By Mark B. Wilson, P.C.
An injured plaintiff, who has insurance which pays plaintiff's medical costs, is only entitled to recover the amount of expenses the insurance company actually paid, even if the actual medical bills are much higher. For instance, if plaintiff suffers a traumatic brain injury and incurs $185,000 in medical expenses, but his insurance company pays a reduced rate for medical care in the amount of $75,000 for his care, plaintiff is only entitled to recover $75,000.
The rational for this rule is that according to BAJI 14.10 (and the law upon which it is based), an injured plaintiff is only entitled to recover the "reasonable" value of past medical expenses actually incurred. Hanif v. Housing Authority of Yolo County (1989) 200 Cal.App.3d 635, 639-644. This rule supposedly prevents an injured plaintiff from recovering a windfall.
For obvious reasons, some defense attorneys will successfully use this rule to exclude evidence of bias in excess of the amount actually paid. Plaintiffs will want to oppose this attempt because evidence of the amount paid (without explanation) will make it appear to the jury that the plaintiff's injuries are less than significant than they really are. In the hypothetical, plaintiff will want the jury to hear evidence that the medical bills totaled $185,000, even if plaintiff is only entitled to recover $75,000.
The law recognizes an injured plaintiff's concerns. "Evidence of plaintiffs' bills from medical care providers is of course relevant to show his or her expenses and that the alleged services were, reformed." Flahavan, Cal Practice Guide: Personal Injury, (The Rutter Group 2002) Chapter 3, Section 3:35, citing McAllister v. George (1977) 73 Cal.App.3d 258, 264. Emphasis added. See also, Nishihama v. City and County of San Francisco (2001) 93 Cal.App.4 th 298:
"We therefore conclude that the trial court erred in permitting the jury to award plaintiff $17,168 [plaintiff's actual medical expenses] instead of $3,600 for CPMC's services [the insurance company's negotiated rate]. We do not agree with the City, however, that this error requires remand, because the jury somehow received a false impression of the extent of plaintiff's injuries by learning the usual rates charged to treat those injuries. There is no reason to assume that the usual rates provided a less accurate indicator of the extent of plaintiff's injuries than did the specially negotiated rates obtained by Blue Cross. INDEED, THE OPPOSITE IS MORE LIKELY TO BE TRUE. We therefore will simply modify the judgment to reduce the amount awarded as costs for medical care. Emphasis added. Nishihama, supra 93 Cal.App.4 th 298, 309.
In responding to a defense motion to exclude evidence of medical costs in excess of what was actually paid, plaintiff has at least two options. First, plaintiff can suggest the court provide the jury an instruction that it may not award anything more than a certain amount. Second, plaintiff can ask the defense to enter into a stipulation setting forth the actual bills and stating that if plaintiff is successful, plaintiff is only entitled to recover the amount paid.
This article first appeared in the OCTLA Gavel, Fall 2003.