Filed 4/27/17

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION ONE

BRIAN CUEVAS, a Minor, etc., et al.,

Plaintiffs and Respondents,

v.

CONTRA COSTA COUNTY,

Defendant and Appellant.

 A143440 & A144041

 (Contra Costa County

 Super. Ct. No. MSC09-01786)

Plaintiff Brian Cuevas, through his guardian ad litem, brought an action for 

medical malpractice against defendant the County of Contra Costa, among others, arising 

out of injuries he sustained at birth. A jury awarded him $9,577,000 as the present cash 

value of his future medical and rehabilitation care expenses. Defendant appeals from the 

damages verdict, asserting, among other things, that the trial court erred in excluding 

evidence that health insurance benefits under the Patient Protection and Affordable Care 

Act (ACA) (Pub.L. No. 111-148 (Mar. 23, 2010) 124 Stat. 119) would be available to 

mitigate plaintiff’s future medical costs. We agree that the trial court erred in ruling that 

evidence of future ACA benefits is inadmissible. We reverse the judgment and remand 

the case for a new trial on the amount of plaintiff’s future medical damages. In light of 

our conclusion, we also reverse the postjudgment orders awarding costs and expert fees. 

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

Background

Because defendant does not contest the jury’s findings of liability and proximate 

cause, we need not address the facts of this case in great detail. Plaintiff suffered 
2

irreversible brain damage in utero while his mother’s pregnancy was being managed by 

Dr. Teresa Madrigal, a physician employed by defendant. Plaintiff is the surviving twin 

of a monochorionic-diamniotic pregnancy—a condition whereby identical twins share a 

placenta, but have separate amniotic sacs. 

When plaintiff’s mother reported for an appointment at 37 weeks and six days

pregnant, only one fetal heartbeat could be detected. She was transferred to a hospital by 

ambulance, where the twins were delivered via caesarian section. Plaintiff’s twin had 

died, and plaintiff had suffered a hypoxic brain injury. As a result, plaintiff has a very 

low verbal IQ and will never be a functional reader. He also has serious language

communication difficulties, significant behavioral problems, and has been diagnosed with 

cerebral palsy. Though he has severe developmental delay, he is sociable. He is toilet 

trained and can walk, run, and feed himself. In the future, he will be able to feed, dress, 

and bathe himself. However, he will be dependent on others for his personal care and 

safety for the rest of his life. 

On April 19, 2010, plaintiff, through his guardian ad litem, filed a first amended 

complaint (FAC) against Contra Costa County Health Services and 13 other defendant 

health care providers and medical centers. The FAC alleges two causes of action:

(1) medical malpractice as to plaintiff, and (2) negligent infliction of emotional distress as 

to his mother.

1

Plaintiff’s theory at trial was that he sustained his injury because 

Madrigal breached the applicable standard of care by failing to schedule his delivery 

prior to 37 weeks’ gestation. The case was tried to a jury, which found in plaintiff’s 

favor on liability. Defendant does not contest this finding on appeal.

Plaintiff’s and Defendant’s Life Care Plans

During discovery, plaintiff disclosed a life care plan prepared by Jan Roughan, in 

which she provided her opinion as to the kind of medical and rehabilitative care he will 

 

1

Plaintiff’s mother’s claims are not at issue in this appeal.
3

need for the rest of his life, along with the projected costs for each specific care item. 

Her plan was based on the recommendations of medical specialists who testified on 

plaintiff’s behalf. As to future medical costs, the plan does not account for service 

discounts associated with Medi-Cal, even though plaintiff is currently receiving Medi-Cal 

benefits. Nor does it reflect negotiated discounts that would potentially be available 

under insurance procured through the ACA. Instead, Roughan determined future costs

for plaintiff’s medical care by referencing a national database that reflects the average 

charges billed for each type of service. 

Defendant’s life care planner, Linda Olzack, prepared life care plans based on 

services recommended by a defense pediatric neurologist. In contrast to Roughan, 

Olzack’s plans reflect three alternate cost scenarios, including one in which plaintiff

would continue to be covered by Medi-Cal, one in which he would procure private 

insurance under the ACA, and one in which he would pay for his expenses out of pocket. 

With respect to the private pay scenario, Olzack did not rely on amounts billed by 

healthcare providers in calculating future medical expenses. Instead, she contacted local 

health care providers and asked them how much individuals without insurance are

required to pay. These rates typically are less than what providers would state on a bill. 

Olzack’s alternative plans reflect the wide variations that presently exist in 

medical charging practices. Her Medi-Cal life care plan reflects reimbursement rates that 

appear to be substantially lower than the rates paid by persons without insurance. For 

example, one category of expenses reflects a more than 60 percent difference between the 

private pay rate and the Medi-Cal rate. Within her plans, she also took into consideration 

the free benefits that plaintiff is currently entitled to receive from the regional center and 

public school system. 

Olzack also prepared a report comparing the costs for the services itemized in 

Roughan’s plan with the Medi-Cal payment rate for the same goods and services, 

revealing that Roughan’s costs were substantially higher. For example, the cost for a 
4

wide variety of physician visits listed in Roughan’s plan were four to six times higher 

than the corresponding Medi-Cal rates.2 

Evidentiary Rulings

On January 10, 2014, plaintiff filed various motions in limine, including one 

seeking to exclude evidence of collateral source payments from Medi-Cal and other 

public sources, and another to exclude evidence of future collateral sources. Plaintiff also 

filed a motion to exclude evidence, opinion, or argument regarding any possible future 

medical benefits available through ACA-mandated insurance. In part, plaintiff asserted

that Civil Code section 3333.1 (section 3333.1), a statute contained within the Medical 

Injury Compensation Reform Act (MICRA), does not allow the introduction of evidence 

regarding future collateral source medical benefits. He contended defendant’s expert 

should be prohibited from offering opinions as to such evidence. 

