Collateral Source Analysis
Collateral source analysis addresses the effect of insurance, public benefits, or third-party payments on damages, depending on the jurisdiction's collateral source rule.
When it is used
Collateral source analysis is used where jurisdictional rules permit or require offsets for insurance or benefit payments related to the injury.
Step-by-step
- Identify jurisdictional collateral source rules (traditional, modified, or statutory offset)
- Catalog relevant collateral payments (private health insurance, Medicare, Medicaid, LTD, workers' compensation)
- Compute net damages in compliance with jurisdictional rules
Data sources
- Jurisdictional statutes and case law
- Actual insurance benefit records
- CMS Medicare Secondary Payer Act guidance where applicable
Limitations
Rules vary substantially by jurisdiction. Misapplication can lead to admissibility issues or reversal on appeal.
Admissibility
Collateral source admissibility is largely governed by jurisdictional rules rather than methodology disputes.
Frequently Asked Questions
What is the traditional collateral source rule?
The traditional rule prevents a tortfeasor from benefiting from compensation the plaintiff received from independent sources such as insurance (Restatement (Second) of Torts sec. 920A (1979)). Many jurisdictions have modified or abrogated this rule by statute.
References
- Centers for Medicare & Medicaid Services. (n.d.). Medicare secondary payer. U.S. Department of Health and Human Services. cms.govGovernment
- Medicare Secondary Payer provisions, Social Security Act, United States Code (2018). law.cornell.eduCase Law
- Restatement (Second) of Torts sec. 920A (Am. L. Inst. 1979). law.cornell.eduCase Law
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