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Recoverable Medical Damages in California for Injuries

Posted by attorney Gary Moorhead

CA has long held that economic damages for medical bills incurred to treat injuries sustained in an accident and caused by a third-party are fully recoverable, and that the victim's evidence of medical insurance to pay a portion of those bills in inadmissible under the "collateral source rule".

If a victim's medical bills billed to him were $5,000.00, the wrongdoer was required to pay $5,000, regardless of whether or not his insurer paid a contractually-discounted amount (e.g. Blue Cross paid the bills in full for $2,500).

A few years ago the waters got muddied when the CA court in "Hanif", a case involving reimbursement of bills paid by MediCal, held that the right of recovery was limited to the amounts actually paid by MediCal. The theory was that MediCal had an assignment of the victim's claim for medical damages, and could recoup no more than it paid. The victim paid nothing for his MediCal coverage.

This Hanif rationale was then expanded by "Nishihama" in a poorly reasoned decision, extending it to private-pay insurance.

CA courts have since roundly criticized the Nishihama reasoning, which essentially guts the "collateral source rule", and the decision was repudiated and rejected in the Howell v. Hamilton Meats case handed down late 2009. The CA Supreme Court has taken the "Howell" case up for review, and vicitm's rights lawyers are trusting that the Supreme Court will carefully analyze the underlying validity of the collateral source rule and make "Howell" the law of the land once again as it applies to private insurers or victim- pay coverage such as Medicare.

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