On July 14, 2014, defendant filed further briefing on the issue of future medical 

benefits. In support of its argument that evidence of prospective ACA benefits should be 

offered to the jury, it included a declaration prepared by Thomas J. Dawson, an expert on 

the ACA and regulatory and health care policy, who worked for the United States House 

of Representatives during the passage of the ACA and was directly involved in 

negotiating key provisions of the legislation. 

After hearing argument, the trial court ruled that defendant could not present as a 

collateral-source offset any evidence concerning publicly funded benefits available 

through regional centers and the public school system. Relying on section 3333.1, it also 

ruled defendant could not introduce any evidence of Medi-Cal benefits, nor could it

introduce evidence of ACA insurance benefits. With respect to Medi-Cal, the court ruled 

that Medi-Cal is not subject to MICRA’s exception to the collateral source rule. With 

 

2 Roughan also estimated the cost of a surgical procedure to correct plaintiff’s 

strabismus (crossed eyes) at $14,785. Olzack’s report stated that the Medi-Cal 

reimbursement rate for this procedure would be only $4,527. 
5

respect to the ACA, the court also reasoned: “I believe that there is no reasonable 

certainty that that benefit will be in place, and that’s something that—you have to cross 

that barrier in order to be considered as something that should be presented to the jury for 

factual consideration.” 

On August 28, 2014, defendant filed a request for clarification regarding the 

presentation of evidence as to plaintiff’s future medical expenses. Specifically, it 

asserted Roughan had relied on “inflated” billed amounts in calculating the cost of 

plaintiff’s future medical care, rather than the lower amounts providers actually accept as 

full payment. Defendant questioned whether the trial court had intended to allow the 

introduction of such evidence when it made its earlier rulings on plaintiff’s motions in 

limine. Defendant suggested the evidence should instead be limited to the amounts 

health care providers will accept in the future as full payment. 

Defendant noted Roughan’s life care plan did not reflect the substantially lower 

amounts that would be accepted as full payment under Medi-Cal or private insurance.3 It 

relied heavily on Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541

(Howell) and Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308 (Corenbaum) in 

arguing that plaintiff’s recovery should be limited to the amount he proves is likely to be 

paid to providers for his future medical care, not the amount his providers are likely to 

bill. It contended that the billed rates reflected in Roughan’s plan were therefore 

inadmissible. 

Defendant also asked whether it would be allowed to introduce evidence 

concerning the range of amounts healthcare providers accept as full payment, without 

making reference to the actual sources (i.e., Medi-Cal or private insurance) of those 

payments. Defendant asserted that introducing these reduced amounts “would assist the 

 

3

The parties stipulated that plaintiff’s medical expenses up to the time of trial 

totaled $55,780. 
6

jury in evaluating the reasonable value of plaintiff’s future medical care, without 

violating the collateral source rule by disclosing the third party source of payment.” It

reasoned “[t]he fact that Medi-Cal does not fall within the exception to the collateral 

source rule of MICRA is completely separate from the issue of whether the County may 

introduce evidence regarding the amounts Medi-Cal will pay for a service, without 

referencing the source of payment. In the former scenario, the County would be seeking 

to be completely relieved from paying for a service that Medi-Cal will cover, while in the 

latter, the County simply seeks to provide the jury with all of the information needed to 

determine the reasonable value of plaintiff’s future medical care.” 

The trial court stated that it would allow evidence of Roughan’s reliance on the 

national database to project plaintiff’s medical costs into the future “because it’s not 

relying on past billed amounts.” The court also indicated it would permit Olzack to 

testify that she had based her own calculations on the lower amounts that are accepted by 

healthcare providers under certain circumstances (the private pay scenario). However, 

defendant would not be allowed to attempt to establish that future billed amounts do not 

reflect the amounts that will actually be accepted by the providers. 

Defendant also sought a modified version of CACI No. 3903A (with the 

modification italicized): “To recover damages for future medical expenses, plaintiff 

Brian Cuevas must prove the reasonable cost of reasonably necessary medical care that 

he is reasonably certain to need in the future. The damages awarded for future medical 

expenses cannot exceed the amount that is reasonably certain to be owed or paid to 

plaintiff’s healthcare providers in the future for that care.” The trial court rejected

defendant’s proposed modification. 

Evidence Offered at Trial

Roughan’s life care plan was admitted in evidence during her testimony. 

Subsequently, Olzack was permitted to testify about her private-pay life care plan, the 

only version of her three plans that the trial court allowed into evidence. Olzack noted
7

that her plan identifies the providers her office contacted to obtain her cost estimates. As 

to the specific services listed for future medical care, her task was not to make care 

recommendations, but only to determine how much the recommended services will cost. 

Unlike Roughan, Olzack did not rely on the charged amounts that appear in national

health care cost databases. Notwithstanding their different approaches, Olzack’s privatepay plan reflects essentially the same costs as Roughan’s plan for many life care 

categories. 

Based on a projected remaining life expectancy of 74 years, plaintiff’s economist 

calculated the total value of his future care expenses under Roughan’s life care plan to be

$285 million, with a present value of nearly $29 million. In contrast, defendant’s

economist took the rates to which Olzack was permitted to testify and concluded that the 

present value of plaintiff’s future service needs totaled somewhere between $3,233,670 

and $3,340,222. Defendant claims these estimates would have been significantly lower if 

Olzack had been able to factor into her analysis the free benefits plaintiff receives from 

the regional center and the school system, as well as discounted medical care rates that 

would apply under Medi-Cal or a private insurance policy. 

