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Shell v. Rock Creek Nursing Center, Inc.

August 5, 2020

In Shell v. Rock Creek Nursing Center, Inc., the plaintiff suffered a serious injury while she was a resident at the long-term care facility, Rock Creek Manor.  As a result of that injury, the plaintiff spent several days at the hospital, during which time she accrued nearly $60,000 in medical bills.   Because the plaintiff was a participant in the Medicare program, the hospital accepted $10,000 from Medicare as full payment of the plaintiff’s bills and “wrote off” the remaining balance.   Plaintiff then filed an action for negligence against Rock Creek Manor and, despite the hospital’s acceptance of only $10,000 as full payment, claimed the full cost of her medical bills as damages.  Defendant filed a motion to preclude the plaintiff from seeking the full amount of her medical costs and argued that she should only be allowed to recover the amount that the hospital accepted as full payment from Medicare.  The Superior Court did not agree.  It held that under D.C. law an injured person was entitled to recover in full regardless of any payment made to the injured party from a “collateral source.”  A “collateral source,” the Court noted, was: (1) any source of payment wholly independent from the defendant, or (2) any payment made by a person or company with whom the plaintiff had contracted to provide payment in the event she was injured – e.g. an insurance company.   Looking to the second type of “collateral source,” the Court held that the plaintiff had “contracted” with – i.e. made financial contributions to – Medicare to provide coverage and therefore could seek the full amount of her medical bills.  More specifically, plaintiffs paying into Medicare should be able to sue for the entire amount of their medical bills despite the actual payment to the hospital or provider under the Medicare reimbursement formula.