Insurance Write-Offs and the Personal Injury Plaintiff
Anyone who has dealt with health insurance companies either on a personal or a professional level is probably familiar with the insurance “write-off” for medical expenses. In a nutshell, the write-off is a contractual reduction in the amount that an insurance company is required to pay a medical care provider for services rendered on behalf of the insured. For the unsuspecting plaintiff’s attorney, however, the insurance write-off can be a potential stumbling block. It is important to be wary of attempts by the defense to limit the evidence of medical expenses to the net amount paid, rather than the gross medical expense charged by the provider. Although the specific issue of insurance write-offs has not been addressed by Indiana Courts, the existing statutes and caselaw support the proposition that the admission of insurance write-offs into evidence is improper, and that such evidence should be excluded.
At trial, the plaintiff should introduce the total medical bills into evidence in order to establish the reasonable cost of medical services; further, the plaintiff should attempt to keep the defense from putting in the insurance write-offs. A motion in limine is a useful pre-trial tool to accomplish this, and it can prevent the possibility having to argue about these issues in front of the jury. In the motion, the plaintiff should first argue that the Collateral Source Rule prohibits the introduction of insurance write-offs because they are a part of the insurance benefit for which the plaintiff has paid. In the absence of specific Indiana caselaw that addresses the insurance write-off, the plaintiff should also refer to Indiana cases which hold that the measure of damages for medical treatment is the reasonable value of the services, and not the actual amount paid. These cases complement the statutory analysis and strengthen the argument that the introduction of the insurance write-off is improper.
Additionally, the plaintiff may make policy arguments that the principles of subrogation help to defray any purported windfall to the plaintiff for damages recovered above and beyond the actual amounts paid by the insurance company. More importantly, the existence of a contractual relationship between an insurer and an insured plaintiff is wholly independent of the defendant tortfeasor, and the defendant should not be exculpated from the full extent of liability on that basis. To hold otherwise would have the effect of punishing the plaintiff who has obtained medical insurance and would deprive the plaintiff of a fair and reasonable award for damages.
