Who Benefits from Negotiated Discount on Medical Expenses?

It is well-established that medical services obtained without expense, obligation or liability to a plaintiff are not recoverable from a defendant in a personal injury case. Peterson v. Lou Bachrodt Chevrolet Co., 76 Ill. 2d 353, 363, 392 N.E.2d 1, 29 Ill.Dec. 444 (1979). But what if a plaintiff is billed for medical services in one amount, but the amount paid is less, due to a discount obtained by her insurance carrier? Who gets the benefit of the discount - the plaintiff or the defendant?

Despite an argument that plaintiff should not be entitled to damages greater than the amount she was obligated to pay, and any additional sums would be a windfall, the Illinois Appellate Court for the Third District has held that the defendant must compensate plaintiff at the higher, undiscounted amount.

The defendant may, if it chooses, dispute the amount originally billed as unreasonable (and for this purpose may present evidence that the health care providers accepted a reduced amount - which is the best indicator of reasonable value). But the plaintiff receives no "windfall" since, to the extent she receives an amount greater than that paid by her insurer in satisfaction of the bill, that difference is a benefit of her contract with the insurer, and not one bestowed on her by the defendant. Arthur v. Catour et al., No. 3-02-0810, 2004 Ill.App. LEXIS 17 (3d Dist. Jan. 2004).