“Did you just double-dip that chip?”
“You double-dipped the chip.”
“Double-dipped? What are you talking about?”
“You dipped the chip, you took a bite, and you dipped again.”
“That’s like putting your whole mouth right in the dip. Look, from now on when you take a chip, just take one dip and end it.”
“Well, I’m sorry Timmy, but I don’t dip that way.”
“Oh, you don’t, huh?”
“No. You dip the way you want to dip, I’ll dip the way I want to dip.”
– Timmy and George, Seinfield in “The Implant”
When a patient has insurance (or receives Medicare), often a medical provider will not receive payment for the full amount he or she bills the patient. The amount of the bill not paid by an insurance policy (or Medicare) is written off by the doctor, who has negotiated contracts to accept a specific amount in satisfaction of provided medical services. Under the common law, these outside payments were considered a collateral source which could not be used by a defendant to reduce the value of plaintiff’s medical services. With Missouri Revised Statute §490.715 the Missouri General Assembly attempted to modify the collateral source rule to assist defendants in introducing evidence that the amount actually paid for medical services was the proper measure of damages at trial. However, all the legislature succeeded in doing was just creating an extra hoop for plaintiff’s counsel to jump through that would still allow plaintiffs to get the entire amount billed accepted into evidence alongside the defendant’s evidence of the amount actually accepted in full payment. With the most current proposed changes to §490.715 The Missouri General Assembly wants to only allow evidence of what was accepted as full payment for plaintiff’s medical services which would prevent plaintiffs from introducing any evidence of what amount was actually billed for the medical services plaintiff received. These proposals are currently pending before both the House and Senate of the Missouri Legislature. If enacted, the new version of §490.715 will in essence, cut plaintiffs off from introducing any evidence of the amount that was billed for the medical services plaintiffs received due to injuries caused by defendants. Instead the jury will only be able to consider the amount actually collected in full payment as evidence of the value of the medical services plaintiff received.
The Origin of the Collateral Source Rule
The collateral source rule has an English Common Law origin that can be traced back to 1823. Alexander Cornwell, Missouri Revised Statutes Section 490.715: §A Toothless Attempt to Limit the Recovery of Medical Expense Write-Offs, 76 Mo. L. Rev. 517 (2011), http://scholarship.law.missouri.edu/mlr/vol76/iss2/7. The general rule for damages in tort is that they should be compensatory only. Id. at 518. The purpose of compensatory damages is to make an injured plaintiff whole. Id. In its’ most current form the collateral source rule provides that if an injured party receives compensation for his or her injuries from a source independent of the defendant, the payment should not be deducted from the damages that the defendant must pay. Id. There are four general categories of independent sources:
- Insurance policies
- Employment benefits
- Social legislation benefits
So the collateral source rule operates as an exception to compensatory damages because it can result in double recovery and can be seen as having the effect of punishing the defendant rather than simply compensating the plaintiff. Cornwell, supra, at 519. The main complaint about the collateral source rule is that it allows the plaintiff to “double dip”, because plaintiff is compensated twice for the same injury – once by the collateral source and again by the defendant. The opposing view as to why the collateral source rule is needed is the “benefit of the bargain” theory. Id. at 520. This theory is based upon the idea that the plaintiff should receive any benefit that comes from having the foresight to purchase and maintain insurance. Id. When the defendant gets the benefit of plaintiff’s decision to buy insurance it relieves the defendant of the full responsibility for injuring the plaintiff. Id.
Prior to 2005, Missouri followed the common law collateral source doctrine that a wrongdoer is not entitled to have the damages to which he is liable reduced by proving that plaintiff has received or will receive compensation or indemnity for the loss from an outside or collateral source. Cornwell, Missouri, supra at 524. Then in 2005, the Missouri legislature enacted a large amount of tort reform legislation which included an attempt to limit the application of the collateral source rule in Missouri. Id. at 225. Missouri Revised Statute §490.715 was enacted as a part of this tort reform legislation for the purpose of creating a presumption that the value of medical services is the amount actually accepted by healthcare providers in satisfaction of a debt. Id. at 525.
