Q: Can injured P recover from D the full amount of a medical expense where insured negotiates for less than usual charges?
A: This very question is currently being reviewed by the California Supreme Court. A majority of other states view this "negotiated rate differential" as awardable to the P as collateral-source damages. The rationale is that a P's payment of insurance premiums for medical coverage should be viewed as an investment. The P's insurer in turn is able to use the premium dollars paid by many insureds to negotiate discount rates from medical providers. Non-cash consideration is received by the provider in addition to the case payment in the form of preferred provider designation, guaranteed payment, multiple patients and the like. As a matter of policy, the prudent P should receive the full fair market value of these services rather than allowing the tortfeasor to benefit from the discounted cash payment.
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A: Judges have options since the law is in flux.
Lately, Judges are allowing the presentation of the full amount to the jury, but reduce the award for the medical expense to the amount actually paid, after trial. This is important as damages for pain and suffering are often related to those for medical expenses.
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