Jury Instructions and Verdict

The jury found in favor of plaintiff and awarded $100 million for future medical, 

hospital, surgical, and rehabilitation care expenses, which it reduced to $9,577,000 in 

present cash value. The total represents approximately one-third of what plaintiff had 

sought, and about three times the total in the private pay version of Olzack’s plan that the 

trial court admitted into evidence. Following posttrial motions, defendant appealed from 

the judgment and postjudgment orders awarding plaintiff costs and expert witness fees. 
8

DISCUSSION

I. Issues and Standard of Review

On appeal, defendant asserts the trial court committed four categories of error, all 

pertaining to its rulings regarding evidence of the costs for plaintiff’s future care.

4

 

Defendant claims the court erred in (1) barring evidence under section 3333.1 of future 

benefits that will be available to plaintiff through the ACA; (2) ruling that his future 

medical expenses could be based upon figures derived from billed rates; (3) relying on 

the collateral source rule to exclude evidence concerning insurance benefits available 

under the ACA; and (4) relying on the collateral source rule to exclude evidence of free 

regional center and educational benefits.

Trial courts ordinarily enjoy broad discretion with respect to the admission and 

exclusion of evidence in ruling on motions in limine. (Katiuzhinsky v. Perry (2007) 

152 Cal.App.4th 1288, 1294.) Nonetheless, that discretion “is limited by the legal 

principles applicable to the case.” (Ibid.) Where a trial court’s exclusion or admission of 

evidence “ ‘ “ ‘transgresses the confines of the applicable principles of law,’ ” ’ ” it is an 

abuse of discretion. (Ibid.) Thus, to determine whether the trial court abused its 

discretion here, we must first determine what the law permits and requires with respect to 

the recovery of future medical damages under MICRA.

 

4

Plaintiff asserts defendant cannot show prejudice because it did not ask the jury 

to segregate the elements of his future medical damages. By constitutional mandate, we 

cannot reverse a judgment based on instructional error, evidentiary error, or procedural 

error unless, based on “an examination of the entire cause, including the evidence,” we 

are “of the opinion that the error complained of has resulted in a miscarriage of justice.” 

(Cal. Const., art. VI, § 13.) Under this standard, a trial court’s errors require reversal if it 

is reasonably probable that they affected the verdict. (College Hospital Inc. v. Superior 

Court (1994) 8 Cal.4th 704, 715.) “We have made clear that a ‘probability’ in this 

context does not mean more likely than not, but merely a reasonable chance, more than 

an abstract possibility.” (Ibid.) We conclude defendant’s claims raise more than an 

“abstract possibility” as to the effects of the alleged errors on the damages awarded, and 

elect to address its arguments on their merits. 
9

II. The Collateral Source Rule and Section 3333.1

The collateral source rule provides that “ ‘if an injured party received some 

compensation for his injuries from a source wholly independent of the tortfeasor, such 

payment should not be deducted from the damages which the plaintiff would otherwise 

collect from the tortfeasor.’ [Citation.] Therefore, the collateral source rule precludes a 

defendant from presenting evidence that an injured plaintiff’s medical expenses have 

been paid by an independent source. [Citation.] While the rule may effectively allow a 

plaintiff to receive a double recovery, ‘ “[t]he collateral source rule expresses a policy 

judgment in favor of encouraging citizens to purchase and maintain insurance for 

personal injuries and for other eventualities. . . . To permit the defendant to tell the jury 

that the plaintiff has been recompensed by a collateral source for his medical costs might 

irretrievably upset the complex, delicate, and somewhat indefinable calculations which 

result in the normal jury verdict. . . .” ’ ” (Hernandez v. California Hospital Medical 

Center (2000) 78 Cal.App.4th 498, 504–505 (Hernandez).)

In response to a medical malpractice insurance crisis in California, the Legislature 

in 1975 adopted MICRA. (Barme v. Wood (1984) 37 Cal.3d 174, 178–179 (Barme).)

Section 3333.1 alters the collateral source rule in medical malpractice cases. A medical 

malpractice defendant may introduce evidence of “any amount payable as a benefit to the 

plaintiff as a result of the personal injury pursuant to the United States Social Security 

Act, any state or federal income disability or worker’s compensation act, any health, 

sickness or income-disability insurance, accident insurance that provides health benefits 

or income-disability coverage, and any contract or agreement of any group, organization, 

partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, 

dental, or other health care services.” (§ 3333.1, subd. (a), fn. omitted.) If the medical 

malpractice defendant introduces evidence of the plaintiff’s collateral source benefits, the 

plaintiff may introduce evidence of any payments made to obtain these benefits. (Ibid.) 

This section also provides that “[n]o source of collateral benefits introduced pursuant to 
10

subdivision (a) shall recover any amount against the plaintiff nor shall it be subrogated to 

the rights of the plaintiff against a defendant.” (§ 3333.1, subd. (b).) Under section

3333.1, the jury is informed of collateral source benefits and may elect not to award 

damages that duplicate those benefits. (Barme, at p. 179, fn. 5.) 

Courts have held that section 3333.1 does not apply to payments made on behalf 

of an injured party by Medi-Cal (Welf. & Inst. Code, § 14000 et seq.).5(Hernandez, 

supra, 78 Cal.App.4th at p. 506.) In Brown v. Stewart (1982) 129 Cal.App.3d 331, 341

(Brown), the appellate court concluded that applying section 3333.1 to Medicaid 

payments for medical services would create a direct conflict with provisions of federal 

law that require states to seek reimbursement of Medicaid payments from third party 

tortfeasors. Therefore, the collateral source rule continues to apply in medical 

malpractice cases as to Medi-Cal payments.

