Potential Changes to the Collateral Source Rule in Missouri

Katherine M. Flett

By Katherine M. Flett

Authored by Katherine M. Flett with assistance from Haley E. Gassel, law clerk

personal injuryThe Missouri House is considering a bill that would modify the determination of when evidence of collateral source payments in civil actions is admissible. Sponsored by Representative Alex Riley, Missouri House Bill 577 (HB 577) seeks to amend the Missouri Collateral Source Rule 9 (Section 490.715, RSMo.) and clarifies that the rule applies only to parties named in the plaintiff’s case. Approved by the House Committee and placed back on the formal perfection calendar in May, the bill is waiting to be placed on the House Formal Calendar for floor debate.

Proposed Changes to the Missouri Collateral Source Rule

HB 577 states that “in any action wherein a plaintiff seeks to recover for personal injury, bodily injury, or death, any party may introduce evidence of the actual cost of the medical care or treatment rendered to a plaintiff, or to the person for whose injury or death plaintiff seeks to recover.” It goes on to explain that “actual cost of the medical care or treatment shall be reasonable, necessary, and a proximate result of the negligence or fault of any party.”

The exception to this rule is Subsection 2. Under the bill, any part or all of a plaintiff’s special damages paid for by the defendant, the insurer, and/or authorized representative, (or any combination of these) are not recoverable from the defendant in the plaintiff’s claims for special damages.

Another change to the rule involves which amounts billed can be submitted as evidence. Evidence of any amount billed for medical care or treatment that has been “discounted, written off, or satisfied by payment of an amount less than the amount billed” may be not be admitted. However, the actual cost of medical care or treatment provided and any contracted discounts, price reductions or write offs may be admitted as “evidence relevant to the potential cost of future treatment.”

Potential Effects of Changes to the Missouri Collateral Source Rule

Passage of HB 577 would have an immediate impact on personal injury litigation. Plaintiffs may be awarded less damages at trial than they currently can obtain for the value of the medical services they received. Missouri courts interpret Section 490.715, as it is currently written, to include evidence of the total amount charged for medical care or treatment.1,2

However, HB 577 attempts to limit parties from presenting the total amount charged by a healthcare provided for medical care or treatment if the bill has been reduced in any way. If a hospital or medical provider accepts any amount less than the billed amount as full payment, the jury may only consider that accepted amount, not the billed amount, when determining damages. For instance, if a plaintiff’s $20,000 medical bill is written down to $2,000, the value of the medical treatment presented to the fact-finder would be $2,000, not $20,000.

Another impact of House Bill 577 would be that plaintiff’s attorneys who employ the “Reptilian Approach” will likely be less successful. As discussed in “The Reptilian Response to Missouri’s New Collateral Source Rule”, the reptilian approach in this context is as follows: Rather than introducing client’s actual medical bills, the plaintiff’s attorney introduces evidence of drastic injury and immense pain and suffering to influence the jury’s decision to award damages not consistent with the actual cost of treatment provided. However, under HB 577, any party, including the defense, may introduce evidence of the actual cost of the medical care or treatment rendered to a plaintiff. Therefore, a defense attorney may choose to introduce evidence of the actual cost of treatment to combat the reptilian approach.

If  Missouri House Bill 577 passes, its proposed changes to the Collateral Source Rule could have far-reaching effects.

Posted by Attorney Katherine M. Flett and Haley E. Gassel. Flett is a member of the litigation team whose primary focus is on assisting clients in insurance defense, business litigation, employment law, and bankruptcy matters. Gassel, law clerk, is a student at Saint Louis University School of Law and is a graduate of Murray State University.

1 Brancati v. Bi-State Dev. Agency, 571 S.W.3d 625, 635 (Mo. Ct. App. 2018)

2 Lowe v. Mercy Clinic E. Communities, 592 S.W.3d 10, 26 (Mo. Ct. App. 2019)

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