SAN FRANCISCO – In a civil court case involving medical bills, what is the appropriate amount to award in damages, and how is that determined?

This is the question that the 2011 case of Rebecca Howell v. Hamilton Meats brought to the California Supreme Court.

After a car accident, which resulted in injury, Howell purportedly incurred medical bills in the total amount of $189,978.63 – discounted to $59,692.23 through an agreement with her health insurance company and the health care providers.

Howell sued Hamilton Meats for the difference between the billed rate and the amount that was actually paid, $130,286.23. 

The California Supreme Court, however, ruled that an injured plaintiff who has health insurance is limited to economic damages in the amount that they or their insurers paid for medical services that they have received or bills that are still outstanding – they are not entitled to the difference between the billed rate and the rate that is actually paid.

In the original lawsuit, the trial court ruled that Howell could recover past medical expenses in amounts no greater than what medical providers accepted from Howell and her insurance company, as payment in full.  An appeals court reversed the trial court’s decision, and this was how Howell v. Hamilton Meats came to the state Supreme Court in 2011.

“Most people would think this is already a law,” Kim Stone, executive director of the Civil Justice Association of California, told the Northern California Record. “It feels kind of common sense.”

When a car crash occurs, there’s a difference in the amounts that are recoverable, depending on whether an individual has health insurance or not, and depending on the type of insurance they have. Individuals who have health insurance through government-funded programs can often show only amounts that their insurance programs paid, and those are typically lower than what private insurance companies pay out. The relationship between individual’s health care provider and their health insurance company can also affect the amount that they pay.

“Most people would think that your medical bill is what your medical bill says it is," Stone said. "Only a trial lawyer would think your medical bills are a lesser percentage of what is written."

Stone said that this case sends a message; however, not to the general public, but to the plaintiff’s attorneys in cases like Howell’s.

“Plaintiff’s lawyers take a percentage of a settlement," Stone said. "It’s the plaintiff’s lawyers that don’t like this decision. Insurance companies would like this decision, because the overall payout is what was paid."

The judges noted that the difference between what was billed and what was paid in medical bills was not something that a plaintiff could recover, because it is not a benefit to them - they didn’t pay the difference, so they cannot get it back.

“It’s trying to give an unjustified windfall by artificially inflating damages,” Stone said. 

A later decision by the California Court of Appeal for the 2ond Appellate District, Division 3 stated that plaintiffs could not use the evidence of the full amount billed as proof of damages, because they were not relevant.  


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