Missouri Revised Statute Section 490.715 states as follows:
Damages paid by defendant prior to trial may be introduced but is waiver of credit against judgment—evidence of medical treatment rendered permitted, when (collateral source rule modified).
- 490.715. No evidence of collateral sources shall be admissible other than such evidence provided for in this section.
- If prior to trial a defendant or his or her insurer or authorized representative, or any combination of them, pays all or any part of a plaintiff’s special damages, the defendant may introduce evidence that some other person other than the plaintiff has paid those amounts. The evidence shall not identify any person having made such payments.
- If a defendant introduces evidence described in subsection 2 of this section, such introduction shall constitute a waiver of any right to a credit against a judgment pursuant to section 490.710.
- This section does not require the exclusion of evidence admissible for another proper purpose.
- (1) Parties may introduce evidence of the value of the medical treatment rendered to a party that was reasonable, necessary, and a proximate result of the negligence of any party.
(2) In determining the value of the medical treatment rendered, there shall be a rebuttable presumption that the dollar amount necessary to satisfy the financial obligation to the health care provider represents the value of the medical treatment rendered. Upon motion of any party, the court may determine, outside the hearing of the jury, the value of medical treatment rendered based upon additional evidence, including but not limited to:
(a) The medical bills incurred by a party
(b) The amount actually paid for medical treatment rendered to a party
(c) The amount or estimate of the amount of medical bills not paid which such party is obligated to pay to any entity in the event of a recovery
Notwithstanding the foregoing, no evidence of collateral sources shall be made known to the jury in presenting the evidence of the value of the medical treatment rendered.
Mo. Rev. Stat. §490.715 (2015)
Obviously, the Missouri General Assembly intended to create a presumption against the admission of anything other than the actual amounts billed the plaintiff for his or her medical care at trial. What they ended up with was a rebuttable presumption that can easily be overcome by a plaintiff with a little effort.
The Rebuttable Presumption Under Deck V. Teasley
There has been a hodgepodge of interpretations of §490.715 in Missouri courts. Some circuit courts have interpreted the statute as limiting recovery to what has been incurred or paid, but others have not. Paul N. Venker, Recovery of Medical Expenses Under Section 490.715.5 RSMo Worth a Closer Look, Journal of the Missouri Bar, Jan-Feb. 2011, at 32. One circuit court judge has even held the statute unconstitutionally vague. Id. The case of Berra v. Danter, 299 S.W.3d 690 (Mo. App. E.D. 2009), has even been used by Plaintiff’s counsel to support recovery of the full dollar amount of medical treatment as supported by affidavits under §490.025, without any reduction for write-offs in the original amount on the bills. Id.
However, the Missouri Supreme Court has given us a framework in the case of Deck v. Teasley, 322, S.W.3d 536 (Mo. banc 2010), as to how §490.715 should be applied by Missouri Courts. In Deck, Plaintiff was appealing a jury verdict entered in her favor against Defendant in a negligence action arising out of an automobile accident. Id. at 537. Plaintiff had attempted to admit at trial testimony that the value of the medical treatment she received was the amount she was billed by her health care providers rather than the amount she actually paid for her medical services, but the lower court ruled this evidence was inadmissible. Id.
The Court first held that §490.715 is based upon the common law collateral source rule, but the statute modifies it in several ways. Deck, 322 S.W.3d at 538. The common law collateral source rule prevents a defendant from reducing their liability to a plaintiff by proving that payments were made to him or her by an outside source. Id. Subsection 2 of the statute allows a defendant who personally has paid (or by an insurer or representative has paid) all or any part of a plaintiff’s damages to introduce evidence that someone other than plaintiff paid the amount. Id. However, the statute does not allow the defendant to identify to the jury the source of that payment. Id. A defendant who elects to introduce that evidence then waives his right to a credit against a judgment as authorized by the statute. Id.
