Plaintiff’s Dirty Little Trick: Medical Liens

Author: Eva Bonelli

The Second Appellate District, Division Three recently handed down a very favorable published decision in the case of Dodd v. Cruz, B27493 (filed 2/5/14). In this case, the court addressed the issue of whether a defendant can discover evidence regarding a third party’s contractual relationship with a health care provider treating an injured plaintiff in a personal injury case, including documents disclosing what the third party paid for the medical lien.

Underlying Action
Plaintiff Dodd and defendant Cruz were involved in a motor vehicle accident. Plaintiff Dodd suffered injuries to his shoulder. He received treatment for his injury at Kaiser Permanente. He later underwent surgery at Coast Surgery Center of South Bay (Coast).

The surgery was performed on a lien basis. Coast’s bill was between $40,000 and $50,000. On the same day of the surgery, Coast sold to MedFi its account receivable and lien against plaintiff Dodd for payment of its charges. Medfi claimed it was in the business of purchasing accounts receivable from health care providers, “at a discount.”

After litigation commenced, defendant Cruz served MedFi with a deposition subpoena for production of business records. The subpoena, among other documents, requested documents related to its “lien contracts” with Coast and included evidence of the amount MedFi paid for its lien on plaintiff Dodd’s recovery, if any, against Defendant Cruz. MedFi objected to the subpoena on the grounds that they were confidential, proprietary and irrelevant.

Evidence of What a Third Party Paid for a Medical Lien is Discoverable
To resolve the issue, the court reviewed the measure of damages for past medical expenses. “[A] plaintiff may recover as economic damages no more than the reasonable value of the medical services rendered and is not entitled to recover the reasonable value if his or her actual loss was less.” Howell v. Hamilton Meats & Provisions, Inc. (2011) 53 Cal.4th 541, 555. “[T]hat when a medical care provider has, by agreement with the plaintiff’s private health insurer, accepted as full payment for the plaintiff’s care an amount less than the provider’s full bill, evidence of that amount is relevant to prove the plaintiff’s damages for past medical expenses and, assuming it satisfies other rules of evidence, is admissible at trial. Id. at 567; accord Corenbaum v. Lampkin (2013) 215 Cal. App. 4th 1308, 1327. Accordingly, the court held the subpoena was reasonably calculated to lead to the discovery of evidence relating to the reasonable value of the third party’s services.

The ruling is favorable for defense: Going forward, you may subpoena a third party who has purchased all or part of a medical provider’s bill for medical services rendered to an injured plaintiff regarding the amount it paid the providers for the medical liens.

 

ABOUT THE AUTHOR: Eva Bonelli is a 2007 graduate from Thomas Jefferson School of Law. Ms. Bonelli has been with the firm for many years now and specializes in general liability defense, employment, and business litigation. Contact her at ebonelli@tysonmendes.com.

 

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