Determining the Reasonable Value of Medical Care in Personal Injury Cases and Medical Malpractice: A New Cost-Based Model

For over five decades, there has been an ongoing legal debate concerning the assessment of economic damages in personal injury cases. Determining economic damages that may be recoverable requires the reasonable value of the plaintiff’s medical care to be established.
Plaintiff and defense attorneys hold two distinct views regarding the concept of reasonable value. Plaintiff attorneys assert the basis for establishing reasonable value should be billed charges, while defense attorneys believe the amount paid should determine reasonable value. Complicating the issue is the collateral source rule, which prohibits courts from considering health insurance payments, or other payments, made on behalf of the plaintiff. This paper reviews issues pertaining to the concept of reasonable value and presents a new cost-based model for establishing the reasonable value of medical care that overcomes the limitations of previous approaches using methods that do not violate the collateral source rule.