Medical Bill Reimbursement in Personal Injury Cases

Understanding Hospital Bills in Personal Injury Cases

When you pay a hospital bill, the amount is often higher than what your insurance company pays due to pre-negotiated rates. In a personal injury case, if the bill is $10,000 but the insurance company only pays $5,000, what can you collect? This is complex, involving court cases, insurance contracts, and legal rules. Additionally, many health insurance policies require reimbursement from your personal injury recovery.

  Medicare and Medi-Cal have their own reimbursement rules as well.   

The Importance of High Medical Bills in Personal Injury Trials

There are strategic reasons to present high medical bills in a personal injury trial. Imagine a car accident case where the injury lawyer asks the jury to award a million dollars for pain and suffering. If the medical bills are $100,000, the requested damages for pain and suffering seem to align with the actual medical expenses.

Now, consider the likelihood of a million-dollar award if the medical bills shown to the jury are only $40,000. Higher medical bills can make a substantial pain and suffering award appear more justified and reasonable to the jury.

The law in this area strongly supports limiting the amount that you can recover and the amount that the jury is allowed to see.

In Katiuzhinsky v. Perry 152 Cal.App.4th 1288 (2007) the court supported the admissibility of the full billed amount to assess the reasonable value of past medical services if the plaintiff was uninsured and fully liable for the billed amount. But this area of law didn't stop in 2007.  

 One of the leading cases in personal injury law on the medical bill damage issue is Howell v. Hamilton Meats & Provisions, Inc., 52 Cal.4th 541 (2011)). This case is pivotal as it established that a plaintiff with private health insurance could not recover the negotiated rate differential as a medical expense and could only recover the amount that was actually paid or incurred for medical services. Following that the court in Corenbaum v. Lampkin, 215 Cal.App.4th 1308 (2013) further elaborated on Howell by holding that evidence of the full amount billed for past medical services was not relevant for determining damages for future medical expenses and was therefore inadmissible. It reinforced the idea that the reasonable value of medical services is limited to the amount actually paid or incurred. (See also: Moore v. Mercer, 4 Cal.App.5th 424 (2016))

Further limiting the right to document billed vs. paid expenses, the court in Pebley v. Santa Clara Organics, LLC, 22 Cal.App.5th 1266 (2018) clarified that for an insured plaintiff, the full amount billed for past medical services is irrelevant and inadmissible to prove past medical expenses and noneconomic damages.  

Pebley was based on yet another case Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311.  In that case the defendant argued that it was improper to rely on the amount of medical expenses incurred and expert testimony attesting to the fairness and reasonableness of the majority of those medical bills because the experts needed to do more to establish that their testimony was rooted in the “market value” of medical services.   Again, this is for an uninsured injured person.  The court in Bermudez said that:

 [T]he holding in Howell ultimately depended upon the "paid or incurred" prong of the test, not the "reasonable value" prong (Citations) . . . Howell offered no bright line rule on how to determine "reasonable value" when uninsured plaintiffs have incurred (but not paid) medical bills.  Bermudez, 1329.   So how then do you take a medical lien for car accident treatment that is not covered by insurance and tell the jury what the truly fair value is.  The court said that  “the measure of damages for uninsured plaintiffs who have not paid their medical bills will usually turn on a wide-ranging inquiry into the reasonable value of medical services provided . . .”  Bermudez, 1330-1331.

Pebley followed this approach and supported a “wide-ranging inquiry” (1278) to arrive at the reasonable value for “uninsured” plaintiffs. (1280) It gets more nuanced than that but the point is that an experienced personal injury attorney must be aware of the exceptions (or better termed nuances) as well.

Remember, a jury cannot hear is important not only because it effects the total dollar amount of compensation but also because it affects the presentation of evidence at trial. Higher dollar amounts for medical care sets a higher psychological bar for related pain and suffering damages.  So the Howell issue (as it is called in legal shorthand) can be very important in many accident cases.
 

Daniel Horowitz: Nationally Recognized Personal Injury Lawyer

Daniel Horowitz is a nationally acclaimed personal injury lawyer with numerous multi-million dollar verdicts and recoveries for injured clients. You won’t pay any fees until we secure a recovery for you. If you’ve been injured in an accident, please call us today.