A long-awaited California Supreme Court decision finally resolves the disagreement among California appellate courts with respect to the amount of damages a plaintiff may present to a jury for medical expenses that were reduced by a private health insurer. In Howell v. Hamilton Meats & Provisions, Inc., the state’s highest court accepted the defendant’s argument by a vote of 6-1, deciding that a plaintiff is only entitled to recover damages for medical bills actually paid for by the health insurer. Thus, an insurer’s “write-off’s” are not subject to the collateral source rule. 

The collateral source rule bars the introduction of evidence that any portion of plaintiff’s medical bills were paid for by a health insurer. Plaintiff attorneys had previously argued, with success, that introducing evidence of an insurance company’s “write-off’s” would violate this rule. As a result of the Howell decision, however, a trial judge is now empowered, upon a defendant’s motion for new trial, to simply reduce any jury verdict to the amount of the bill actually paid by the insurer, if the award exceeds this amount.

It should be noted that the holding in Howell still allows a jury to hear evidence of the full value of the medical specials in considering general damages (i.e., pain and suffering) and future medical care. However, the full value of the medical bills cannot support an award for past medical specials greater than the amount paid by the health insurer. Now that this issue is resolved, defense attorneys will be able to immediately request that trial courts limit plaintiffs’ past medical specials claims at trial, and defendants will know, with certainty, the value of a plaintiff’s medical specials claim during pre-trial negotiations. 

If you would like to view the decision, please click HERE. If you have any questions or would like to discuss the impact of this holding in greater detail, please contact the author Michael West at 213.517.5310 or mwest@mpplaw.com, or another MPP partner in any of our offices:

Los Angeles: 213.891.9100
Irvine: 949.769.6900
San Diego: 619.557.0404
San Francisco: 415.984.8500
Las Vegas: 702.862.8300

Sincerely,

George Brandon
Partnership Development Leader
213.417.5124
gbrandon@mpplaw.com

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