Should accident victims recover the full amount of their bills
for hospital and medical treatment from those who injure them, or
only the amount of the bills actually paid by the victims and their
private health care insurers? What if those bills are paid entirely
by Medicare or Medi-Cal at a substantially discounted rate? By
unanimously voting to grant review of a San Diego appeals court
decision, Howell v. Hamilton Meats & Provisions (4th Dist.)
(2009), the California Supreme Court is likely to weigh in on these
issues and the high stakes battle between personal injury
plaintiffs and insurers of those who injure them.
After the precedent-setting decisions in Hanif v. Housing Authority
(1st Dist.) (1988) and Nishihama v. City and County of San
Francisco (1st Dist.) (2001), defendants often successfully filed
pre-trial motions limiting medical specials a plaintiff could
blackboard to the jury to the amount the plaintiff and her health
insurer paid to her doctors at the discounted rates contractually
negotiated between the doctors and the health insurer, not the much
higher rates the doctors billed the plaintiff's insurer.
Recent appellate decisions require trial judges to permit jurors to
receive into evidence the full amount billed by the plaintiff's
treating providers on the basis that the billed amount gives the
jury a more complete picture of the extent of plaintiff's
injuries. Defendants are still permitted to file post-trial motions
asking the judge to reduce the medical specials awarded by the jury
to the amount actually paid by the injured party.
The Howell court reached a different conclusion, holding that an
injured person who has insurance can collect the full amount billed
by her treating providers, with no post-trial reduction of the jury
verdict to the amount actually paid. Rebecca Howell, a San Diego
County woman who was seriously injured when a truck made an illegal
U-turn and hit her car, underwent spinal fusion surgeries and other
treatment at two hospitals. The trial judge reduced the jury's
award against the employer of the truck driver, Hamilton Meats,
from $190,000 the hospitals billed to Howell and her health insurer
to $60,000 the hospitals accepted from Howell's insurer. But
the Fourth District Court of Appeal said the company and its
insurer should pay the entire $190,000. The appellate court held
that the discount was a collateral source - "a direct result
of [Howell's] own thrift and foresight in procuring private
health insurance" - and Hamilton "should not garner the
benefits of Howell's providence."
Hamilton's attorney argued that Howell was not entitled under
Nishihama to recover the amount of the discounted medical bills
because she incurred no debt for the negotiated rate differential,
and her insurer did not pay that portion of her bills to the
hospitals. The Howell court disagreed, holding that when Howell
executed written financial agreements with the hospitals before she
received treatment from them, she became financially liable for the
full combined charges the providers billed for the services they
provided. The court also distinguished Hanif as a case involving a
discount paid by Medi-Cal. There was no evidence in Hanif that the
minor plaintiff was or would become liable for the difference
between the undisputed reasonable value of the medical services and
the amount Medi-Cal paid, and, as a minor, he also lacked the
capacity to enter into financial responsibility agreements with his
medical providers. Howell, on the other hand, was a privately
insured plaintiff who incurred personal liability for her medical
providers' usual and customary charges.
Until the Supreme Court expresses its opinion on the subject,
defense counsel may still file post-trial motions asking the judge
to reduce the medical specials awarded by the jury to the medical
bills actually paid by the patient in both private- and public-pay
cases. However, judges who grant motions in limine precluding
jurors from hearing evidence of medical expenses billed by the
plaintiff's doctors, but not actually paid, risk reversal on
appeal.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.