III. Evidence Regarding Future Benefits Is Admissible Under Section 3333.1

A. Section 3333.1 Is Ambiguous with Respect to Awards of Future Damages

The trial court ruled that section 3333.1 does not allow the introduction of 

evidence regarding future health insurance benefits—only past benefits. Defendant

asserts that section 3333.1 allows the introduction of future as well as past collateral 

source medical benefits, thereby allowing the jury to decide whether to reduce a 

plaintiff’s damages award for future medical expenses. 

The issue is one of statutory interpretation. A court’s “primary task in interpreting 

a statute is to determine the Legislature’s intent, giving effect to the law’s purpose. 

[Citation.] [The court] consider[s] first the words of a statute, as the most reliable 

indicator of legislative intent. [Citation.] ‘ “ ‘Words must be construed in context, and 

statutes must be harmonized, both internally and with each other, to the extent

 

5

“Medi-Cal is California’s implementation of the federal Medicaid program.” 

(Howell, supra, 52 Cal.4th at p. 553, fn. 3.)
11

possible.’ ” ’ ” (Tuolumne Jobs & Small Business Alliance v. Superior Court (2014) 

59 Cal.4th 1029, 1037.) If, however, “ ‘the statutory language may reasonably be given 

more than one interpretation, “ ‘ “courts may consider various extrinsic aids, including 

the purpose of the statute, the evils to be remedied, the legislative history, public policy, 

and the statutory scheme encompassing the statute.” ’ ” ’ ” (People v. Cornett (2012) 

53 Cal.4th 1261, 1265.)

Again, section 3333.1 provides, in relevant part: “In the event the defendant so 

elects . . ., he may introduce evidence of any amount payable as a benefit to the plaintiff 

as a result of the personal injury pursuant to the United States Social Security Act, any 

state or federal income disability or worker’s compensation act, any health, sickness or 

income-disability insurance, accident insurance that provides health benefits or incomedisability coverage, and any contract or agreement of any group, organization, 

partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, 

dental, or other health care services. Where the defendant elects to introduce such 

evidence, the plaintiff may introduce evidence of any amount which the plaintiff has paid

or contributed to secure his right to any insurance benefits concerning which the 

defendant has introduced evidence.” (§ 3333.1, subd. (a), italics added, fn. omitted.) 

Defendant argues that the statute’s use of the term “amount payable,” instead of “amount 

paid,” “contemplates that evidence of future benefits should be admissible as well.”6 We 

agree.

While the meaning of “paid” as used in subdivision (a) of this section is clear, in 

that it references that amount which a plaintiff has already paid to obtain insurance 

benefits, we agree with defendant that “amount payable” is ambiguous insofar as it could 

apply to amounts that will be payable in the future as well as to amounts that were 

 

6 Amici curiae the California Medical Association, California Dental Association,

and California Hospital Association, on behalf of defendant, assert that the plain language 

of section 3333.1, subdivision (a), “applies to economic damages ‘payable’ in the future.” 
12

payable in the past.7 An argument can be made that “amount payable” should be 

restricted to past medical expenses because the statute only includes an offset for those 

premiums that a plaintiff has already “paid or contributed.” However, section 3333.1 

does not explicitly limit the presentation of a defendant’s evidence to past benefits. 

Preliminarily, we observe we are not alone in entertaining the notion that section 

3333.1 permits the introduction of evidence of future collateral source benefits that a 

plaintiff is likely to receive. A footnote in Fein v. Permanente Medical Group (1985) 

38 Cal.3d 137, 165 (Fein) supports the conclusion that available medical insurance can 

be used by the jury to reduce a medical malpractice plaintiff’s future medical damages 

award.

8

 (Fein, at p.165, fn. 21.) In Fein, the trial court used an anomalous procedure in 

implementing section 3333.1. It did not permit evidence of collateral source benefits to 

be introduced into evidence. Rather, because the amount of such benefits was not in 

dispute, the court ruled that it would simply reduce the verdict by the amount of the 

benefits. Neither party objected. (Fein, at pp. 146, fn. 2, 165, fn. 21.) Thereafter, the 

jury awarded, inter alia, $63,000 in future medical expenses, and the trial court ordered 

the defendant to pay the first $63,000 of those expenses “not covered by medical 

insurance provided by plaintiff’s employer, as such expenses were incurred.” (Id. at 

pp. 145–146.)

Although this reimbursement procedure was not raised as an issue on appeal, the 

Supreme Court observed in the footnote referenced above that the plaintiff did “raise a 

 

7 Merriam-Webster’s online dictionary defines “payable” as “that may, can, or 

must be paid.” (http://www.merriam-webster.com/dictionary/payable, as of Apr. 27, 

2017.)

8

Plaintiff’s cites to two passages from Howell, supra, 52 Cal.4th 541 asserting 

that the court’s “consistent use of the past tense in describing the operation of [section 

3333.1] leaves little doubt about the court’s view that the section does not apply to future 

benefits.” The assertion is not persuasive as the court was clearly not intending to 

address the proposition that plaintiff advances. 
13

minor contention . . . which is somewhat related to this matter.” (Fein, supra, 38 Cal.3d 

at p. 165, fn. 21.) The court explained: “In awarding damages applicable to plaintiff’s 

future medical expenses, the trial court indicated that defendant was to pay the first 

$63,000 of such expenses that were not covered by employer-provided medical 

insurance. Plaintiff, pointing out that he may not be covered by medical insurance in the 

future, apparently objects to any reduction of future damages on the basis of potential 

future collateral source benefits. Under the terms of the trial court’s judgment, however, 

defendant’s liability for such damages will be postponed only if plaintiff does in fact 

receive such collateral benefits; thus, it is difficult to see how plaintiff has any cause to 

complain about this aspect of the award. Indeed, if anything, the trial court may have 

given plaintiff more than he was entitled to, since it did not reduce the jury’s $63,000 

award by the collateral source benefits plaintiff was likely to receive, but instead imposed 

a continuing liability on defendant to pay up to a total of $63,000 for any noncovered 

medical expenses that plaintiff may incur in the future as a result of the injury. 

