In California, there is a 2011 case called Howell v. Hamilton Meats that has changed how medical expenses are pursued. Everybody wants to apply the Howell ruling to medical expenses claimed. In that case, the court ruled that the medical damages were limited to the amount actually paid to resolve the bill. In other words, if a medical bill is resolved by payment of a sum less than the billed amount, then the injured party is only allowed to claim as damages the amount paid to resolve the medical bill. We have a unique insight into the whole case because Russell Kohn was good friends with the plaintiff Rebecca Howell and her attorney husband Mike. In fact, before her injury, we all played on the same North County Bar Association softball team. Mike and Rebecca have retired and moved to Hawaii. Because of our closeness to Rebecca Howell and her husband Mike, we know more than most California attorneys and adjusters about the Howell case. It is probably one of the biggest cases limiting damages to come out of California in the last 30 years.
People often hear about the large hospital bills that injured parties incur. However, in California we are not able to present the full amount of the bill that was charged by the hospital as reasonable medical expenses in a case. For instance, if a health insurance company paid for the hospital bill with pennies on the dollar, we are only able to claim the smaller amount actually paid by the health insurance company. For example, if a client stays in the hospital due to an injury for a month, the hospital bill would ordinarily be several hundred thousands of dollars. But, if the client has Medi-Cal health coverage, which is the Medicaid system in California, the hospital must accept the amount Medi-Cal pays and the entire bill might be resolved for payment of only $5,000. That would be the limited amount that our client can claim at trial. Some folks and Judges find this reasonable, though it means that those victims without any health insurance can recover more than those who had the foresight and sensibility to procure health insurance coverage. To us, this seems unreasonable and unfair.
Therefore, the Howell case has taken much of the wind out of the sails for plaintiffs and their attorneys when it comes to building up or demonstrating the significance and value of a case. That's a reason why other areas of damage, such as non-economic damages including pain and suffering, become so much more important in these cases. That is the real significance of the Howell decision on the plaintiffs' cases. We need to establish that even though the individual stayed at the hospital for months and only $5,000 was paid by Medi-Cal to the hospital, that doesn't mean that the person didn't suffer tremendous pain and suffering damages, including in being laid up and separated from family for that entire time. Being isolated like that and losing out on all of the activities that they would otherwise typically enjoy is compensable damages.
For purposes of settlement, we always claim the medical expenses, even if they are small. If the case does not settle, then we may suggest waiving small medical bills completely for purposes of trial. We do not want small medical bills to work as a psychological anchor to lower the jury's calculation of intangible non-economic (general) damages.
Many times, juries and even adjusters will value intangible damages, the non-economic losses, higher when medical expenses are higher. The thought is that if your medical bills are high, then your pain and suffering must be high too. If your medical bills are low, perhaps you didn't have as much pain and suffering. It's not a good way to think about it, but it's a natural reaction. The lawyer would need to decide at trial whether to waive small medical bills and not claim them at all. The jury would be under the understanding that those bills were paid by the insurance – that's why they are not being claimed. The injured client can help their attorney prove up their medical expenses by gathering any bills that they receive, as well as explanations of benefit forms received from health plans, and provide those to their attorney.
Sometimes, an emergency room physician will bill separately from the emergency room. That bill goes to the client. The attorney only sees it when the client provides it to the attorney. Therefore, it's important for the client to gather all of the bills and provide them to their attorney. If the client has health insurance, it's also important that they gather their explanations of benefits forms, commonly known as EOBs, and provide those to the attorney as well. That way, your attorney can have an idea of what all of the billed medical expenses are and what amounts the insurance actually paid. It's getting easier and easier to obtain this information since most medical providers and health insurers now have online portals. Sometimes clients don't even get the bills or copies of the bills because they go straight to the insurance plans. Clients can now often download medical bills and explanation of benefits forms from these online portals.
That's one way that clients can help their attorney gather the necessary paperwork. Other miscellaneous items that a client might incur as medical expenses include cervical pillows, traction devices, or a TENS unit. Any expenses that the client pays for out-of-pocket should be kept and submitted to the attorney. For past medical expenses, the law requires that they be reasonable in amount and necessary for the treatment of an injury. Evidence supporting those are two factors can be provided through the testimony of the doctor. Without proving that the treatment was necessary and related to the subject incident, you can't recover for the reasonable expense of the treatment.
Also, the law requires that you show that the expense of the treatment is reasonable by community standards. That is to say that it must compare favorably to what other similar medical providers in the local community charge for a similar treatment. If the bill is paid, that is some evidence of the reasonableness of the charges.
Clients should understand that while their insurance paid the medical bill and nothing more is owed to the medical provider, it's very important to claim those expenses as part of their damages. The reason is that the insurance company that paid the medical expenses may have a contractual right to reimbursement out of any recovery a client gets from the party at fault. Therefore, you don't want that reimbursement to come out of your portion of the recovery that's attributable to pain and suffering or other intangible losses.
Clients should also know that there is a doctrine called the collateral source doctrine in California that prevents the party that caused the injury from getting an offset if the client's insurance company paid for their medical bills. And so, even though the health insurance company paid the medical bills, a client is entitled to pursue recovery for those bills from the party at fault. Sometime they are also in a better position to recover those medical bills if their medical insurance company requires reimbursement.
For more information on Past Medical Expenses In A Personal Injury Claim, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (760) 710-0190 today.