The Colorado Legislature has a bill in progress to modify the state's collateral-source rule. In prefacing the potential law, the Senate explained their overall outlook on auto accident liability. They acknowledge the devastating effects that are inflicted including death, severe injury, and property damage as a result of vehicle operator negligence. Another major concern is the increasingly heavy financial burden that responsible drivers face in auto insurance premiums that are partially caused by embellished and inflated billed amounts for medical care. These billed amounts are not reflective of true market pricing. The paid amounts are either discounted for cash payers or are reduced based on a contracted price between providers and insurers. In civil cases, the evidence entered is based on billed amounts rather than the paid amounts, thus contributing to higher premiums for Colorado drivers who are mandated to maintain coverage. They seek to find a medium where injured parties are fully compensated by negligent tortfeasors, without driving up insurance premiums for other drivers by windfalls benefiting plaintiffs and their attorneys.
Senate Bill 17-181
The collateral-source rule in civil cases prohibits informing the jury of any existing insurance coverage or other sources of compensation the plaintiff receives from the accident. This bill would allow for such details to be revealed unless the plaintiff:
- Agrees to have the jury award reduced by the amount paid to the plaintiff from collateral sources; OR
- Discloses their premiums paid or other contributions paid to these other sources.
The plaintiff may choose to invoke the collateral-source rule according to these conditions. If the defendant has been convicted or two or more alcohol-related offenses that led to injury, this modification to the bill would not apply in the case.
Colorado Collateral-Source Statute
In civil actions to seek damages for death, injury, or property damage, when a verdict is awarded, the amount is reduced based on amounts of compensation received from collateral sources. An exception exists when compensation received was the result of a contract the plaintiff entered and paid for. The “contract exception” to the collateral-source statute does not allow a defendant to reduce plaintiff awards by any amount received from private insurance, workers compensation, or other benefit of employment or pension. The plaintiff is eligible for the full amount of billed medical expenses, regardless of actual paid amounts or other ancillary benefits included in such contracts. Sources of free, or “gratuitous or charity” compensation received for the accident, which today would be Medicaid or charges waived from a charity hospital, would still be deductible from amounts of awards for damages.
Drivers have always had distractions from adjusting the radio, unruly kids, enjoying snacks and beverages, smoking etc. With such widespread mobile devices usage, the concept of “distracted driving” has risen to new heights. The good news for Colorado residents is The Law Firm of Jeremy Rosenthal is prepared to advocate for financial justice when a negligent driver has caused you to become an injury victim. Call the office at (303) 825-2223 for a consultation.