January 4, 2012
The California Supreme Court on Tuesday May 24 heard arguments in the case of Howell v Hamilton Meats. The case is of great interest because it will determine whether a defendant is entitled to reduce the injured victims jury verdict for full medical bills to the amount 'paid' by health insurers for injury related medical expenses. The law has long recognized that when an injured party is prudent enough to have paid for health insurance to cover medical expenses a defendant is not entitled to benefit from the victim's prudence. This is called the 'collateral source rule'.
Recently, some trial courts have in post trial motions been reducing the 'jury award' to the 'actual amount paid' which victim attorney's call unfair and a violation of the Collateral Source Rule. The difference between 'billed amount' and 'paid amount' is the 'discount' medical providers give health insurers in exchange for 'other benefits' including marketing,prompt payment and referral of patients. The victim has essentially paid for this discount through years of premiums and as a group should benefit from the reduction not the defendant wrongdoer. The defense attorney and insurance industry argue that the victim has suffered no 'damage' beyond what the health insurer actually paid and that should be all they should have to pay as 'damages'. The Supreme Court decision will likely be published within the month.