For many years now, the issue of medical insurance payments to health care providers who care for personal injury victims has been a source of confusion and frustration among personal injury lawyers. When an injured person incurs medical bills as a result of an accident, and then recovers money from the person/entity that caused the injury, should the injured person be allowed to recover the full amount of the medical charges billed by the health care provider (doctors, hospitals, etc.), or simply be allowed to recover the amount paid by the health insurance carrier?
The answer to that was cleared up a bit yesterday when the Fourth District Court of Appeals (Div. One) issued its opinion in Howell v. Hamilton Meats & Provisions.
Rebecca Howell suffered very serious injuries when the car she was driving was struck by a truck being driven by one of Hamilton Meats’ employees, who made an illegal U-turn. Ms. Howell suffered a major spinal injury that required two surgeries and substantial post-surgical care. She sued Hamilton Meats, who admitted fault, and a trial was held on the amount of her damages.
At trial, a jury awarded Ms. Howell a total amount of $689,978.63, which included payment for all past medical care, and for her general pain and suffering damages. After the trial, the Hamilton Meats moved to reduce the past medical expense portion of the verdict by a whopping $130.286.90 from $189,987.63 to $59,692.73, since that was the amount her health insurer (PacificCare) had paid to her health care providers. The trial judge agreed, holding that Ms. Howell would receive a windfall if she received more money for past medical care than she would ever personally be liable for. Ms. Howell appealed.
After some excellent lawyering (a hat tip here to San Diego lawyer John Rice), the court of appeal reversed the trial judge, and ordered that Ms. Howell be awarded the full amount of the medical bills that were billed by her health care providers without any reductions. The court held that any trial court reductions was a violation of the long-standing collateral source rule (payments from source independent of negligent party should not be deducted from damages), and that the wrongdoer, here Hamilton Meats, should not receive the benefit from Ms. Howell’s own responsibility and thrift, or any side deals made between PacificCare and her doctors. In short, why should Hamilton Meats get a $130.286.90 break simply because Ms. Howell, the person it injured, purchased good health insurance?
The court said:
Under California’s collateral source rule, Howell, as a person who as invested in premiums to assure her medical care, should receive the benefits of her thrift; and Hamilton, as the party liable for Howell’s injuries, should not garner the benefits of Howell’s providence. The law allows Howell to keep this collateral source benefit for herself because she was responsible for the benefit by maintaining her own insurance.
You can be sure the defense bar and insurance industry will be appealing this one. But it’s hard to argue the logic in terms of providing justice. If private health insurance companies and private doctors and hospitals agree to price reductions for care, why should defendants who cause injury get the benefit?
To read the entire Howell opinion click here (.pdf).
The Walton Law Firm represent accident victims throughout San Diego County and has recovered millions of dollars for individuals involved car accidents, motorcycle accidents, pedestrian injuries, uninsured motorist claims, animal bites, construction accidents, slip and fall injuries, dog bites, insurance disputes, and medical malpractice suits. Call (760) 607-1325 for a free consultation.
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