California Supreme Court to Review Right to Recover all Medical Expenses
In 2009, in Howell v. Hamilton Meats & Provisions, Inc., a California Court of Appeal for the Fourth Appellate District ruled that personal injury victims may recover damages for all of their medical expenses, regardless of the amount that was paid by their health insurers. Two other cases after Howell reached the same conclusion, and the California Supreme Court has agreed to review all three cases.
Victims’ Right to Full Recovery
As discussed in a previous article on injured people’s right to full recovery of medical expenses, the Howell decision greatly benefited personal injury victims. In Howell, the court said that, under the collateral source rule, injured people may recover damages for the full amount of their medical bills even if their insurance companies paid less than the billed amounts through negotiated agreements with the medical providers.
Collateral Source Rule
The collateral source rule bars the reduction of damages an injured person receives in a personal injury lawsuit because he or she obtained other compensation or benefits from parties other than the at-fault person. These “collateral sources” of benefits often include the injured person’s insurance company.
Commonly, health insurance companies form agreements with medical providers in which the health insurers pay lower amounts for medical care in exchange for sending a high volume of patients to the providers and paying bills promptly. Therefore, the amounts billed to patients are often less than the amounts paid by their insurance companies to settle the bills.
This creates benefits for patients because they are released from paying the full amount of their medical bills through these agreements and, because insurers pay less for medical care, patients have lower premium rates for their health insurance.
Howell and two later cases, Yanez v. SOMA Environmental Engineering, Inc. and King v. Willmett, held that these patient benefits are collateral benefits that must be excluded under the collateral source rule when calculating personal injury damages. In addition, these cases state that the at-fault person is responsible for fully compensating the victim for his or her injuries as measured by the amount billed for medical care, not by the amount paid by his or her insurer as a collateral benefit.
The California Supreme Court has agreed to review these three cases, and its decision to uphold or reverse the rulings will have a significant impact on injured peoples’ recovery and personal injury lawsuits throughout the state. If you have been injured, contact an experienced personal injury lawyer in your area to discuss your rights.