Smith v. Mahoney & Richards
150 A.3d 1200
| Del. | 2016Background
- Plaintiff Jennifer L. Smith was injured in two car collisions, incurred medical bills originally billed at $24,911, but her providers billed Medicaid and received $5,197.71; Medicaid asserted a lien for that amount.
- At trial Smith presented the providers’ standard charges to the jury (total $24,911) and the jury awarded $24,911 for past medicals, $10,000 for future medicals, and $15,000 for pain and suffering.
- Defendants appealed after the Superior Court, relying on Stayton and Rice, reduced past-medical damages to the amount Medicaid actually paid ($5,197.71) but left future medical damages intact.
- Core legal question: whether the collateral source rule permits a plaintiff to recover the difference between a provider’s billed charge and the reduced amount actually paid by Medicaid.
- Superior Court treated Medicaid like Medicare under Stayton: discounts under government fee schedules are paid by no one (benefit taxpayers), so past-medical damages are limited to amounts actually paid by the program; future-medical damages are not reduced because Medicaid eligibility is uncertain.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether collateral source rule allows recovery of write-offs when Medicaid paid past medicals | Smith: provider’s acceptance of Medicaid is a benefit to plaintiff; collateral source rule should allow recovery of full billed charges | Defendants: Medicaid write-offs are government-imposed discounts paid by taxpayers, not collateral benefits to plaintiff | Court: Collateral source rule does not apply; past medical damages limited to amount Medicaid actually paid |
| Whether Medicaid differs from Medicare for collateral-source purposes | Smith: Medicaid voluntary; providers can choose to accept Medicaid so acceptance is a patient benefit | Defendants: Choice is a provider business decision; discount benefits taxpayers like Medicare | Court: No material difference; Stayton rationale applies equally to Medicaid |
| Constitutional claims (jury right, due process, access to courts) | Smith: limiting recovery infringes jury factfinding and burdens access to courts | Defendants: No precedent supports a constitutional right to double recovery; access to courts not restricted | Court: Constitutional challenges rejected; no right to double recovery and access unaffected |
| Whether future medical damages should be reduced to projected Medicaid payments | Defendants: future damages should be limited by anticipated Medicaid reimbursement | Smith: future Medicaid eligibility uncertain; award should not be reduced | Court: Future medical expenses are not reduced because Medicaid eligibility and coverage are speculative |
Key Cases Cited
- Stayton v. Delaware Health Corp., 117 A.3d 521 (Del. 2015) (declined to apply collateral source rule to Medicare write‑offs; amount paid by Medicare conclusively establishes reasonable value of past medicals)
- Onusko v. Kerr, 880 A.2d 1022 (Del. 2005) (applied collateral source rule to gratuitous provider write‑offs)
- Mitchell v. Haldar, 883 A.2d 32 (Del. 2006) (applied collateral source rule to contractual private insurer rate reductions)
- Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2012) (government fee‑schedule discounts benefit the insurer/taxpayers, not the insured)