Defendant has not objected to this portion of the judgment.” (Ibid., first italics in orig., 

second italics added.)

Concededly, the relevant language in Fein appears to be dicta; however, in support 

of its argument, defendant also draws our attention to several federal court cases holding 

that section 3333.1 allows the admission of evidence of future insurance benefits. In 

Brewington v. United States (C.D.Cal. July 24, 2015, No. CV 13-07672-DMG (CWx)) 

2015 U.S. Dist. LEXIS 97720 (Brewington), the district court concluded section 3333.1 

applies to future benefits, and held that evidence concerning future benefits could be 

introduced at trial. (Id. at pp. *16–*17.) However, that decision noted the Ninth Circuit 

had not yet explicitly held that section 3333.1 applies to actions under the Federal Tort 

Claims Act (28 U.S.C. § 2671 et seq.). (Brewington, at p. *17.) Nevertheless, it relied on 

unpublished California authority and a district court case, Silong v. United States

(E.D.Cal. Sept. 5, 2007) 2007 U.S. Dist. LEXIS 68724, at pp. *13–*18 (Silong), in 
14

finding it “appropriate to take insurance benefits available under the ACA into 

consideration in calculating reasonable future life care plan needs.” (Brewington, at 

p. *17.)9 Because we conclude the term “amount payable” is ambiguous, we turn to 

extrinsic interpretation aids. 

B. Purpose of MICRA and Public Policy

We recently had occasion to reflect on the significant reform created by MICRA 

legislation. “ ‘In May 1975, the Governor—citing serious problems that had arisen 

throughout the state as a result of a rapid increase in medical malpractice insurance 

premiums—convened the Legislature in extraordinary session to consider measures 

aimed at remedying the situation. In response, the Legislature enacted . . . MICRA . . ., a 

lengthy statute which attacked the problem on several fronts.’ [Citation.] ‘In broad 

outline, the act . . . sought to curtail unwarranted insurance premium increases by 

authorizing alternative insurance coverage programs and by establishing new procedures 

to review substantial rate increases, and . . . attempted to reduce the cost and increase the 

efficiency of medical malpractice litigation by revising a number of legal rules applicable 

to such litigation.’ ” (Chan v. Curran (2015) 237 Cal.App.4th 601, 607, fn. omitted; see 

American Bank & Trust Co. v. Community Hospital (1984) 36 Cal.3d 359, 363–364.)

Defendant asserts that as a matter of practice and policy, maintaining a distinction 

between past and future insurance benefits “makes no sense” because of the public’s 

strong interest in containing medical malpractice liability. We note “[t]he cases agree 

that MICRA provisions should be construed liberally in order to promote the legislative 

interest in negotiated resolution of medical malpractice disputes and to reduce 

 

9 Another federal case cited to by defendant in its reply brief assumed, without 

deciding, that section 3333.1 applies to future collateral source benefits. (S.H. v. United 

States (E.D.Cal. Oct. 29, 2014, Civ. No 2:11-cv-01963-MCE-DAD) 2014 Dist. LEXIS 

154222.) The court noted, however, that the issue “does not appear to have a clear 

answer.” (Id. at p. *9.)
15

malpractice insurance premiums.” (Preferred Risk Mutual Ins. Co. v. Reiswig (1999) 

21 Cal.4th 208, 215.)

As the Supreme Court stated in Fein: “Because section 3333.1, subdivision (a) is 

likely to lead to lower malpractice awards, there can be no question but that this provision 

. . . directly relates to MICRA’s objective of reducing the costs incurred by malpractice 

defendants and their insurers. And, as we have seen, the Legislature could reasonably 

have determined that the reduction of such costs would serve the public interest by 

preserving the availability of medical care throughout the state and by helping to assure 

that patients who were injured by medical malpractice in the future would have a source 

of medical liability insurance to cover their losses.” (Fein, supra, 38 Cal.3d at p. 166.) 

Interpreting the statute as abrogating the collateral source rule with respect to future 

medical benefits as well as past benefits is consistent with the legislative purpose of 

reducing malpractice insurance costs.

C. Legislative History

The legislative history of section 3333.1 also supports our conclusion, as it 

suggests the Legislature intended to allow evidence of benefits payable both in the past 

and in the future.10 

Assembly Bill No. 1 (1975-1976 2d Ex. Sess.) (Assem. Bill 1) was enacted and 

codified as section 3333.1. All of Assem. Bill 1’s predecessor bills, including Assembly 

Bill Nos. 21 (1975-1976 2d Ex. Sess., as introduced May 28, 1975 (Assem. Bill 21), § 2) 

and 27 (1975-1976 2d Ex. Sess.) as introduced June 2, 1975 (Assem. Bill 27), § 2), 

identified the Legislature’s desire to eliminate duplicative damages, including duplicative 

future damages, “for the cost of medical care in actions for personal injuries against 

health care providers or health care institutions when such care has already been or will 

 

10 We grant defendant’s request for judicial notice of the legislative history of 

section 3333.1.
16

be provided by a collateral source.” (Sen. Bill No. 697 (1975-1976 Reg. Sess.) as 

amended May 13, 1975 (Sen. Bill 697), § 3, subd. (d), italics added; accord Assem. 

