The attached case interpreting 735 ILCS 5/2-1205 is a bit complicated but extremely important and a huge step in the right direction for medical malpractice defendants. In my experience, it is almost never used by defendants and it should be. This is the first case in Illinois to really provide guidance on how to use this statute to reduce the amount of a verdict if that verdict is based on medical bills that are never actually paid.

Brief Law/Background: The collateral source rule bars the defense from introducing any evidence that a secondary/collateral source (i.e., an insurance company) paid less than the amount of a medical bill. The jury only gets to see the billed amount even if that amount is never paid. Section 2-1205 is an exception to the collateral source rule and allows a medical malpractice judgment to be reduced by the medical charges associated with the claim. The entire statute is cited in the case for your reference.

Brief Facts: A jury entered a verdict for $600,000 in a medical negligence case. $310,000 was awarded for medical bills. Blue Cross Blue Shield (BCBS) paid $134,604.85 of that bill. The defendants filed a motion to reduce the judgment pursuant to Section 2-1205. The trial court refused to reduce the verdict by any amount.

Holding: The Second District Appellate Court reversed and ordered the trial court to reduce the judgment by $175,066.15 (i.e., $310,000 (billed amount) – $134,604.85 (paid amount)). The Court reasoned that since BCBS paid $134,604.85, it potentially had a right to collect that amount back from the plaintiff after the verdict. Based on that, the Court allowed the plaintiff to keep that amount ($134,604.85) in case BCBS sought to collect that amount back from the plaintiff.

Bottom Line: Defendants have the burden to show certain things under the statute to be entitled to a reduction. This burden has to be met through the course of discovery (not after a trial) or else the reduction will not be allowed. The amount of the reduction in this case would have likely been even greater had the defendants established that BCBS agreed to collect only $89,736.56 of the $134,604.85 it paid. However, their showing was untimely. This statute has the potential to provide huge benefits to defendants where the medical bills are large and the paid amounts are small.
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