Hearing Set in “Reasonable Value” of Medical Services Case
CJAC Liability Reform Insider (June 2021) – Oral argument has
been set for June 29 in the Second Appellate District, Div. Eight
in Qaadir v. Figueroa, et al., B306011. CJAC filed
an amicus brief in the case in April.
The issue: How should a trial court determine the “reasonable
value” of medical services for a plaintiff who eschews existing
health plan coverage and instead obtains treatment from
out-of-plan medical providers who charge hyperinflated prices in
return for a lien on the plaintiff’s litigation recovery?
The plaintiff had health insurance but contracted with other
physicians who provided medical care to him in exchange for a
lien on his recovery – essentially a contingency medical services
fee. At trial, negligence by the defendant was stipulated so the
only issue was damages for which the court permitted the jury to
hear evidence of the “sticker-price” inflated medical care costs
billed by the lien physicians, while prohibiting the jury from
learning that the plaintiff had, but chose not to avail himself,
of care from his health insurer.
This deprived defendants of the ability to prove that the
plaintiff breached his duty to mitigate his damages and that the
billed amounts do not accurately represent the reasonable value
of plaintiff’s medical expenses. The trial court and plaintiff
invoked the collateral source rule as justification for these
exclusionary rulings.
In CJAC’s amicus brief, we argue the trial court’s decision runs
counter to the decade-old precedent holding that the “sticker
prices” mirrored by unpaid medical bills for
an insured plaintiff are irrelevant and inadmissible
evidence of the “reasonable value” of those services,
per Howell v. Hamilton Meats & Provisions, Inc.
and Corenbaum v. Lampkin, two cases CJAC also
participated in as amicus curiae.
The use of “lien basis” billing charges by medical providers has
become a trending scheme for plaintiffs to end-run the holdings
of Howell and Corenbaum. In
addition, the plaintiff’s reliance on the collateral source rule
rests largely on the assumption that purchasing health insurance
is voluntary and that many people are not insured. That
assumption, however, is no longer valid now that California
mandates, and at the time of plaintiff’s accident, the federal
government mandated, individual health insurance.
This case should be reversed and remanded for a new trial on the issue of medical economic damages.