Car accident lawyers report that victims of car accidents with private health insurance coverage will no longer be able to sue negligent drivers for more than was actually paid to treat their injuries under a recent California Supreme Court decision Howell v. Hamilton Meats & Provisions, Inc.
In the Aug. 18, 2011 decision, the California Supreme Court opinion says that a plaintiff treating injuries under private health insurance plans cannot claim as damages more than was actually paid to medical providers for their treatment. The decision is being touted by car accident lawyers as a windfall to defendants in personal injury lawsuits as it will ultimately reduce damages or settlements paid by those at fault in an accident.
“Sadly negligent drivers will pay less if the person they injured is covered under their own private health insurance coverage,” said Emery Ledger, a car accident lawyer at Ledger & Associates in Newport Beach. “Under this decision, victims of car accidents who have paid premiums to private health insurance companies out of their own pockets are essentially rewarding those who have hurt them.”
Under this new precedent, car accident lawyers say that plaintiffs who use their own private health insurance to pay for treatment cannot set damages awards using the undiscounted price billed on their behalf.
Typically, car accident lawyers explain, a plaintiff treating under their own private health insurance receives medical care for their injuries, but insurance companies usually negotiate with medical providers such as doctors, chiropractors and hospitals to have those bills significantly reduced. So what was actually paid was often significantly lower.
Patients with health insurance pay a negotiated rate for treatment whereas those without medical coverage pay the higher full rate for medical services. Prior to this month’s decision, both insured and uninsured victims of car accidents could submit to court the “billed rate” as their cost for determining damages to be awarded, but the court says this will no longer be the case.
In Howell v. Hamilton Meats & Provisions, Inc. , the driver of a truck owned by Hamilton Meats & Provisions Inc. conceded he was negligent in causing serious injuries to Rebecca Howell in a car accident between his truck and a car driven by the plaintiff Howell.
The jury awarded Howell $189,978.63, the total amount billed for her medical care, but Hamilton argued that medical providers “wrote off” $130,286 of that bill and that he only owed the difference of these two amounts. The trial court conceded and reduced the award to $59,691.73.
Howell appealed the decision and the trial court decision was reversed. Hamilton was ordered to pay the full amount of $189,978.63. At that point, Hamilton requested review by the California Supreme Court. The Supreme Court reversed the Appeals Court decision and remanded it to that court for further proceedings consistent with its opinion.
In their decision, the Supreme Court held that the injured party has not suffered a loss in the higher amount billed on their behalf and therefore cannot recover damages in that amount, car accident lawyers report.
The plaintiff’s attorney argued that the Collateral Source Rule as defined in Helfend v. Southern California Rapid Transit District permitted them to seek higher damages based on the “billed rate” for medical treatment. In Helfend, injured parties who received compensation from an independent medical provider, in this case Medicare, could claim as damages the full amount that was billed because it was a gratuitous service provided to them. The amount was actually paid on their behalf with the expectation that once a lawsuit was settled they would be paid out of the proceeds.
In comparison, plaintiffs covered by health insurance receive a lower negotiated rate for their treatments due to contracts between medical providers and insurance companies. There is no expectation that these medical providers will be paid more for their services after the lawsuit is settled and therefore the plaintiff has no liability to pay more than the negotiated rate, car accident lawyers report.
The court further defined existing statutes that support their decision. Under the Civil Code Sec. 3359 “No more than reasonable damages can be recovered.” Additionally, under Civil Code Sections 3281 and 3282, plaintiffs are limited to recovering actual losses or damages.
Ledger & Associates has been representing clients who are victims of traffic accidents in the personal injury field for many years. Our clients are people who have been injured in car accidents, motorcycle accidents, truck accidents, train collisions, pedestrian accidents and bicycle accidents. Our legal team will work to get you compensation for your injuries so you can get on with your life.
Call Ledger & Associates today for a free consultation at 1-800-300-0001.
