California Court of Appeal Affirms Decision to Exclude Evidence of the Amount Paid by a Medical Financing Company to a Personal Injury Plaintiff’s Health Care Providers

In Moore v. Mercer (filed October 21, 2016, C073064), the California Court of Appeal, Third Appellate District, ventured “down the rabbit hole into the upside-down world of health care billing” and held that evidence of the total amount of money paid by a medical finance company to purchase liens for health care received by an injured Plaintiff is not admissible as evidence of the reasonable value of the services provided, where Plaintiff remained liable for the full amount billed.

Plaintiff, Lillie Moore, sustained injuries in an automobile accident caused by the Defendant, Richard Mercer. Ms. Moore was uninsured and received health care from several providers on a lien basis. A health care financing company, MedFinManager California, LLC (“MedFin”), bought Ms. Moore’s liens at a lesser amount than what was billed by the health care providers. During trial, defendant sought to introduce evidence of the amount paid by MedFin, as a means of demonstrating the reasonable value of the services rendered was substantially less than the billed amounts. The trial court granted the plaintiff’s motion in limine and excluded evidence of MedFin’s agreements with plaintiff’s providers, and the amounts MedFin paid to purchase the liens. The Court of Appeal Affirmed this aspect of the trial Court’s decision.

The Court of Appeal reasoned where, as here, the uninsured plaintiff remains fully responsible for the full amounts billed by the providers, California Evidence Code § 352 authorizes the trial court to exclude evidence of a health care financing company’s payments when admission of such evidence will necessitate undue consumption of time, confuse the issues, mislead the jury, or create a substantial danger of undue prejudice.

Both the trial court and the Court of Appeal noted the evidence might be probative, but determined it was nonetheless inadmissible on the ground it would “require litigating a vast number of collateral issues.” The Court of Appeal concluded by noting that such evidence is not inadmissible as a matter of law, but requires careful consideration of the specific facts in a given case. By this language, the Court effectively limited its decision to the present facts.

This case provides a bit of clarity for litigants seeking to prove, or rebut, the reasonable value of medical services provided to an injured Plaintiff. However, it follows in a long line of seemingly inconsistent and contradictory decisions of the California courts of appeal on this issue. These prior decisions have been discussed by this firm in the articles linked below.

(1) Ochoa v. Dorado
(2) Bermudez v. Ciolek ; and
(3) Uspenskaya v. Meline

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