CJAC: Civil Justice Association of California

Aug 18, 2011

CJAC Commends Supreme Court's Ruling in Medical Damages Case

Ruling Will Prevent Plaintiffs’ Attorneys from Artificially Inflating Damage Claims

SACRAMENTO - Today the California Supreme Court ruled in Howell v. Hamilton Meats that a plaintiff may only collect as damages the amount that actually had to be paid by insurers for medical treatment rather than the retail rate that medical providers charge for that treatment. In its opinion the Court stated that it is not appropriate to “expand the scope of economic damages to include expenses the plaintiff never incurred.” The case stems from an incident where a Hamilton Meat truck collided with the plaintiff as she was driving.

Medical providers negotiate reimbursement rates with insurance companies that are lower than the retail rate they would charge to someone without insurance. This allows them to gain access to the insurance provider’s customers and a broader pool of patients.

CJAC President Kim Stone made the following statement:

“The Supreme Court absolutely made the right decision and we are very pleased. This case addresses a situation where a plaintiff had health insurance for which a negotiated rate was already agreed upon, so the retail rate is irrelevant and should not apply. The medical providers were reimbursed appropriately at the negotiated rate. The plaintiff was compensated for all out-of-pocket costs. This is fair and prevents an unjustified windfall for plaintiffs’ attorneys.”

The Supreme Court’s opinion can be read here, and an amicus brief submitted by CJAC to the Supreme Court can be read here.

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