Recovering The Cost of Your Medical Bills After An Accident

After an accident, the victims are in need of medical attention. Medical aid though, like everything else in today’s world, costs money. Fortunately for victims, the costs of medical bills are recoverable in a lawsuit. Converting medical bills into damage awards is a tricky enterprise though, because of the wide range of rules involved in calculating such damage awards.

One such rule is the Collateral Source Rule (CSR). The CSR states that victims can have third parties pay for medical bills without having the amount paid deducted from their damage awards. “Third parties” primarily refers to insurance companies, although the term can include anyone who pays for the bills but is not directly involved in the accident. The CSR applies to both the giving of the awards as well as presentation of evidence to determine what the award should be.

The CSR has a limitation though. In Howell v. Hamilton, the California Supreme Court ruled that the CSR only applies to contracted prices of medical aid, not the actual prices. Suppose, for instance, that a surgery is worth $500,000. The victim’s insurance company negotiates the price down to $50,000.  Under the CSR, the victim is only entitled to $50,000 because $50,000 is the victim’s medical bill.  The actual market value of the surgery, $500,000, is not recoverable by the victim because neither the victim nor the victim’s insurance company paid the $500,000. Essentially, victims cannot recover more than what they paid or what third parties paid on their behalf for their medical bills.

The only exception is if the contracted price is a gift. In personal injury cases, “gifts” cannot be given “for commercial reasons and as a result of negotiations.” The CSR does not apply to discounts, a product of market bargaining. Gifts, on the other hand, come from a “donor’s desire to aid the injured,” and can thus be factored into a victim’s damage award. The gift exception exists because it is a policy which encourages charitable action, which the courts view as being in the public interest. (Howell v. Hamilton).

The Howell limitation to the CSR is a far reaching limitation. Howell applies to insurance provided by employers for on the job injuries, like in Sanchez v. Brooke, where the employee suffered burns and smoke inhalation when the building burned down. It also applies to victims covered by Medicare, like in Luttrell v. Island Pacific Supermarkets, where the elderly plaintiff suffered a hip injury after having an automated door hit him four times. Given Luttrell, there does not appear to be a distinction between private and government insurance, at least when calculating damage awards under the CSR.

Howell applies to presentation of evidence of past and future medical services. Calculating what a medical service is worth can be difficult, especially if the service is done in sessions rather than all at once. The patient may decline to finish the sessions or an unforeseen event may prevent the patient from finishing treatment.

In order to calculate treatment payment which has not been finished yet, courts can use evidence of previous medical services used by the victim to determine how much present treatment might be worth. Similarly, courts can call in medical experts to determine what a future medical service might be worth. Evidence of the actual market value of the medical services is suppressed under the Howell interpretation of the CSR. For instance, expert witnesses cannot reveal what a surgery’s actual market value is worth (Corenbaum v. Lampkin).

Being injured in an accident is a traumatic event for most people. Recovering the money lost from such an accident can be very difficult though, especially after the California Supreme Court’s latest ruling on tort recovery. The Pivtorak Law Firm by calling (415) 484-3009, or click here to request a free, confidential consultation online.

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