From Leighton v. CSX, COA, Published 3/11/2011
Kentucky’s Supreme Court recently explained the collateral source rule as follows.
It is improper to reduce a plaintiff's damages by payments for medical treatment under a health insurance policy if the premiums were paid by the plaintiff or a third party other than the tortfeasor. The collateral source rule, as this rule is commonly known, allows the plaintiff to (1) seek recovery for the reasonable value of medical services for an injury, and (2) seek recovery for the reasonable value of medical services without consideration of insurance payments made to the injured party. The collateral source rule has long been followed in Kentucky.
Baptist Healthcare Systems, Inc. v. Miller, 177 S.W.3d 676, 682-83 (Ky. 2005) (emphasis supplied)(footnotes omitted). By this definition, if the premiums were paid by the tortfeasor-employer in this case, the collateral source rule would not apply. Although Baptist Healthcare was not a FELA case, it is consistent with § 5 of the Act. But federal courts interpreting FELA do not end the analysis there. Instead, “[a]pplication of the collateral source rule depends more upon the character of the benefits than upon the source of the funds.” Patterson v. Norfolk and Western Ry. Co., 489 F.2d 303, 308 (6th Cir. 1973) (FELA case).
