Collateral Source Rule Does Not Apply to Medicare Payments

On July 28, 2015, the State of Delaware’s Supreme Court found that the collateral source rule does not apply to payments made by Medicare in the case of Honey v. Bayhealth, et.al.

The collateral source rule prohibits the admission of evidence that the plaintiff or victim has received compensation from some source other than the damages sought against the defendant. Recently in Delaware, the Supreme Court in Stayton v. Delaware Health Corp., 2015 WL 3654325, (June 12, 2015) found that an injured Plaintiff’s damages stemming from the costs of medical treatment are limited to amounts actually paid by Medicare, rather than the amounts billed to Medicare.

During the Supreme Court’s consideration of that issue in the more current case of Honey v. Bayhealth, et.al, the Court found that Bravo Health (Honey’s Medicare Advantage insurer), and other Medicare Advantage insurers are within the larger Medicare system. Therefore, as a component of Medicare, Honey’s damages stemming from medical expenses were limited to amounts actually paid by Bravo Health.

For a full case summary, click here >>