Subsection 5 of the statute concerns the admissibility of evidence regarding the value of medical treatment rendered to a party. Deck, 322 S.W.3d at 539. It states that evidence of the dollar amount paid to satisfy the medical provider’s services is admissible at trial and creates a rebuttable presumption that such amount represents the value of the medical treatment rendered. Id. Once this rebuttable presumption is created, plaintiff can file a motion to have the court determine if there is other evidence of value that is admissible at trial. Id. This other evidence may include:
- The medical bills incurred
- The amount actually paid for the medical treatment
- The amount or estimate of the amount not paid that such party is obligated to pay in the event of a recovery
Id. However, no matter what evidence is admissible at trial, neither plaintiff nor defendant can identify any outside person or party who paid for the medical treatment. Id.
Once this rebuttable presumption is created, it places the burden of producing substantial evidence to rebut the presumed fact on the party against who the presumption operates. Deck, 322 S.W.3d at 539. The trial court determines if the party seeking to rebut the presumption has presented substantial evidence that the value of the medical treatment rendered is an amount different from the dollar amount billed. Id. at 540. When substantial evidence is produced that rebuts the presumed fact, the jury decides the case on the basis of the evidence as if no presumption existed. Id. at 539. The jury considers the facts that gave rise to the presumption, as well as the facts that rebutted the presumption in making its decision as to the value of medical treatment received. Id.
In Deck, the court stated its belief that expert testimony submitted by the plaintiff that the total amount billed by the health care provider was fair, customary and reasonable, and considered to be what the services are worth, was a better indicator of the value of the services received, than the amount that was finally collected for plaintiff’s care. Deck, 322 S.W.3d. at 540-41.  Therefore, the court determined that the plaintiff in the Deck case should have been allowed to present evidence of the total amount of her medical bills to the jury. Id. at 543. The Supreme Court then remanded the case back to the lower court for a new trial on the issue of damages only. Id.
Leave Your Expert At Home, This Presumption Can Be Rebutted By Affidavit
However, it appears from Missouri case law that the rebuttable presumption created by §490.715 does not need an expert to be rebutted, but can be overcome by written affidavits submitted to the court under Missouri Revised Statute §490.525. Wheeler v. Phenix, 335 S.W.3d 504, 517 (Mo. App. S.D. 2011). Section 490.525 shows what is required when a party submits affidavits from medical providers to rebut the presumption under §490.715.
Affidavit stating amount charged was reasonable and necessary, effect—restrictions—service—counter-affidavit, requirements—notice.
Rev. Stat. Mo. §490.525
- This section shall apply to civil actions filed in any court of this state.
- Unless a controverting affidavit is filed as provided by this section, an affidavit that the amount a person charged for a service was reasonable at the time and place that the service was provided and that the service was necessary is sufficient evidence to support a finding of fact by a judge or jury that the amount charged was reasonable or that the service was necessary.
- The affidavit shall:
- Be taken before an officer with authority to administer oaths.
- Be made by the person or that person’s designee who provided the service.
- Include an itemized statement of the service and charge. 
Mo. Rev. Stat. §490.525 (2015).
The court held in Wheeler, that an affidavit properly submitted to the court under §490.525, provided sufficient evidence to rebut the presumption created by §490.715. Wheeler, 335 S.W.3d. at 518. Specifically, the Court noted that in Wheeler, the plaintiff submitted nine affidavits in compliance with §490.525, stating that that the amount charged was necessary and reasonable, that said charges represented the value of medical treatment rendered to the plaintiff despite the dollar amount billed to satisfy the financial obligation to the medical provider, and attached an itemized statement of services and charges to the affidavits. Id. at 517-18. Thus, the presumption that the amount billed plaintiff was the value of the medical services plaintiff received was rebutted, and plaintiff could introduce evidence of the full amount she was billed by her medical provider at trial as evidence of her damages. Id. at 518.
The Missouri General Assembly currently has bills pending in both in the House and Senate that are designed to abolish the Collateral Source Rule in Missouri. They are House Bill No. 596, and Senate Bill No. 227. As they both contain the same language, this article will only reference Senate Bill 227 as outlined below. Please note, the bold faced type highlights new language used in the statute.
SENATE BILL 227
Section A. Section 490.715, RSMo, is repealed and one new section enacted in lieu thereof, to be known as section 490.715, to read as follows:
- No evidence of collateral sources, pertaining to the cost of medical treatment, including medication, shall be admissible other than such evidence provided for in this section.
