Sacramento Car Accident Victim Fights Reduced Damage Award, Part 7 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.)

(More re Medi-Cal payment ruling challenge.)

However, in Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 826-817, the Supreme Court expressed disapproval of restricting a tort victim’s medical specials to the amounts paid by Medi-Cal. The Court recognized that the tortfeasor escapes liability for the full amount of the medical expenses he or she wrongly caused. Such a result benefits the tortfeasor at the expense of the blameless provider and harms society as a whole. The Court urged the Legislature to remedy this inequity. Id. at 827. These policy reasons favor following the collateral source rule over the appellate courts’ disregard of that rule.

In Nishihama, supra, 93 Cal.App.4th 298, another appellate court extended the Hanif limitation beyond Medi-Cal to private insurance without distinguishing the collateral source rule. In Nishihama, the injured plaintiff’sought recovery of medical expenses which had been paid by her employer-obtained medical insurer (Blue Cross). That insurer in turn had negotiated for reduced rates (i.e. rates below what is ordinarily charged) at the facility where the plaintiff was treated. The jury awarded the plaintiff damages based on what the facility ordinarily charged. In the context of discussing whether the plaintiff could recover damages based on the hospital’s ordinary rates, the court first observed:

A plaintiff in a personal injury action is entitled to recover from the defendant tortfeasor, the reasonable value of medical services rendered to the plaintiff, including the amount paid by a collateral source, such as an insurer. As medical expenses fall into the category of economic damages, they represent actual pecuniary loss caused by the defendant’s wrong. Id. at 306.

The court then detoured into a discussion whether the hospital could assert an HLA lien based on its ordinary rates, even though it agreed to accept a reduced amount as payment in full. After concluding that the hospital (which was not then before the court) could not assert a lien for more than the amount it contracted with the plaintiff’s insurer to accept as full payment, the Court opined that the trial court’s error in permitting the jury to award plaintiff $17,168 instead of $3,600 for the provider’s services constituted error requiring 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. Id. at 309. (See Part 8 of 8.)

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

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