People who suffer traumatic brain injuries, spinal injuries or other serious injuries as a result of the negligence of a third party must receive appropriate medical care. Victims who do not have health insurance typically obtain medical care on a lien basis, and their lien is settled after a settlement or judgment in the case. To determine damages based on medical expenses in these cases the judge or jury must determine if the treatments were necessary and the charges were reasonable. The entire medical bill is presented to the fact finder (usually a jury) at trial.
This procedure is very different from that of cases involving medical expenses submitted to the health insurer. A victim whose medical bills are paid by an insurance carrier is only responsible for the co-payment or deductible. And, insurance carriers almost never pay all medical bills. Usually, a large portion of the medical bill is discounted due to reduced rates negotiated by the insurance company.
As the law stands, victims in California personal injury lawsuits who have health insurance receive less compensation than victims who do not have insurance. How courts assess damages for a personal injury victim who pays medical bills with private health insurance. The cases dealing with this issue have emphasized the public policy of not penalizing victims who have medical insurance. Less emphasis has been placed on cases in which medical bills are written off or heavily discounted due to contracts between insurers and health care providers. The issue is important for victims in cases of traumatic brain injuries, spinal cord injuries, and other serious injuries in which the treatment is usually long and very expensive.
The California Supreme Court has ruled that medical bills paid by health insurance must be included in evidence given to the jury. The Court stated that a victim should benefit from the purchase of health insurance. A victim in a personal injury case can submit evidence of all medical bills billed regardless of how the bills were paid. Those bills provide the jury with evidence of the amount of damages the victim should receive to compensate her for her bills. The accounts also help the jury as they assess the victim’s injuries. The presentation of total bills assists a jury or judge in determining how much a victim should award for their pain and suffering.
However, after a trial in which the full medical bill is presented the defense may request a hearing to reduce the amount of damages awarded to compensate the victim for the medical bills to reflect the cancellation or reduction due to contracts of -health insurance with medical providers.
The solution that the courts have come up with is to eliminate from the damages the medical bills that have been deleted. This goes against the original reason for allowing the medical bills of the insured victims to be brought into the process. The rule was designed to prevent the negligent party from benefiting from the victim’s decision to purchase insurance. The idea was to encourage victims to have insurance. Reducing the victim’s recovery due to write-offs or insurance adjustments benefits the negligent party. If the victim did not have insurance, the negligent party is responsible for the full cost of treatment. It seems logical that since the victim paid the premiums for the insurance, he or she should receive the benefit of any cancellation or reduction of the contract.
