Louisiana Supreme Court Speaks – Attorney Discounts are Not Collateral Sources

In a matter of first impression, the Louisiana Supreme Court has ruled that the collateral source rule does not apply to attorney-negotiated discounts. As such, the defendant tortfeasor is only responsible for the actual amount paid by the plaintiff to the provider, and the plaintiff cannot recover the amounts that are written off as discounts. In Hoffman v. 21st Century, 2015 WL5776131 (La. 10/2/15), the plaintiff attempted to recover $3,000 charged by an MRI facility when the records showed that the only $950.00 was paid to the provider. The remainder of the balance was written off as an attorney discount. The plaintiff argued that the collateral source rule applied because he diminished his patrimony by virtue of his contractual obligation to pay attorney fees, but the Court rejected this argument.

It will be interesting to see if the plaintiff’s bar and medical providers heavily involved in personal injury claims will modify their practices in an attempt to get around the Court’s decision in Hoffman.

Gerard J. Dragna