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Many times when a plaintiff answers Form Interrogatory 6.4, responds to requests for production of medical bills or prepares a settlement demand, they use the total medical bill without any regard to if the bill has been reduced or paid by another.  This is because of the collateral source.  The collateral source rule, which is a rule of evidence, states that

“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 otherwise collect from the tortfeasor… [It] expresses a policy judgment in favor of encouraging citizens to purchase and maintain insurance for personal injuries and for other eventualities. Courts consider insurance a form of investment, the benefits of which become payable without respect to any other possible source of funds. If we were to permit a tortfeasor to mitigate damages with payments from plaintiff’s insurance, plaintiff would be in a position inferior to that of having bought no insurance, because his payment of premiums would have earned no benefit. Defendant should not be able to avoid payment of full compensation for the injury inflicted merely because the victim has had the foresight to provide himself with insurance.  Helfend v. Southern California Rapid Transit Dist. (1970) 2 C3d 1, 6-10 (pdf)

Because of the collateral source rule courts found that defendants could not discover whether or not any of plaintiff’s medical bills were paid by the plaintiff’s insurance, the medical treaters reduced their bill or there was gratuitous medical treatment.  See Weil and Brown, Civil Procedure Before Trial (TRG 2012) ¶ 8:96.

Last year, the California Supreme Court in Howell v. Hamilton Meats & Provisions (2011) 52 C4th 541 (pdf) punched a hole in the collateral source rule by limiting plaintiff’s recovered damages to the actual economic loss incurred.   The Supremes held 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. Howell at 567

Since what plaintiff’s actual medical costs incurred is now admissible, it is now discoverable.

SEE: Jefferson’s California Evidence Benchbook (CEB 2013) §36.40-36.45 for more discussion.

  • On April 8, 2013 the First District Court of Appeals in Luttell v. Island Pacific Supermarkets, Inc., 13 C.D.O.S. 3838, expanded Howell v. Hamilton Meats & Provisions in holding that Plaintiff is entitled to recover only medical expenses actually paid to medical providers for treatment of injuries, not amounts billed to Medicare and Medi-Cal.

  • In Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, the CA Supreme Court held that the plaintiff claiming medical expense damages “whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial.” However, Plaintiff could still present the full amount of medical bills paid for other purposes, such as to determine the future medical expenses and (2) pain and suffering.

    The Court of Appeal, Second Appellate District, Division Three filed its decision in Corenbaum v. Lampkin, B236227, on April 30, 2013. The court ruled evidence of billed (but not paid) past medical expenses is not relevant in determining the amount of non-economic damage suffered by the plaintiff. Becasue of this ruling, it is unlikeyl that personal injury Plaintiff’s will be able to admit into evidence the full amount of billed medical bills.

  • Craig M. Peters wrote an article in Plaintiff Magazine titled “Don’t be chicken, keep fighting–Howell and Corenbaum–what they say (and don’t say) about the reasonable value for medical services” which gives a plaintiff perspective on these cases.