Throughout the years, plaintiffs’ attorneys in personal injury actions have tried to present the entire amount of medical expenses billed in efforts to increase the plaintiffs’ recovery. Despite the irrelevance of these bills to the amounts actually paid or incurred by the plaintiffs or their insurance providers, plaintiffs’ counsel has insisted on emphasizing the extent of the amounts billed as a key strategy in influencing juries toward their favor. Two recent California appellate cases curtail this longstanding practice by limiting the relevance of these amounts billed, clarifying the procedural order for applying the cap of amounts paid or incurred by the plaintiffs set forth in Howell v. Hamilton Meats, 52 Cal.4th 541 (2011), and expanding the Howell cap to situations where Medicare has covered the plaintiffs’ medical care.
In Corenbaum v. Lampkin, 2013 WL 1801996 (Cal App. 2d Dist.), the plaintiffs filed a personal injury action seeking recovery of medical expenses from injuries sustained in a motor vehicle collision. The plaintiffs presented the full amounts billed for their medical care, asserting that they were relevant to past medical expenses, future medical expenses, and noneconomic damages, including pain and suffering, by demonstrating the extent of their medical care received. Under this strategy, the plaintiffs obtained an award greater than the amount actually paid for their past medical care. Finding that the full amounts billed easily confuse and mislead a jury, the Court of Appeal for the Second District held that the amounts billed are not relevant to 1) calculating past medical expenses, 2) evaluating future medical expenses or 3) estimating noneconomic damages such as pain and suffering. The court even went further, holding that the amounts billed cannot provide the basis for expert opinions on the value of future medical expenses because amounts billed cannot reliably indicate the reasonable value of this care due to the vast price differential among medical providers.
In Luttrell v. Island Pacific Supermarkets, Inc., (2013) 215 Cal.App.4th 196 (Cal.App. 1st Dist.), an elderly man sought recovery of medical expenses for a hip fracture and later-developed decubitus ulcer, which resulted from an incident at the defendant’s premises. Plaintiff’s counsel presented the amount billed for medical expenses, even though Medicare had only paid a small fraction of that amount. The jury awarded the plaintiff his billed expenses for the hip fracture, but cut his recovery for the ulcer, finding the ulcer largely attributable to the plaintiff’s pre-existing limitations. After post-trial motions, the trial court reduced the award to the amount actually paid for the plaintiff’s care (a figure less than 20 percent of the amount billed), and then further reduced the award by an additional 50 percent for the plaintiff’s failure to mitigate damages, ultimately cutting the plaintiff’s recovery in half. The plaintiff appealed, contending that the court’s reduction was improper, and alternatively that the court should have applied this reduction to the amount billed rather than the amount paid. Rejecting these assertions, the California Court of Appeal for the First District explicitly held that the Howell cap applies in situations where Medicare has paid for plaintiffs’ care. Reasoning that plaintiffs cannot avoid the consequences of their failure to mitigate or receive windfalls by recovering more for medical expenses than they ever incurred liability for, the court also insisted that the maximum potential recovery must first be reduced to the amount actually paid and then further reduced by any percentage attributable to the plaintiff’s contribution to the expenses, not the other way around. The court also affirmed the 50 percent reduction for the plaintiff’s failure to mitigate, finding that the trial court correctly attributed in part the plaintiff’s development of a severe ulcer to his failure to follow medical advice.
Corenbaum sets an important limitation on plaintiffs’ longstanding practice of presenting the full amounts billed for medical expenses in attempts to magnify their claims. California courts can no longer generally admit the amounts billed for medical expenses as Corenbaum explicitly holds these amounts are irrelevant to past medical expenses, future medical expenses, or even pain and suffering determinations. Luttrell’s extension of Howell to cases involving Medicare and its procedural order for applying the Howell cap to plaintiffs’ recovery are particularly significant in the context of a changing healthcare system because it ensures that plaintiffs cannot obtain windfalls in the damage reduction process. As rates for medical expenses skyrocket, Luttrell affirms that defendants will only be liable for these rates when plaintiffs also incur this same liability. With the jury and trial court in Luttrell reducing the plaintiff’s recovery for medical expenses after seeing the extensive bills, Luttrell sets an important example that even if trial courts somehow admit the full amounts billed, the presentation of large and impressive medical bills will not always produce the increased recovery for plaintiffs that their attorneys seek.