When the California Supreme Court issued its opinion in Howell v. Hamilton Meats 52 Cal.4th 541, 257 P.3d 1130, 129 Cal.Rptr.3D 325 (2011), Nevada defense attorneys were hopeful Nevada would follow California’s example and prohibit plaintiff’s lawyers from introducing evidence of medical bills that had been partially or totally forgiven by medical providers. The defense bar was hopeful the case of Tri-County Equip. and Leasing, LLC v. Klinke, 1268 Nev. Adv. Op. 33, 286 P.3d 593 (2012), would be the vehicle by which Nevada would adopt the Howell precedent. This was not to be.
Tyson & Mendes argued and won the landmark Supreme Court decision of Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal. 4th 541, which held that a personal injury plaintiff is limited to recovering the lesser of what is actually paid or the reasonable value of medical services, rather than what a healthcare provider has billed the plaintiff for the services. A recently published decision reinforces the importance of this rule and the huge discrepancy between billed vs. paid amounts. Artur Hefczyc v. Rady Children’s Hospital-San Diego, 2017 WL 5507854 (filed 11/17/17 and certified for publication). In this case, a plaintiff sought declaratory relief (on behalf of a proposed class) to establish that (among other things) a hospital was only authorized to charge self-pay patients for the reasonable value of its services, and that it was not permitted to bill based on a master list of itemized charge rates. The Court declined to issue the relief because it found the issues were inappropriate for class action litigation.
The landmark California Supreme Court Decision, Howell v. Hamilton Meats and Provisions Inc. ((2011) 52 Cal. 4th 541), changed the paradigm of measuring past medical expenses in California by holding a personal injury plaintiff may only recover as damages the lesser of the amount actually paid for medical services or the reasonable market value of those services. However, the Howell, decision did not provide any specific guidance as to how to procedurally raise the issue at the trial level so as to set the stage for a potential appeal if the trial court does not properly follow or apply the Howell rule of law. The consequences of not properly raising Howell issues pre-trial are dramatically illustrated in the recent unpublished opinion Barker v. Aminirad (2017 WL 4707682). Although not citable as authority, the unpublished Barker decision is instructive to defense claims handlers and their counsel because it demonstrates what the defense must do pre-trial to create a record for a potential appeal.
The Daily Transcript – August 16, 2017
Robert Tyson is a founding partner of the law firm Tyson & Mendes. In 2011, he successfully argued before the California Supreme Court in Howell v. Hamilton Meats that an injured plaintiff may only recover the medical costs paid by his or her health insurance and not the higher amount billed to insurance companies by physicians and hospitals. In this interview, he reflects on a variety of topics, including the effect the case has had.
Last week the California Court of Appeal issued another huge victory to defendants by extending the reach of the landmark California Supreme Court Howell v. Hamilton Meats case to include future medical benefits under the Patient Protection and Affordable Healthcare Act (“ACA”). In 2011, Howell sent shock waves through the insurance industry when the Court examined the “billed vs. paid” rule and concluded an injured plaintiff is limited to recovering the discounted amount private health insurance pays on their behalf for as past medical damages, not the inflated amount medical providers bill health insurance companies for their services. (Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541.) In 2013, the California Court of Appeal extended Howell‘s “paid” rule to apply to future medical expenses and noneconomic damages. (Cornenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, 1331-1333.)
Although the Supreme Court held in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal. 4th 541 that an insured personal injury plaintiff is limited to recovering the lesser of what is actually paid or the reasonable value of medical services, there is a continuing need for medical billing audits. Why? Because plaintiff’s attorneys want more money and will stop at nothing to circumvent the Howell decision. The latest tactic when a plaintiff has private health insurance or Medicare/Medi-Cal is to simply not bill the insurance for the treatment and have the provider sell off its lien to a third party “factoring” company who then assumes the risk of recovery from the defendant. Even in cases where private health insurance has paid for the treatment, many judges either disagree with the Howell decision or simply do not understand it and continue to allow plaintiffs to present evidence of the “billed” charges as the reasonable value of the care provided.
Howell v. Hamilton Meats strikes again! In the recent Lee v. Silveira case, the court extended the Howell analysis, holding that in order to prevail under C.C.P. Section 998, plaintiff can use only the negotiated rate differential in determining whether he/she obtained a more favorable judgment or award than the statutory offer.
Another case addressing the issue of damages for past medical expenses was recently decided in California. In Ochoa v. Dorado (2014) WL3589887, Joaquin Ochoa and Imelda Moreno (“Plaintiffs”) were driving a truck when they were rear-ended by a tractor-trailer driven by Jesus Felipe Dorado, a driver for Trimac Transportation Services Western, Inc. (“Defendants”). Plaintiffs were taken to the hospital and received subsequent medical treatment, including back surgery. They filed a complaint against Defendants for negligence and loss of consortium.
Another California Court of Appeal has favorably expanded the Howell ruling to apply to restitution awards in criminal matters.I n this criminal appeal, the juvenile court of Alameda County Superior Court found two gang-affiliated minors “willfully and maliciously” fired a gun into an occupied vehicle.