The Idaho Supreme Court affirmed a district court ruling on Jan. 22, 2026, that awarded attorney fees and costs to a patient who successfully defended against a medical debt collection lawsuit brought by Medical Recovery Services LLC and Intermountain Emergency Physicians PLLC.
In the case *Medical Recovery Services, LLC v. Wood*, the state's highest court upheld Bingham County District Judge Darren B. Simpson's order finding that Taylor L. Wood was the prevailing party in the collection action and was entitled to recover her legal expenses from the medical debt collectors.
The dispute arose from a complex medical billing situation involving Wood as a patient, Medical Recovery Services as a debt collection company, and Intermountain Emergency Physicians as the medical practice. Medical Recovery Services, an Idaho limited liability company, initially sued Wood to collect on alleged medical debts. Wood then filed counterclaims against the collection agency and brought third-party claims against Intermountain Emergency Physicians.
The case proceeded through the Seventh Judicial District Court in Bingham County, where Judge Simpson ultimately determined that Wood had prevailed in the litigation. Under Idaho law, prevailing parties in certain types of cases may recover their attorney fees and costs from the losing party, particularly in collection actions and contract disputes.
Medical Recovery Services and Intermountain Emergency Physicians appealed the district court's decision, challenging both the determination that Wood was the prevailing party and the award of attorney fees and costs. However, Idaho Supreme Court Justice Zahn, writing for the court, affirmed the lower court's ruling without reversing any aspect of the decision.
The case highlights ongoing issues in medical debt collection practices in Idaho and across the United States. Medical debt collection has become increasingly common as healthcare costs rise and patients struggle to pay emergency room bills and other medical expenses. Collection agencies like Medical Recovery Services often purchase debts from healthcare providers or work on their behalf to pursue payment from patients.
Patient advocates have raised concerns about aggressive collection practices by medical debt collectors, particularly when patients may dispute the validity of charges or the amount owed. In some cases, patients successfully challenge collection actions by raising defenses such as billing errors, insurance coverage disputes, or violations of debt collection laws.
The Idaho case appears to represent a situation where the patient was able to not only defend against the collection action but also recover her legal expenses from the collectors. This outcome suggests that Wood's legal position was strong enough that she was deemed the prevailing party under Idaho's prevailing party statute.
Attorney Bryan D. Smith of Smith, Driscoll & Associates PLLC represented the appellants Medical Recovery Services and Intermountain Emergency Physicians. Smith submitted arguments on behalf of the medical debt collectors challenging the district court's ruling.
Larren K. Covert of Wilkerson Law Group in Idaho Falls represented Wood in the appeal. Covert successfully defended the district court's determination that his client was entitled to attorney fees and costs.
The case was heard during the Idaho Supreme Court's August 2025 term in Boise, with the opinion filed in January 2026. Melanie Gagnepain served as the court clerk for the proceedings.
While the full text of the Supreme Court's opinion was not immediately available, the affirmance suggests that the justices agreed with the district court's analysis of the prevailing party determination and the appropriateness of the fee award. The decision could have implications for future medical debt collection cases in Idaho, particularly regarding when patients who successfully defend against collection actions may recover their legal expenses.
The ruling also underscores the importance of careful legal strategy in medical debt disputes. Patients facing collection actions may have various defenses available, and in some cases, successful defense of such actions can result in recovery of attorney fees and costs from the collectors.
For healthcare providers and collection agencies operating in Idaho, the decision serves as a reminder that collection actions must be pursued carefully and that unsuccessful collection efforts may result in liability for the opposing party's legal expenses. The case demonstrates that patients are not without recourse when facing medical debt collection actions and that vigorous defense of such cases can sometimes result in favorable outcomes for patients.
The *Medical Recovery Services* decision adds to Idaho's developing body of law regarding medical debt collection practices and prevailing party determinations in healthcare-related litigation. As medical debt continues to be a significant issue affecting Idaho residents, this case may provide guidance for future disputes between patients and medical debt collectors in the state's court system.