California Appellate Court holds total amount of medical services billed by healthcare providers is inadmissible in determining damages for past medical expenses, future medical expenses and noneconomic damages.
In Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.App.4th 541, the California Supreme Court held that an injured plaintiff whose past medical expenses were paid by private insurance is limited in recovery for these services to 1) the amount actually paid or incurred and 2) the reasonable value of the services. Where a healthcare provider has entered into an agreement with the plaintiff’s insurance provider to accept discounted payments for services, a plaintiff is precluded from introducing the total amount of medical services billed by the provider as evidence of past medical expenses. Left undecided in Howell was whether a plaintiff could present evidence at the time of trial of the total amount billed for any other reason, including future medical expenses or general damages.
On April 30, 2013, California’s Second District Court of Appeal addressed those issues directly in Corenbaum v. Lampkin, 2013 Cal. App. LEXIS 342, holding that evidence of the total amounts billed for past medical services is irrelevant and inadmissible at the time of trial to determine damages for past medical services, damages for future medical care, and noneconomic damages. The Second District also held that evidence of the amount billed for past medical services cannot support an expert opinion on the reasonable value of future medical services.
The Second District reasoned that the pricing of medical services is highly complex and depends significantly on the identity of the payer (e.g., insured v. uninsured or private insurance vs. Medicare). Where a plaintiff has private insurance, the negotiated rate may be the best indication of the reasonable value of the services provided. If a healthcare provider has agreed to accept a negotiated rate the billed amount for particular services may not be representative of the cost of providing those services or their market value. In contrast, the Second District held that evidence of the amount actually accepted by healthcare providers as full payment is admissible provided that other evidentiary rules are met.
While it is almost certain that this decision will be appealed to the California Supreme Court, it is entirely uncertain whether the Supreme Court will accept the case or overturn the Appellate Court’s opinion. Until, and unless, it does, the progeny of cases expanding upon Howell continues to grow to further limit plaintiffs from presenting evidence of medical special damages that were not actually paid or incurred.
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