Bill 21; Assem. Bill No. 22 (1975-1976 2d Ex. Sess.) as amended Aug. 4, 1975 (Assem. 

Bill 22), § 3, subd. (c); Assem. Bill 27; Assem. Bill No. 1997 (1975-1976 Reg. Sess.) as 

introduced Apr. 21, 1975, § 2; see also Assem. Bill No. 1943 (1975-1976 Reg. Sess.) as 

introduced Apr. 17, 1975, § 2, containing substantially similar language.) 

While “[p]rior unpassed bills generally have little value in showing legislative 

intent” (Medical Board v. Superior Court (2003) 111 Cal.App.4th 163, 181), here the 

predecessor bills are instructive. This is because the Assembly Committee on Judiciary 

acknowledged the relationship between Assem. Bill 1 and its predecessor bills, stating 

that Assem. Bill 1 “incorporates the concepts or language of the following assembly bills 

introduced during the regular or special session,” referencing Assem. Bills 21 and 27. 

Since the adopted bill, Assem. Bill 1, incorporated “the concepts or language” of the

prior bills, it is not unreasonable to conclude the legislative intent to extend the statute’s 

reach to future damages was adopted as well.

11

And while the Legislature used the past tense in section 3333.1, subdivision (a) 

with respect to a plaintiff’s right to offer evidence regarding the amount he or she “has 

paid or contributed” to secure a collateral source benefit, prior versions of the bills, 

including those that expressly provided that a defendant could introduce evidence of 

future care that “will be provided by a collateral source,” contained this same language

concerning the amount a plaintiff “has . . . paid or contributed.” (Sen. Bill 697; Assem. 

Bill 22.) This suggests the Legislature did not understand the use of “paid or 

contributed” to restrict the term “amount payable” to past collateral source benefits only. 

Further, our interpretation is consistent with the cardinal principle of statutory 

 

11 We disagree with plaintiff’s contention that the Legislature’s statements of 

intent should be ignored because they were omitted from Assem. Bill 1. 
17

construction that “ ‘we are required to give it an interpretation based upon the legislative 

intent with which it was passed.’ ” (Friends of Mammoth v. Board of Supervisors (1972) 

8 Cal.3d 247, 256.) In sum, we conclude section 3333.1 permits the introduction of 

evidence regarding future as well as past medical benefits. The trial court thus erred in 

relying on this section to bar defendant from introducing evidence of future benefits.12

D. The Collateral Source Rule and Howell

Defendant asserts the trial court erred independent of section 3333.1 by relying on 

the collateral source rule to exclude evidence of the ACA and the amounts that healthcare 

providers typically accept as payment for their services. Defendant relies on Howell, 

supra, 52 Cal.4th 541 for the proposition that negotiated payment amounts and “the 

ACA’s guaranteed issue and renewal requirements are highly probative because they . . . 

are ‘of substantial probative value’ in determining the reasonable value of plaintiff’s 

medical services.”13 Defendant’s reasoning is persuasive.

Howell addressed whether a plaintiff could recover from a tortfeasor economic 

damages for amounts billed by a medical provider in excess of the discounted sum the 

provider agreed to accept as full payment for past medical services pursuant to a 

preexisting contract with the plaintiff’s health insurance carrier. Howell ultimately 

concluded the plaintiff was limited to recovering the amount actually paid on his behalf 

because the billed amounts did not represent an economic loss the plaintiff incurred. 

(Howell, supra, 52 Cal.4th at pp. 548–549.) 

The Howell court explained it was not abrogating or modifying the collateral 

source rule, it simply found the rule inapplicable: “The rule . . . has no bearing on 

 

12 In fairness to the trial court, it is notable that section 3333.1 was enacted in 1975 

yet it appears no reported California state appellate decision has squarely addressed the 

statute’s application to future medical damages awards. 

13 Defendant also relies on two out-of-state cases that deal with past medical 

damages, not future medical damages, and are therefore not on point. 
18

amounts that were included in a provider’s bill but for which the plaintiff never incurred 

liability because the provider, by prior agreement, accepted a lesser amount as full 

payment. Such sums are not damages the plaintiff would otherwise have collected from 

the defendant. They are neither paid to the providers on the plaintiff’s behalf nor paid to 

the plaintiff in indemnity of his or her expenses. Because they do not represent an 

economic loss for the plaintiff, they are not recoverable in the first instance.” (Howell, 

supra, 52 Cal.4th at pp. 548–549.) Howell affirmed the vitality of the evidentiary aspect 

of the collateral source rule, stating evidence that “payments were made in whole or in 

part by an insurer remains . . . generally inadmissible.” (Id. at p. 567.) The court 

declined to opine as to the relevance or admissibility of the full billed amount with 

respect to noneconomic damages or future medical expenses. (Ibid.) 

The appellate court in Corenbaum addressed issues left open in Howell, supra,

52 Cal.4th at page 567. The court held evidence of the full amount billed for a plaintiff’s 

medical care is not relevant to damages for future medical care or noneconomic damages,

concluding that the admission of such evidence was error. (Corenbaum, supra,

215 Cal.App.4th at pp. 1319, 1330–1333.) The court reasoned the trial court’s erroneous 

admission of such evidence was prejudicial in that case because the record “clearly 

demonstrate[d]” that the damages awards were based on the full amount billed and not on 

the lesser amount the plaintiff’s medical providers had accepted as full payment. (Id. at 

p. 1333.) The court reversed and remanded for a new trial limited to the issue of 

compensatory damages. (Id. at pp. 1333–1334.)

