Sacramento Auto Accident Victim Challenges Medi-Cal Payment Ruling, Part 6 of 8

(Please note: the names and locations of all parties have been changed to protect the confidentiality of the participants in this automobile accident/personal injury case and its proceedings.)

COURTS DISCUSSING LIEN RIGHTS HAVE IMPROPERLY ERODED THE COLLATERAL SOURCE RULE

While it appears uniform that under the collateral source rule a tortfeasor is not entitled to introduce evidence that the injured plaintiff has insurance for purposes of proving that the plaintiff has not been injured to the extent an insurer has already paid for those injuries, some appellate courts have either directly or indirectly ruled that the tortfeasor is able to introduce evidence of the amount the plaintiff’s insurer has paid in order to cap the amount of the plaintiff’s recovery. These courts have reasoned that if the insurer has a separate agreement with the health care provider to furnish medical care at a rate below what is normally charged, then that reduced rate becomes the plaintiff’s true damages for purposes of fixing his or her recovery.

The first reported case to take this path was Hanif, supra, 200 Cal.App.3d 1635. There, in the context of an action where the injured plaintiff’s medical care was paid for by Medi-Cal, the court initially explained:

Preliminarily, we note there is no question here that Medi-Cal’s payment for all injury-related medical care and services does not preclude plaintiff’s recovery from defendant, as special damages, of the amount paid. This follows from the collateral source rule.

Id. at 640.

However, without any further reference to the collateral source doctrine, the court proceeded to reason:

The question here involves the application of the measure, i.e., whether the reasonable value measure of recovery means that an injured plaintiff may recover from the tortfeasor more than the actual amount he paid or for which he incurred liability for past medical care and services. Fundamental principles underlying recovery of compensatory damages in tort actions compel the following answer: “no.” Id.

Hanif has always been limited to cases involving Medi-Cal. The reason for this is simple. In a Medi-Cal case, the plaintiff has no invested money in health insurance and thus the rationale for the collateral source rule — that plaintiff would be in a position inferior to that of having bought no insurance – does not exist in a Medi-Cal case. (See Part 7 of 8.)

For more information you are welcome to contact Sacramento personal injury lawyer, Moseley Collins.

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