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Who gets the benefit of insurance write offs?

October 22, 2008 | By Jeffrey Wing

In two recent rulings by the Oregon Court of Appeals, the court stated the plaintiff may prove and recover the full amount of their medical bills, even when a portion of those bills have been written off. In White v. Jubitz, 219 Or App 62 (2008), Mrs. White was injured on Jubitz's property and received medical care for which Medicare paid the bills at its reduced rate. In addressing the question of who gets the benefit of the "write offs", the court first found the full amount of the medical bills were "reasonable charges necessarily incurred" regardless of any amounts written off by the medical provider. The court went on to hold that "amounts later written off by a medical provider are collateral source benefits as contemplated by ORS 31.580" and thus the fact of the write off is not admissable at trial.

In the companion case of Cohens v. McGee, 219 Or App 78 (2008), medical bills were paid under the Oregon Health Plan. Just as in the Jubitz case, the court found that write offs were benefits covered under the collateral source rule and not admissable at trial. The court reasoned the OHP program is Oregon's Medicaid program, Medicaid is a Federal Social Security Program and, accordingly, OHP write offs are a Federal Social Security Benefit protected under ORS 31.580.

These decisions only deal with government-run health systems, but the reasoning behind the decisions should support injured people who have private health insurance as well. Where a private health insurer has paid the bills, the collateral source rule found in Oregon statutes, ORS 31.580, should still apply. The above decisions and the Oregon statutes protect victims of injury, and allow them to prove to the jury the full extent of their injury, even if some medical bills were paid, or written off, by their health insurance.

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