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Section 12-21-45 - Evidence that medical or hospital expenses to be paid or reimbursed admissible as competent evidence (a) In all civil actions where damages for any medical or hospital expenses are claimed and are legally recoverable for personal injury or death, evidence that the plaintiff's medical or hospital ...
The mechanics of this statute are that: (1) amounts paid to a plaintiff from a collateral source can and do reduce the amount of the verdict, and this reduction will be applied by the court following the jury verdict; (2) but in nearly all instances, evidence of payments from collateral sources will not be presented to ...
Collateral Source Rule and Exceptions At common law, Alabama recognized the collateral source rule and deemed evidence of a plaintiff's receipt of benefits from sources other than the defendant, such as medical insurance, to be inadmissible.
For example, if a health insurance policyholder is injured in an accident and the insurer pays $20,000 to cover the medical bills, the insurer may sue to collect that $20,000 from the at-fault party or that party's insurer.
In some cases, the collateral source exercises a lien or right of subrogation and is reimbursed for the overlap between the benefits and the damages. In many cases, however, the effect of the collateral-source rule is to allow victims to receive double compensation for their injuries.
The collateral source rule prevents the defendant from submitting evidence that your medical bills were covered by insurance. Likewise, the collateral source rule also prevents the defendant from trying to reduce the value of your claim because you received money from a third party.
A party is no longer permitted to board medical expenses that were not actually incurred or paid. If insurance was used for the care, any balance due is likely not appropriate to be included, as balance billing is generally not allowed to be presented.
The collateral source rule is a common law doctrine under which an injured party's damage award may not be reduced by payments, also intended to compensate the harm caused by the tortfeasor, received from third parties. Restatement (Second) of Torts § 920A cmt. b & d (1979).