| There has been an on-going controversy about | | | | differential was the difference between the full |
| whether insured victims may recover the full | | | | amount of the medical providers' bills |
| amount billed by healthcare providers for medical | | | | ($189,978.63) and the lesser amount paid by the |
| expenses in a personal injury lawsuit or the | | | | private healthcare insurer in cash payments to the |
| reduced amount that insurers negotiate with | | | | medical providers that the providers had agreed |
| healthcare providers. The defense bar has relied | | | | to accept as payment in full pursuant to their |
| on cases that have induced courts to reduce | | | | agreements with the insurer ($59,691.73). The |
| medical expense awards in personal injury lawsuits | | | | Court of Appeals declared that the plaintiff was |
| to the amount actually paid by the private | | | | entitled to the full amount of the medical |
| healthcare insurance carrier for the personal injury | | | | expenses award, $189,978.63. |
| victim. The plaintiff's bar has argued that the full | | | | The plaintiff contested the motion of the |
| amount is recoverable under the Collateral Source | | | | defendant by contending that she was not a |
| Rule, because a responsible victim who has had | | | | Med-Cal beneficiary, and that she was suing a |
| insurance coverage in place should not be subject | | | | private defendant. Therefore, the plaintiff |
| to a reduced award because his or her insurance | | | | contended that she should be permitted under the |
| company has negotiated a lesser price for the | | | | Collateral Source Rule and the applicable measure |
| medical services provided. | | | | of damages to recover the full amount of the |
| In a recent case out of San Diego County, the | | | | reasonable "cost" or "value" of the past medical |
| California Court of Appeals supported the | | | | expenses paid or incurred as a result of her |
| Collateral Source Rule analysis and declared that | | | | injuries and not just what her private healthcare |
| victims of personal injuries may recover the full | | | | insurer paid to her medical providers. The plaintiff |
| amount of medical bills billed to them by | | | | also argued that under the Collateral Source Rule, |
| healthcare providers, even though their private | | | | the Court should exclude evidence of the benefits |
| healthcare insurance carrier paid less under a | | | | that the plaintiff's healthcare provider paid. |
| negotiated contract with the provider. | | | | The plaintiff asserted that she received two |
| The Court of Appeals decided whether a plaintiff | | | | collateral source benefits from her healthcare |
| who has private healthcare insurance in a personal | | | | insurer: (1) a reduced alternative rate for cash |
| injury case may recover, under the Collateral | | | | payments, and (2) a negotiated rate differential. |
| Source Rule, economic damages for the amount | | | | The plaintiff said her insurance generated benefits |
| of past medical expenses that the plaintiff's | | | | that included non-cash benefits and services such |
| healthcare providers have billed out, but which | | | | as preferred provider listings that are |
| neither the plaintiff nor the plaintiff's healthcare | | | | endorsements of medical providers, a guaranteed |
| insurer is obligated to pay because the providers | | | | flow of patients who are members of the |
| have agreed, under contracts into which they | | | | insurer's healthcare plan and timely payments |
| entered with the insurer to accept (as payment in | | | | from pooled premiums that reduces the number |
| full) payment in an amount that is less than the | | | | of collection actions the providers must bring to |
| amount the providers billed out. As the Court said, | | | | collect payments from their patients. The Court |
| "Stated differently, is the difference (the | | | | of Appeals referred to those two items as "two |
| negotiated rate differential) between (1) the full | | | | collateral source benefits" of plaintiff's healthcare |
| amount of the medical provider's bills, and (2) the | | | | insurance. |
| lesser amount paid by the private healthcare | | | | The Court said that under the Collateral Source |
| insurer in cash payments to the medical providers | | | | Rule, the benefits of the private healthcare |
| that the providers have agreed to accept as | | | | insurance of the plaintiff were a collateral source |
| payment in full pursuant to their agreements with | | | | benefit because it was conferred upon the plaintiff |
| the insurer, a benefit within the meaning of the | | | | as a direct result of her own thrift and foresight |
| Collateral Source Rule such that the plaintiff is | | | | in procuring private healthcare insurance. The |
| entitled under that rule to recover the amount of | | | | Court declared that under California's Collateral |
| the negotiated rate differential as part of her | | | | Source Rule, a person who has invested in |
| economic damages award?" | | | | insurance premiums to ensure her medical care |
| Before the trial Court entered judgment, the | | | | should receive the benefits of her thrift and the |
| defendant filed a motion seeking an order | | | | defendant, as a party liable for a plaintiff's injuries, |
| reducing the jury's special verdict for the plaintiff's | | | | should not garner benefits from an insured |
| past medical expenses by $130,286.90 (the | | | | plaintiff's providence. |
| negotiated rate differential). That negotiated rate | | | | |