On October 30, 2025, the Utah Supreme Court finally took a position regarding that state’s Collateral Source Rule and the recovery of medical expenses in tort cases. In Gardner v. Norman, 2025 WL 3030153 (Utah 2025), a unanimous court fundamentally reshaped Utah law governing the recovery of medical expenses and clarified the application of its collateral source rule. The Court held that the “negotiated charge” between a tort plaintiff’s health insurer and medical provider, not the gross amount originally billed, is the proper measure of the plaintiff’s recoverable special damages for past medical expenses. This ruling resolves years of uncertainty over whether plaintiffs could recover the full billed amount or only the amounts actually paid or owed, and it brings Utah firmly into the camp of states limiting recovery to amounts that reflect the plaintiff’s actual economic loss.
The facts in Gardner were typical of modern personal injury cases. Gardner suffered injuries caused by Norman’s negligence and sought to recover medical expenses as part of his personal injury claim. His medical providers initially billed gross charges for treatment, but those charges were later reduced under preexisting contractual agreements between his health insurer and the providers. The providers accepted the lower negotiated rates as payment in full and wrote off the remaining balance. The trial court permitted the plaintiff to introduce the full billed amounts as evidence of damages. On appeal, the question was whether Gardner’s recoverable medical expenses should be measured by the gross billed amount or the negotiated charges accepted by the providers.
In a clear and detailed opinion, the Utah Supreme Court concluded that the negotiated charge is the appropriate measure of recoverable special damages. The Court reasoned that the difference between the gross charge and the negotiated charge arises solely from the contractual relationship between the insurer and the healthcare provider. That contractual discount, the Court said, is not a loss caused by the tortfeasor’s conduct and therefore cannot be recovered as damages. As the court put it, “The negotiated charge between a tort plaintiff’s insurer and the plaintiff’s health care provider is the proper measure of plaintiff’s special damages for past medical expenses.” Allowing recovery of the higher gross billed amount would place the plaintiff in a better financial position than before the tort occurred, contrary to the compensatory purpose of tort damages.
The Court also examined the relationship between this rule and Utah’s long-standing collateral source rule. Utah’s common-law collateral source rule has both an evidentiary and a damages component. As an evidentiary matter, it precludes both explicit reference and indirect allusion to payments or benefits from collateral sources, such as insurance, to prevent prejudice or confusion among jurors. As a damages principle, it prohibits crediting a tortfeasor with payments made to or on behalf of the plaintiff by third parties not associated with the defendant. The Court reaffirmed both aspects of the rule but drew an important distinction between collateral source payments actually made and contractual write-offs or discounts that no one ever pays. The Court explained that admitting evidence of the predetermined reduction in billed amounts does not violate the collateral source rule when no one pays that difference, because the tortfeasor is not receiving credit for a third-party payment. The written-off portion of the bill is not a collateral source benefit; it simply represents a contractual adjustment that never constituted an economic loss to the plaintiff.
By drawing this line, the Court aligned Utah with the majority of jurisdictions that have concluded that contractual write-offs or negotiated discounts are not recoverable. These states reason that only amounts actually paid or owed represent the true measure of a plaintiff’s loss. A chart showing the law in this area in all 50 states can be found HERE. The Court also took note of the Legislature’s limited involvement in this area, observing that Utah’s statutory collateral source rule, Utah Code § 78B-3-405, applies only to medical malpractice actions. For all other tort actions, the common-law rule remains intact, but its reach does not extend to written-off medical charges.
The Gardner decision also puts to rest competing lower-court interpretations and federal predictions about Utah law. Before Gardner, Utah state courts had not directly addressed whether a plaintiff could recover written-off medical expenses. In Amos v. W.L. Plastics, Inc., 2020 WL 5074195 (D. Utah 2020), the U.S. District Court for the District of Utah had predicted that the Utah Supreme Court would likely follow the minority approach and allow recovery of the full billed amount, including write-offs. That prediction has now been definitively rejected. The Utah Supreme Court has clarified that a plaintiff’s recovery for past medical expenses must be limited to the negotiated or paid amounts, plus any out-of-pocket expenses such as co-pays and deductibles.
Practically speaking, Gardner changes how damages will be proved in Utah personal injury cases. Plaintiffs can no longer rely on gross medical bills to establish their economic losses; instead, they must present evidence of the amounts actually paid or still owed for medical services. Defendants, in turn, may introduce evidence of the negotiated charges as the proper measure of damages without violating the collateral source rule. The evidentiary boundaries of the rule remain firm: defendants still cannot mention insurance or who paid what, but they can introduce the negotiated charge as the reasonable value of the medical services rendered. The ruling thus preserves the integrity of the collateral source rule while preventing plaintiffs from recovering phantom damages based on amounts that were never paid.
The implications extend beyond private insurance cases. Although Gardner specifically addressed negotiated rates under private insurance contracts, the reasoning applies with equal force to other payors such as Medicare and Medicaid. The Court’s logic, that amounts written off pursuant to a preexisting payment arrangement are not losses caused by the tort, suggests that future Utah cases will likewise limit recovery for those programs to amounts actually paid or owed.
Gardner v. Norman marks a significant doctrinal shift in Utah’s treatment of medical expense recovery. It clarifies that Utah follows the “negotiated-rate rule”, reaffirms but narrows the reach of the collateral source rule, and aligns Utah law with the majority of jurisdictions that have moved away from inflated damage awards based on undiscounted medical bills. For subrogation practitioners, insurers, and litigants alike, the message is clear: in Utah, only real economic losses count, and a plaintiff may recover no more than the amount actually paid or owed for medical care arising from a tortious injury.
For a comprehensive overview of the laws in all 50 states addressing the pleading, proof, and recoverability of past medical expenses, the chart provided by Matthiesen, Wickert & Lehrer, S.C. serves as an excellent resource and can be found HERE. For questions regarding workers’ compensation subrogation in any state, contact Lee Wickert at leewickert@mwl-law.com
