First Quarter 2020


By: Rubina Khaleel


A Hennessy & Roach, P.C., seven state Liability Group analysis on the question of Collateral Source Issues related to Medical Bills, specifically, what is admissible before the jury?



The collateral source rule is a common law rule of evidence that bars evidence of compensation received by an injured party from a collateral source. Schonberger v. Roberts, 456 N.W.2d 201, 202 (Iowa 1990). The rule prevents the jury from reducing the tortfeasor’s obligation to make full restitution for the injuries caused by the tortfeasor’s negligence. Id. Although this rule has been modified by statute, see Iowa Code § 668.14 (1999), it continues to preclude evidence of payments made pursuant to any federal program for an injured person’s actual economic losses, see id. § 668.14(1).

An injured plaintiff may recover only the reasonable and necessary costs of medical care. See Stanley v. State, 197 N.W.2d 599, 606 (Iowa 1972). Therefore, the plaintiff has the burden to prove the reasonable value of the services rendered. See id.; Ege v. Born, 212 Iowa 1138, 1153, 236 N.W. 75, 82 (1931). The reasonable value of medical services can be shown by evidence of the amount paid for such services or through the testimony of a qualified expert witness. Stanley, 197 N.W.2d at 606; Arnold v. Ft. Dodge, Des Moines & S. R.R., 186 Iowa 538, 547, 173 N.W. 252, 255 (1919). The amount charged, standing alone, is not evidence of the reasonable and fair value of the services rendered. Stanley, 197 N.W.2d at 606–07; Arnold, 186 Iowa at 547, 173 N.W. at 255. The billed amount is relevant only if that figure was paid or an expert witness has testified to the reasonableness of the charges. Arnold, 186 Iowa at 547, 173 N.W. at 255. We have consistently held that evidence of the amount charged will not, in the absence of proof of the reasonableness of the billed sum, support recovery of medical expenses. Stanley, 197 N.W.2d at 606–07; Ege, 212 Iowa at 1151–52, 236 N.W. at 82; Arnold, 186 Iowa at 547, 173 N.W. at 255. This court has also stated that the jury is not bound by the testimony of an expert with respect to the reasonable value of medical services, but “may use and be guided by their own judgment in such matters.” Ege, 212 Iowa at 1153, 236 N.W. at 82.