A recent case from the Second Appellate District, Markow v. Rosner (2016) 

3 Cal.App.5th 1027 (Markow), cites to Howell and Corenbaum, explaining: “Our 

Supreme Court has endorsed a market or exchange value as the proper way to think about 

the reasonable value of medical services. [Citation.] This applies to the calculation of 

future medical expenses. [Citation.] For insured plaintiffs, the reasonable market or 

exchange value of medical services will not be the amount billed by a medical provider 
19

or hospital, but the ‘amount paid pursuant to the reduced rate negotiated by the plaintiff’s 

insurance company.’ ” (Markow, at pp. 1050–1051.) 

In Markow, the plaintiffs’ life care planning expert estimated that the amount 

billed for the injured party’s future hospitalizations would be approximately $2 million. 

She also testified that the amount actually paid is usually 50 to 75 percent of the total 

amount billed, while noting that with respect to one particular hospitalization, the injured 

party’s cost had been reimbursed at a much lower rate of 12.9 percent. She also testified 

that “reimbursement rates vary and that there is no one ‘across-the-board, set 

percentage.’ ” (Markow, supra, 3 Cal.App.5th at p. 1051.) The jury awarded $1.3 

million for the cost of future hospitalizations, which the defendant claimed was excessive 

because the plaintiffs’ expert did not consider amounts actually paid for hospitalization. 

(Id. at p. 1050.) If the jury had applied the 12.9 percent rate, he argued, the award for 

future hospitalizations would have been reduced to $260,000. (Id. at p. 1051.) Citing the 

expert testimony, the appellate court found substantial evidence supported the jury’s 

award of $1.3 million, which was roughly halfway between the expert’s 50 to 75 percent 

reimbursement figure. (Ibid.) These cases support the conclusion that the collateral 

source rule is not violated when a defendant is allowed to offer evidence of the market 

value of future medical benefits. 

IV. The ACA

In a related argument, defendant further faults the trial court for preventing it from 

introducing evidence of future benefits that will be available to plaintiff under the ACA

based on its conclusion that it was speculative to assume the ACA will continue to exist. 

It is noteworthy that this case was briefed before the 2016 presidential election, the 

aftermath of which did place the ACA’s continued viability into question. However, in 

spite of recent efforts to abolish or substantially alter the ACA, as of the writing of this 

opinion the ACA remains essentially intact. 
20

Defendant’s expert Dawson’s declaration supports the proposition that plaintiff 

will be able to acquire comprehensive health care insurance going forward. In other 

words, it provides a defense expert assessment of the availability of insurance benefits 

compatible with defense health care expert Olzack’s analysis of sources to finance 

plaintiff’s future need satisfaction. Dawson opined that the ACA is reasonably certain to 

continue well into the future and that plaintiff will be able to acquire comprehensive 

health insurance notwithstanding his disability. Dawson reviewed Roughan’s and 

Olzack’s life care plans and compared them both to plaintiff’s current Medi-Cal coverage 

and to insurance available on the Covered California health care exchange. Dawson 

identified specific California insurance plans that would be available to meet many of his 

needs. He also explained that plaintiff could use funds held in his special needs trust to 

purchase private health insurance, in which case private insurance would pay first, and 

Medi-Cal would have a right to reimbursement from the corpus of the trust only upon his 

death. 

Defendant presented evidence sufficient to support the continued viability of the 

ACA, as well as its application to plaintiff’s circumstances. Accordingly, we conclude 

the trial court’s decision to exclude evidence of future insurance benefits that might be 

available under the ACA on the basis that the ACA is unlikely to continue was an abuse 

of discretion.14 

V. Evidence of Regional Center and School District Services

Defendant asserts the trial court erred in excluding evidence regarding the free 

services that plaintiff is entitled to receive from the regional center and school district. 

Defendant acknowledges that the trial court concluded those benefits did not qualify as 

collateral sources admissible under section 3333.1, but claims the benefits plaintiff 

 

14 We deny plaintiff’s motion for judicial notice of President Donald Trump’s 

executive order dated January 20, 2017, in which he announced his policy to seek the 

prompt repeal of the ACA. The document is not necessary to our decision.
21

receives are not collateral sources at all, relying on two out-of-state cases. Defendant’s 

contention is not persuasive.

As we discussed above, the collateral source rule “provides that if an injured party 

received some compensation for his injuries from a source wholly independent of the 

tortfeasor, such payment should not be deducted from the damages which the plaintiff 

would otherwise collect from the tortfeasor.” (Hrnjak v. Graymar, Inc. (1971) 4 Cal.3d 

725, 729; Helfend v. Southern California Rapid Transit Dist. (1970) 2 Cal.3d 1, 6, 13–

14.) In enacting section 3333.1, the Legislature did not totally abrogate the collateral 

source rule. The Legislature was precise in delineating which sources were to be 

included in this exception to the collateral source rule. Not all payments made by the 

state or the federal government were included. (See, e.g., Brown, supra, 129 Cal.App.3d 

at p. 341 [Medi-Cal payments not covered by § 3333.1].) 

Regional center benefits, like Medi-Cal benefits, are not paid to the disabled 

directly. They are paid to the providers by the Department of Developmental Services. 

