: HB 1571 (1987): N.D. Cent. Code § 32-03.2-06.  Provides for awards to be offset by collateral source payments other than life insurance or insurance purchased by the recovering party.

OHIO

Collateral Source Rule Reform: Am Sub SB 80 (2004). Provides that collateral source benefits can be introduced into evidence, except under certain circumstances.

Collateral Source Rule Reform: SB 281 (2003).  Provides for awards in medical malpractice cases to be offset by collateral source payments, unless the source of the reimbursement has a mandatory self-effectuating federal right of subrogation or a contractual or statutory right of subrogation.

Collateral Source Rule Reform: HB 350 (1996).  Permits the admissibility of evidence of collateral source payments, including workers’ compensation benefits, but only if there is no right of subrogation attached or the plaintiff has not paid a premium for the insurance.  The comprehensive 1996 tort reform law violated the doctrine of separation of powers and one-subject provision of the State Constitution.  State ex rel. Ohio Academy of Trial Lawyers v. Sheward, 715 N.E.2d 1062 (Ohio 1999). 

Collateral Source Rule Reform: HB 1 (1987).  Provides for awards to be offset by payments of collateral source benefits that have been paid or are likely to be paid within 60 months of judgment, unless the source of reimbursement has a subrogation right.  The statute providing offset of collateral source benefits received by a plaintiff violated the right to jury trial, due process, equal protection, right to open courts, and right to meaningful recovery provisions of the State Constitution.  Sorrell v. Thevenir, 633 N.E.2d 504 (Ohio 1994).  Samuels v. Coil Bar Corp., 579 N.E.2d 558 (Ohio Cm. Pl. 1991) (same as applied to wrongful death actions).

OKLAHOMA

Collateral Source Rule Reform: SB 629 (2003): 63 O.S. § 1-1708.1D.  Permits Permits the admissibility of evidence of collateral source payments, unless the court determines the payment is subject to subrogation or any other right of recovery.

OREGON

Collateral Source Rule Reform: SB 323 (1987): Or. Rev. Stat. § 18.580 .  Permits a judge to reduce awards for collateral source payments, excluding life insurance and other death benefits, benefits for which plaintiff have paid premiums, retirement benefits, disability benefits, pension plan benefits, and federal social security benefits.

PENNSYLVANIA

Medical Liability Reform: Collateral Source Rule Reform: HB 1802 (2002): 40 Pa. Cons. Stat. Ann. § 1301.602.  Prohibits a patient from suing for damages that were paid by a health insurer.

RHODE ISLAND

Medical Liability Reform: Collateral Source Rule Reform: R.I. Gen. Laws  § 9-19-34.1.  Permits the admissibility of evidence collateral source payments from “state income disability or workers’ compensation, any health, sickness or income disability policy, or other contracts” for reimbursement.  Requires a jury to reduce damages awards by the amount paid by collateral sources, if such evidence is introduced.

SOUTH DAKOTA

Medical Liability Reform: Collateral Source Rule Reform: S.D. Codified Laws § 21-3-12.  Permits the admissibility of evidence of collateral source payments when the claimant alleges special damages that are or will be paid by insurance, are not subject to subrogation, and are not purchased privately or by government programs. 

TENNESSEE

Medical Liability Reform: Collateral Source Reform: Tenn. Code Ann. § 29-26-119.  Provides for economic damages to be offset in medical liability cases by collateral sources, except for sources including the assets of the plaintiff and the immediate family, or insurance purchased by the plaintiff in whole or in part. 

UTAH

Medical Liability Reform: Collateral Source Rule Reform: Utah Code Ann. § 78-14-4.5.  Provides for awards to be offset by collateral source payments, excluding any source for which a subrogation right exists and any amount paid by plaintiff or the immediate family to secure the benefit.

WASHINGTON

Medical Liability Reform: Collateral Source Rule Reform: Wash. Rev. Code Ann. § 7.70.080.  Permits the admissibility of evidence of collateral source payments in medical liability cases, except if the source is an insurance policy that the plaintiff or a member of the immediate family purchased with his or her assets.

WISCONSIN

Medical Liability Reform: Collateral Source Rule Reform: Wisc. Stat. Ann. § 893.55 (7).  Allows for the admissibility of “evidence of any compensation for bodily injury received from sources other than the defendant to compensate the claimant.”