Howell v. Hamilton Meats Finds Injured Party Not Allowed To Recover Undiscounted Medical Costs
In a closely watched California personal injury case, the California Supreme Court has determined that an injured party is not entitled to recover undiscounted medical expenses when a third party has negotiated a favorable deal with the health care provider. This ruling has the potential to significantly impact the amount of medical costs recovered in medical malpractice and other personal injury lawsuits throughout California.
In Howell v. Hamilton Meats, a woman – Rebecca Howell – was injured in a car accident. As the result of the incident, she required medical care including several surgeries. At trial, a jury awarded her the full amount of her medical costs. However, the court reduced this amount to the actual amount paid by the insurance company on the bills. The discounted amount reflected a prior agreement made between the insurance company and her health care providers. In many situations, the amount an insurance company actually pays of a medical bill represents only a fraction of the amount stated in the ”real” bill.
On appeal, the appellate court determined that the reduction violated the “collateral source rule.” The collateral source rule provides that a damage award to be paid by a responsible party cannot be reduced if the injured person receives money from a third party source. The Supreme Court reversed the lower court, determining that the collateral source rule was inapplicable. The court reasoned that when an insurance company negotiates a prior agreement to pay less than the full amount due on a medical bill, those are not damages an injured party would otherwise recover.
The court stated that because the discounted amount does not “represent an economic loss for the [injured party] they are not recoverable in the first place.”
As noted in its dissent, the court expressed its concern that negligent parties may benefit unfairly from this ruling.
As San Francisco medical malpractice lawyers we have been following this case closely and how it may impact the rights of those injured due to the negligence of others. We are dedicated to ensuring those harmed by medical errors recover the amount they deserve for their injuries. For more information or if you have suffered significant injuries requiring medical care, please contact our San Francisco medical negligence attorneys for a confidential consultation.
