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AN INJURED PLAINTIFF MAY NOT RECOVER PAST MEDICAL EXPENSES BEYOND THOSE ACTUALLY PAID OR DUE TO BE PAID
Howell v. Hamilton Meats & Provisions, Inc.
(California Supreme Court, August 18, 2011)
In Howell v. Hamilton Meats & Provisions, Inc., the California Supreme Court explained that “[w]hen a tortiously injured person receives medical care for his or her injuries, the provider of that care often accepts as full payment, pursuant to a preexisting contract with the injured person’s health insurer, an amount less than that stated in the provider’s bill.” The Court addressed the issue of whether, in this circumstance, the injured person may recover from the tortfeasor, as economic damages for past medical expenses, the undiscounted sum stated in the provider’s bill but never paid by or on behalf of the injured person. The Court held that “no such recovery is allowed, for the simple reason that the injured plaintiff did not suffer any economic loss in that amount.”
In so holding, the Court addressed the application of the collateral source rule, which precludes a plaintiff’s damages from being reduced by amounts the plaintiff has received from sources independent of the tortfeasor, such as health insurance. The Court stated that the collateral source rule “has no bearing on amounts that were included in a provider’s bill but for which the plaintiff never incurred liability because the provider, by prior agreement, accepted a lesser amount as full payment.” Such sums “do not represent an economic loss for the plaintiff” and therefore “are not recoverable in the first instance.” “The collateral source rule precludes certain deductions against otherwise recoverable damages, but does not expand the scope of economic damages to include expenses the plaintiff never incurred.”
The debate in the legal community leading up to this decision focused on whether the Supreme Court would permit the injured plaintiff to recover the amount billed by the medical service provider or whether the Court would limit the recovery to the amount actually paid. Many commentators expected the Court to take a middle ground by allowing a plaintiff to recover the reasonable value of medical services, which would perhaps be a value somewhere between the amount billed and the amount actually paid. To the contrary, the Court now holds that “the general rule under…California law, is that a personal injury plaintiff may recover the lesser of (a) the amount paid or incurred for medical services, and (b) the reasonable value of the services.” (Italics in original; bold added.) Thus, the Supreme Court’s holding is certainly to be regarded as a victory for defendants and their insurance carriers.
With regard to the application of the Court’s holding in the setting of trial, the Court states that “when a medical care provider has, by agreement with the plaintiff’s private health insurer, accepted as full payment for the plaintiff’s care an amount less than the provider’s full bill, evidence of that amount is relevant to prove the plaintiff’s damages for past medical expenses and, assuming it satisfies other rules of evidence, is admissible at trial. Evidence that such payments were made in whole or in part by an insurer remains, however, generally inadmissible under the evidentiary aspect of the collateral source rule.”
Time sensitive note: Should you have been involved with any very recent litigation where a trial jury has heard evidence of the amount accepted as full payment by the medical provider but has awarded a greater sum as damages for past medical expenses, please note the Supreme Court’s comment: “[T]he defendant may move for a new trial on grounds of excessive damages. (Code Civ. Proc., § 657, subd. 5.) A nonstatutory “Hanif motion” is unnecessary. The trial court, if it grants the new trial motion, may permit the plaintiff to choose between accepting reduced damages or undertaking a new trial. (Id., § 662.5, subd. (b).)”
Should you desire a copy of the Supreme Court’s decision or any other additional information, please feel free to contact us.
David V. Moore
Frank T. Sabaitis
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