Since the decision in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, plaintiffs have only been allowed to recover those medical costs actually incurred. Under the Howell decision, if the plaintiff had health insurance that covered part or all of his care, the plaintiff could only recover those amounts that the plaintiff paid out of pocket and those amounts that his health insurance paid on the plaintiff’s behalf. The plaintiff was not entitled to recover any amount that was reduced pursuant to a contract between an insurance carrier and a healthcare provider.

In response to this blow, plaintiff attorneys have been arguing that the billed amount for medical expenses should still be presented to a jury, even if the total billed amount is not recoverable due to the plaintiff’s insurance benefits. The Howell case did not rule on the evidentiary aspects of the billed versus incurred medical costs and appellate courts have split on whether to admit the fully billed amount and take a reduction post-verdict, or to only present the adjusted number to the jury. The Second Appellate District has now issued a ruling that only the Howell amount—the bills post-insurance adjustment—can be presented to a jury.

In Corenbaum v. Lampkin (filed April 30, 2013 Los Angeles County Case No.: B236227, second appellate district, division three), the court held that the amounts billed by a medical care provider are irrelevant and inadmissible when plaintiff’s treatment was covered by insurance[1]. The facts of Corenbaum are common to many personal injury cases. Plaintiff Corenbaum and a second plaintiff, Carter, were riding in a taxi, when defendant Lampkin’s car ran a red light and hit the taxi, causing serious injuries to the plaintiffs. After a trial, the jury awarded Corenbaum $1.8 million in compensatory damages and awarded Carter $1.4 million. The defendant appealed in light of the Howell case, which was decided while the Corenbaum case was pending. On review, the second appellate court found that the unadjusted billed amounts were irrelevant and inadmissible to prove past damages, or to prove future damages. The Corenbaum court went further to say that experts could not rely on unadjusted bills to estimate future damages and that the same amounts could not be used to determine non-economic damages.

The crux of the court’s analysis was that the fully billed amounts are irrelevant to prove reasonable value of loss incurred. Case evaluations in the future should completely disregard billed amounts when a plaintiff’s treatment was covered by health insurance. In short, the Corenbaum decision was a glowing affirmation of the Howell court’s reasoning and a powerful defense weapon to reduce exposure in personal injury cases.

Jason Mauck is an associate in the Oakland office.

[1] The court decided two other issues regarding an award of attorney’s fees against a defendant who has been convicted of a felony stemming from the injury causing accident; and 2) whether an award of punitive damages was proper.