by Stephanie Rothberg (Orange Office)
CaliforniaThe California Supreme Court in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, recently limited the amount a plaintiff can recover for past medical damages to the amounts actually paid by an insurer as opposed to the full amount billed by the medical provider.  The Howell decision resolved a split in authority at the appellate level.
In Howell, plaintiff was injured in an automobile accident caused by a driver for defendant.  At trial, defendant filed a motion in limine to exclude evidence of plaintiff's medical bills that neither plaintiff nor her health insurer, PacifiCare, had paid.  For example, payment records indicated that bills from plaintiff's medical providers had been adjusted downward before payment pursuant to pacificare_logoagreements between those providers and PacificCare.  Defendant argued that because only the amounts paid by plaintiff and her insurer could be recovered, the larger amounts billed were irrelevant and should be excluded.  The trial court denied the motion.  Plaintiff presented evidence that her total medical care was $189,978.63 and the jury awarded that amount as damages.  Following trial, defendant moved to reduce plaintiff's damages by $130,286.90, the amount "written off" by plaintiff's medical care providers.  Plaintiff opposed on the grounds that such a reduction violated the collateral source rule ("if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor, such payment should not be deducted from the damages which the plaintiff would collect from the tortfeasor").  The trial court granted defendant's motion.  The Court of Appeals reversed and defendant appealed to the California Supreme Court.

The California Supreme Court held that an injured plaintiff whose medical expenses are paid through private insurance may recover no more than the amounts paid by plaintiff or her insurer for the medical services rendered.  The Court reasoned that its holding did not violate the collateral source rule as the discount provided to the medical insurer is not a benefit to the plaintiff in compensation for her injuries.  As such, evidence that a provider has accepted an amount less than the provider's full bill is admissible to prove plaintiff's damages.  However, evidence that such payments were made in whole or in part by an insurer is generally inadmissible pursuant to the collateral source rule.

stephanie-R--headshot-web-nameBased on the holding in Howell, defendants can now attempt to limit the amount of recoverable damages related to past medical to those expenses actually paid by an insurer.  As such, when calculating potential damages, it is important to distinguish between amounts paid by the insurer and plaintiffs themselves, versus the amount billed by the medical provider.

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