Collateral Source

Collateral source rule precludes reduction of amount of medical expenses plaintiff incurred for rendered services to cash amount accepted by plaintiff=s medical providers.  Michael King v. Carol Willmett, (No. C059236 California Courts of Appeal, Third Appellate District, Sacramento, August 9, 2010).

In this case, the court considered whether in a negligence action against a non-public defendant the reduction of a plaintiff=s award of past medical expense damages to the dollar amount ultimately paid by the plaintiff=s private health insurance to his healthcare providers was appropriate under the collateral source rule.  In light of the public policy conclusion expressed by California State Court and the Legislature’s enactment of specific statutes covered in the operation of the collateral source rule in limited types of cases, it conclude that the reduction was inappropriate, therefore the trial court erred in reducing the award in this matter.  (We note that the California Supreme Court has granted review in the recent case, Howell v. Hamilton Meets and Provision, Inc. (2009) 179 Cal. App. 4th 686 and therefore there is likely to be a California Supreme Court decision in this area.)

This case is worthy of special comment as it deals with one of the most important issues pending before the California Supreme Court.    Interestingly, the opinion was issued by the appeals court judge who has been selected to become the presiding judge of the California Supreme Court.     Now the sitting as the chief justice, former appellate court justice Cantil-Sakauye wrote the opinion in Michael King, v. Carol Wilmett, No. C059236, Court of Appeals of California, Third District, Sacramento, Filed August 9, 2010 (King) which involves the precise issue that is pending before the California Supreme Court in Howell v. Hamilton Meats & Provisions, Inc. (2009) 179 Cal.App.4th 686 (Howell).      The issue is whether a personal injury plaintiff’s recoverable medical expense damages can include not only what she and her health insurance company paid for her medical services, but also larger amounts “billed” by her healthcare providers, even if the providers agreed to accept the paid amounts as payment in full and neither plaintiff nor her insurer will ever pay any larger amounts.  

The Supreme Court’s decision could affect every personal injury action in California where medical specials are at issue

Justice Cantil-Sakauye’s opinion in King embraces the position advocated by the plaintiffs’ bar, that is, the plaintiff can recover more than the actual amount that the healthcare actually gets paid for its services.  Note, Chief Justice Cantil-Sakauye will not be able to participate in the handling of this decision once the court issues its opinion in Howell. 

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