The services rendered to plaintiff will be paid for by a regional center funded under the 

comprehensive statutory scheme designed to meet the needs of the developmentally 

disabled. (Welf. & Inst. Code, § 4500 et seq.; see discussion in Association for Retarded 

Citizens v. Department of Developmental Services (1985) 38 Cal.3d 384, 388.) Like 

Medi-Cal payments, regional center benefits do not fall into any category enumerated by 

section 3333.1. Contrary to defendant’s contention, regional centers also have 

subrogation rights enforceable by a lien on a client’s recovery, just as does Medi-Cal. 

(Welf. & Inst. Code, §§ 4659.10, 4659.11, 4659.15.) Although the care is paid for by the 

State of California, we conclude the exception under section 3333.1 is not applicable, and 

the general collateral source rule applies. 

As to the availability of the public schools to address plaintiff’s needs, defendant 

was, in fact, allowed to introduce evidence of benefits he would receive at a public 

school. Defendant presented evidence to support its argument that plaintiff could get 
22

many of his needs met through the public school. Plaintiff offered contrary evidence. 

We find no error. The task of measuring such damages falls to the jury, and its resolution 

of disputed issues of probability and extent of harm will be affirmed if supported by 

substantial evidence. (J.P. v. Carlsbad Unified School Dist. (2014) 232 Cal.App.4th 323, 

341–342.) 

VI. Remaining Issues

As noted above, defendant also argues that the trial court erred in allowing the 

admission of evidence of plaintiff’s future medical expenses that was based upon billed 

rates, and in refusing its related modification to the standard jury instruction on damages 

for future medical care. Because we have concluded that defendant is entitled to a new 

trial on the issue of plaintiff’s future medical costs, we offer some guidance to the trial 

court.

We agree with Corenbaum that while an injured plaintiff is entitled to recover the 

reasonable value of medical services that are reasonably certain to be necessary in the 

future, evidence of the full amount billed for past medical services cannot support an 

expert opinion on the reasonable value of future medical services. (Corenbaum, supra, 

215 Cal.App.4th at pp. 1330–1333.) It does not appear, however, that Roughan used the 

full amount billed for past medical services in making the calculations for her life care 

plan. We observe “the ‘requirement of certainty . . . cannot be strictly applied where 

prospective damages are sought, because probabilities are really the basis for the 

award.’ ” (Behr v. Redmond (2011) 193 Cal.App.4th 517, 533.) At the time of trial, the 

precise medical costs a plaintiff will incur in the future are not known. Nor is it known 

how a plaintiff will necessarily pay for such expenses. It is unknown, for example, what, 

if any, insurance a plaintiff will have at any given time or what rate an insurer will have 

negotiated with any given medical provider for a particular service at the time and 

location the plaintiff will require the medical care. The fact finder is entrusted with the

tasks of evaluating the probabilities based on the evidence presented and arriving at a 
23

reasonable result. If issues arise during retrial, the court is directed to address them in a 

matter not inconsistent with this opinion.15

As to the requested jury modification, we observe the standard jury instruction 

(CACI No. 3903A) states, in relevant part: “To recover damages for future medical 

expenses, [name of plaintiff] must prove the reasonable cost of reasonably necessary 

medical care that [he/she] is reasonably certain to need in the future.” The instruction is 

an accurate statement of the law and is not, on its face, inconsistent with our decision 

here.

During oral argument both sides agreed that if the case is remanded for a trial on 

future medical damages, the jury verdict on future lost earnings should be affirmed. 

Appellant is not disputing this portion of the jury award. Therefore, we affirm the jury 

award of future lost earnings in this case.

DISPOSITION

The judgment is reversed in part. The matter is remanded for a new trial on the 

issue of the amount of plaintiff’s future medical damages. Consequently, the 

postjudgment orders awarding costs and expert fees are also reversed. The jury award of 

future lost earnings is affirmed. The parties are to bear their own costs on appeal. 

 

15 We note much of the costs in plaintiff’s life care plan concerned future expenses 

that do not appear to be covered by medical insurance. Roughan testified that once he 

emancipated at age 22, plaintiff would need to live in a supportive living environment for 

the rest of his life due to his very low IQ level. Rather than a simple residential facility, 

she opined that he would need to be placed in a home that employs personnel who have 

experience caring for brain-injured individuals. Attendant care was priced at the same 

amount in both parties’ life care plans, presumably because it is not covered by Medi-Cal 

or any ACA-sponsored private insurance. 
24

_________________________

Dondero, J.

We concur:

_________________________

Humes, P. J.

_________________________

Margulies, J.
25

Trial Court: Contra Costa County Superior Court

Trial Judge: Hon. Steven K. Austin

Counsel: 

Horvitz & Levy, H. Thomas Watson, Karen M. Bray, Robert H. Wright; Craddick, 

Candland & Conti, W. David Walker; Mauro Lilling Naparty, Richard J. Montes for 

Defendant and Appellant

Cole Pedroza, Curtis A. Cole, Matthew S. Levinson for California Medical 

Association, California Dental Association, and California Hospital Association as Amici 

Curiae on behalf of Defendant and Appellant

Fred J. Hiestand for Civil Justice Association of California as Amicus Curiae on 

behalf of Defendant and Appellant

Alston & Bird, David Venderbush, Brian Boone; California Chamber of 

Commerce, Heather Wallace; U.S. Chamber Litigation Center, Janet Galeria for Chamber 

of Commerce of the United States as Amicus Curiae on behalf of Defendant and 

Appellant

Greines, Martin, Stein & Richland, Robert Olson for Association of Southern 

California Defense Counsel as Amicus Curiae on behalf of Defendant and Appellant

The Veen Firm, William L. Veen, Elinor Leary; Alan Charles Dell’Ario for 

Plaintiff and Respondent

A143440/144041 Cuevas v. Contra Costa County