How Missouri Punishes Injury Victims Who Use Health Insurance

Posted by Christopher Allen | Aug 02, 2020 | 0 Comments

In 2017, Missouri again passed tort reform legislation further restricting compensation for injury victims. This included changes to Missouri's "collateral source rule" codified as RSMo 490.715. The changes to this rule caused significant disparities in the value of injury cases conditioned upon how medical bills get paid. The unfair effect of this law is obvious. The exact same case, with the exact same injury is given a different value depending on whether or what kind of health insurance is used to pay the medical bills. 

Most health insurance plans never pay the full amount of a medical bill. Instead they pay a small percentage of the bill and the medical treatment providers contractually "write off" or "adjust" the remaining balance owed. Different health insurance plans have different deductibles and "contractual write off" and "adjustment" amounts. The "contractual write off" or "adjustment" is applied because medical providers are required to apply them as part of the agreement to get paid by your health insurance company. 

The 2017 collateral source rule states that, at trial, any party may introduce evidence of the actual cost of the medical care or treatment. This is defined as "a sum of money not to exceed the dollar amounts paid by or on behalf of a plaintiff or a patient whose care is at issue plus any remaining dollar amount necessary to satisfy the financial obligation for medical care or treatment by a health care provider after adjustment for any contractual discounts, price reduction, or write-off by any person or entity." See RSMo 490.715(5)

For example, if you break your arm in a car accident, you go to the emergency room to get treated for your injury. The hospital sends you a bill for, let's say, $1000. You submit the hospital bill to your health insurance. You pay a $100 deductible and your health insurance pays $300. The hospital applies a “contractual write off” or "adjusts" the remaining $600.

So now, in our example, the $1,000 obligation owed to the hospital is satisfied for only $400 and the remaining $600 goes away. Under Missouri's collateral source rule imposed by the Missouri legislature, the reasonable value of the medical services rendered is now only $400. This means that if your case goes to trial, the jury will hear the evidence that your medical bill was $400 not $1000. This reduction in medical bills by using your health insurance significantly impacts the value of your case. That's because a case with a $400 medical bill is worth less in the eyes of a jury than the same exact case with $1000 in medical bills. You are not compensated for the years of past health insurance premiums you paid out and you are not compensated in the event your health insurance premiums go up. Instead, you are punished because using health insurance to pay medical bills lowers the value of your case. 

The powerful insurance company lobby pushed for the passage of this law because they wanted to capitalize on your use of your own health insurance to lower their exposure on your injury case. This law allows them to save money by paying less on jury awards and lawsuit settlements.   

The good news is that there are several ways to work around Missouri's unfair collateral source rule. Most importantly, when your injury is undisputedly someone else's fault, DO NOT use your health insurance. Contact an experienced lawyer who knows how to get around this unfair law to maximize the value of your case. 

If you are hurt because of someone else's negligence and you want to get the maximum value for your case, call us for a free consultation at 314-300-8380. 

About the Author

Christopher Allen

For over 24 years, Chris has successfully litigated serious accident cases throughout the region. He relentlessly advocates for victims of all walks of life. After working at a high volume personal injury law firm, he decided to open his own firm to better serve and dedicate his time to his indiv...


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