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A write-off means removing an asset from the books, especially as a loss or expense, while to “deduct” an item means to subtract it from gross income or adjusted gross income when calculating taxable income.

In personal-injury cases, an injured party is entitled to recover necessary and reasonable expenses arising from the injury, including the reasonable value of the medical care required to treat the injury. For purposes of assessing damages in a personal injury case, a “write-off” is the difference between the original amount of a medical bill and the amount accepted by the medical provider as the bill’s full payment. Write-offs raise the question of how to determine the reasonable value of medical care.

There used to be some confusion over whether the collateral-source rule, which “prevents the jury from learning about a plaintiff’s income from a source other than the tortfeasor so that a tortfeasor is not given an advantage from third-party payments to the plaintiff” and works by excluding “evidence of benefits paid by a collateral source. Robinson v. Bates, 112 Ohio St.3d 17, 2006-Ohio-6362, 857 N.E.2d 1995 (at ¶¶11, 16). 

Ultimately, the court in Robinson concluded that the common law collateral-source rule did not operate to exclude evidence of write-offs because a write-off is not a payment, and therefore does not constitute payment of a benefit. As such, the court surmised evidence of write-offs can be admitted to help evaluate the reasonable value of medical expenses because the tortfeasor “does not obtain a credit” therefrom.

[Last updated in October of 2021 by the Wex Definitions Team]