The Colorado Supreme Court has rejected a challenge to the collateral source rule and has ruled that a plaintiff may recover the full, not discounted, amount of medical bills in a personal injury case.
In Volunteers of America Colorado Branch v. Gardenswartz, Case No. 09SC20 (Col. Nov. 15, 2010) the court explained the purpose of the rule:
The rule’s purpose is to prevent a tortfeasor from benefitting, in the form of reduced liability, from compensation in the form of money or services that the victim may receive from a third-party source. See Quinones v. Pa. Gen. Ins.Co., 804 F.2d 1167, 1171 (10th Cir. 1986) (“The rule evolved around the commonsense notion that a tortfeasor ought not be excused because the victim was compensated by another source, often by insurance.”). Accordingly, the rule is somewhat punitive in nature. It prohibits the wrong-doer from enjoying the benefits procured by the injured plaintiff. If either party is to receive a windfall, the rule awards it to the injured plaintiff who was wise enough or fortunate enough to secure compensation from an independent source, and not to the tortfeasor, who has done nothing to provide the compensation and seeks only to take advantage of third-party benefits obtained by the plaintiff. See Van Waters & Rogers, Inc. v. Keelan, 840 P.2d 1070, 1074 (Colo. 1992) (“To the extent that either party received a windfall, it was considered more just that the benefit be realized by the plaintiff in the form of double recovery rather than by the tortfeasor in the form of reduced liability.”).