Tennessee Supreme Court Upholds Full Medical Bills for Injury Plaintiffs in Dedmon v. Steelman

In February 2010, Jean Dedmon was seriously injured in a car accident caused by John T. Cook. Her medical treatment extended well past the initial collision, culminating in neurosurgery in September 2010. By the time the case headed toward trial, her bills from sixteen medical providers totaled $52,482.87.

Because Dedmon carried health insurance, her insurers had negotiated discounted rates with those providers. The defense moved to exclude the full, undiscounted bills and limit damages to only the reduced amounts actually paid, arguing that the higher figures were never a real out-of-pocket cost to the plaintiff. The trial court sided with the defense and barred evidence of the full charges.

After the lawsuit was filed, Cook died, and in 2013 his personal representatives were substituted as defendants. The case continued through the Tennessee Court of Appeals and ultimately reached the Tennessee Supreme Court on a dispositive question: does the collateral source rule allow a plaintiff to introduce the full, pre-discount medical bills, or must damages be capped at what the insurer actually paid?

Glenn K. Vines, Mark N. Geller, Kevin N. Graham, and Jason J. Yasinsky of NST Law argued on Dedmon's behalf. They contended that the negotiated discount is a benefit Dedmon earned by paying insurance premiums, not a windfall that should flow to the defendant. The court agreed. Justice Holly Kirby, writing for a unanimous court on November 17, 2017, held that the collateral source rule applies in personal injury cases and that plaintiffs may submit the full, undiscounted bills as proof of reasonable medical expenses. The court distinguished a prior ruling that had limited recoverable amounts under the hospital lien statute, finding that statute inapplicable to ordinary tort claims.

The trial court's exclusion of the full bills was reversed, and the case was remanded for further proceedings consistent with the ruling. The decision set a binding statewide precedent: insurance discounts negotiated by a plaintiff's own carrier cannot be used to reduce what a negligent defendant owes.