Collateral Source Rule Approaches and Its Implications for Usual, Customary and Reasonable Pricing

The Collateral Source Rule is a legal doctrine that holds if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would otherwise collect from the tortfeasor. This longstanding rule in civil procedure has been recently challenged in courts and state legislatures throughout the United States in the presentation of evidence regarding past and future medical expenses. As healthcare costing has become increasing complex, some courts have allowed evidence to be presented to the jury about reduction in plaintiff’s medical expenses based upon amounts paid by third party vendors. As such, life care planners have experienced the impact of the various approaches by state courts when presenting testimony about future medical expenses contained in the life care plan. This article discusses the current approaches by state courts in the United States and the implications collateral source rule approaches may have on the work of life care planners.