- If prior to trial a defendant or his or her insurer or authorized representative, or any combination of them, pays all or any part of a plaintiff’s special damages, such payment shall not be admissible or recoverable from that defendant.
- By virtue of subsection 2 of this section, a defendant shall not have any right to a credit against a judgment pursuant to section 490.710. Provided however, if such payments have been included in a plaintiff’s claim for special damages at trial, the defendant shall be entitled to deduct and receive a credit for such payments from any judgment as provided for in section 490.715.
- This section does not require the exclusion of evidence admissible for another proper purpose.
- (1) Except as provided in subsection 2 of this section, parties may introduce evidence of the cost of the medical treatment rendered or to be rendered to a party that was or will be reasonable, necessary, and a proximate result of the negligence of any party.
(2) For purposes of subdivision (1) of this subsection, the cost of any medical treatment rendered or to be rendered by a health care provider shall not exceed the actual dollar amounts paid for such medical treatment plus any unpaid or projected amounts to be paid by any source or combination of sources to satisfy the financial obligation to the health care provider for such treatment.
(3) Evidence presented to the jury of the case of medical treatment rendered or to be rendered shall be presented solely in terms of the part or projected actual cost necessary to satisfy the cost of such treatment or services pursuant to any agreement, contractual or otherwise, with the provider, and without reference to any billed charges in excess of such cost.
- B. No. 227, 98th Gen. Assemb. (Mo. 2015).
Under the new statute an irrebuttable presumption is created that the actual amount paid for the medical services is either:
- The actual dollar amounts plaintiff paid for his or her medical treatment
- Amounts that are still outstanding that the plaintiff is still financially responsible for paying at the time of trial
Plaintiff is barred from introducing any other sources regarding the value of any medical services they received as evidence of his or her damages at trial. If the medical provider accepts less than the billed amount in payment for their services to plaintiff, that amount is what will be admitted to the jury for consideration as to the value of plaintiff’s medical treatment. In short, the amount actually paid or expected to be paid for plaintiff’s medical services is admissible at trial, and the amount billed is not admissible at trial. The jury will never see the total value the medical provider placed upon their services to the plaintiff, but only the amount that was collected in full payment. This means the amount of damages that are permitted to be introduced at trial could be significantly lower than the actual damages suffered. These changes allow the defendant to obtain the benefit of plaintiff’s foresight to obtain insurance, and get a discount at any trial on the damages that the defendant has caused plaintiff. While the current version of §490.715 at least gives both parties a chance to admit all the evidence as to damages and allows a jury to decide what is fair, the proposed statute only gives the jury half the story as to plaintiff’s medical damages. This new statute may prevent plaintiffs from double dipping in their own bowl of dip, but allows defendants to take over half the dip from the plaintiff’s bowl, and walk away from the table without any repercussions.
 In 2003, the Missouri Supreme Court handed down Farmer-Cummings v. Personnel Poll of Platte Co., 110 S.W.3d 818 (Mo. banc 2003), in which the Court greatly limited the application of the collateral source rule in worker’s compensation cases. The Court held that if healthcare providers allowed write-offs and reductions in medical fees for their own purposes and the plaintiff is not subject to further liability for those write-offs, the plaintiff is not entitled to a windfall recovery for those write-off amounts. Id. at 823. However, Missouri Courts have declined to extend this ruling beyond actions involving worker’s compensation cases.
 It should be noted that pursuant to Mo. Rev. Stat. §538.305, §490.715 was intended to apply to all cases filed after August 28th, 2005.
 It should be noted that any medical bills satisfied by the Medicaid program are an entirely different animal. As a government benefit that is contingent upon the recipient’s financial need or special status, Medicaid is a collateral source that should not be disclosed to a jury. Lampe v. Taylor, 338 S.W.3d 350 (Mo. App. S.D. 2011).
 The party offering the affidavit in evidence or the party’s attorney shall file the affidavit with the clerk of the court and serve a copy of the affidavit on each other party to the case at least thirty days before the day on which evidence is first presented at the trial of the case. Mo. Rev. Stat. §490.525.4 (2015).