Source: https://scocal.stanford.edu/opinion/howell-v-hamilton-meats-34008
Timestamp: 2019-04-21 18:31:26+00:00

Document:
the injured plaintiff did not suffer any economic loss in that amount. (See Civ.
plaintiff ―would otherwise collect from the tortfeasor‖ (Helfend v. Southern Cal.
negligently caused by a driver for defendant Hamilton Meats & Provisions, Inc.
larger amounts billed by the providers were irrelevant and should be excluded.
in full.‖ Accordingly, the court reduced the judgment by $130,286.90.
explained in the CORE declaration.
and the evidence Hamilton presented was insufficient.
We granted Hamilton‘s petition for review.
medical providers on his or her behalf.
The collateral source rule has an evidentiary as well as a substantive aspect.
introduce evidence of premiums paid or contributions made to secure the benefits.
plaintiff‘s net recovery. (Id., subd. (g).) Neither statute applies here.
Medi-Cal is California‘s implementation of the federal Medicaid program.
hospital bill, as the opinion notes the hospital had ― ‗written off‘ ‖ the difference).
This court subsequently reached the same conclusion in Parnell v.
not entitled to recover the reasonable value if his or her actual loss was less.
(b) the reasonable value of the services.
―reasonable medical and other expenses,‖ expresses no different principle.
agreements with those providers and accepted their services.
expenses may otherwise generally exceed the amount reasonably paid or incurred.
negotiated discount be treated in the same way?
applies to gratuitous payments and services. (Rest.2d Torts, § 920A, com. c, subd.
disapproved Arambula‘s holding, nor does this case require that we do so.
incentives for plan members to choose the providers‘ services. (See Stanley v.
difference between that and the billed amount through a lien on the tort recovery.
value of the services even though he or she did not incur liability in that amount.
must be both incurred and reasonable (Civ. Code, §§ 3281, 3282, 3359; Melone v.
When Charitable Gifts Augment Victim Compensation (2003) 53 DePaul L.Rev.
generalization. We briefly explore those complexities below.
standards, and continuing to offer needed services to the community. . . .
to uninsured patients, who do not benefit from providers‘ contracts with the plans.
commercial insurers somewhere in between.‖ (Reinhardt, The Pricing of U.S.
medical costs who are at or below 350 percent of the federal poverty level. (Bus.
closer to those paid by commercial insurers or even below.‖ (The Pricing of U.S.
and to file them with the Office of Statewide Health Planning and Development.
than that the relationship is not always a close one—would be perilous.
generally underdeterred from engaging in risky conduct.
sometimes on the particular government or business entity paying for the services.
is, in largest part, to the insurer.
their prices for particular buyers, ―[b]ut a discounted price is not a payment. . . .
medical services rendered the plaintiff.
representative of either the cost of providing those services or their market value.
exchange for accepting a discounted payment in that case.
paid per the policy, and those payments are not deducted from her tort recovery.
should be recoverable as a collateral source payment, or both. (See, e.g., Lopez v.
167, 169; Moorhead v. Crozer Chester Medical Center, supra, 765 A.2d at pp.
789-791; see also Goble v. Frohman, supra, 901 So.2d at pp. 833-835 (conc. opn.
admissible under the circumstances set out in Civil Code section 3333.1.
generally inadmissible under the evidentiary aspect of the collateral source rule.
the full billed amount is not itself relevant on the issue of past medical expenses.
DISSENTING OPINION BY KLEIN, J.
her medical providers agreed to accept as payment in full from her insurer.
charitable gift]). Neither law nor policy supports such an anomalous outcome.
negotiated rate differential and therefore said sum is not recoverable by plaintiff.
the collateral source rule and the policies underlying the rule.
payment for their services‖ (maj. opn., ante, at p. 23), amounting to $59,691.73.
for all injured plaintiffs, whether or not covered by private insurance.
1. Policy considerations underlying the collateral source rule.
procurement of which the wrongdoer did not contribute. . . .‘ ‖ (Loggie v.
the tortfeasor pays the full cost of its negligence or wrongdoing.
collateral compensation would distort the deterrent function of tort law.
within the meaning of the collateral source rule.
rate differential as nothing more than a discount is, in my view, inappropriate.
negotiated rate differential was not a gratuitous payment by the providers.
benefit covered by the collateral source rule.
not come within the collateral source rule.
windfall recovery by the victim based on potentially inflated medical bills.
this era of managed care.
4. Collateral source rule does not yield a double recovery.
have incurred attorney fees to prosecute the claim for economic damages.
award is not likely to yield a windfall to the plaintiff.
own foresight, and instead, transferring that benefit to the tortfeasor.
consistent with the Restatement Second of Torts.
services; (2) the benefit of the bargain; and (3) the actual amounts paid. (See, e.g.
3282, 3333), it is unpersuasive.
amount the providers agreed to accept as full payment.
to Howell for the reasonable value of her medical treatment.
which will compensate for all the detriment proximately caused‖ by the tort.
bills pursuant to a tripartite contract for which valuable consideration was paid.
which is recoverable by Howell from the tortfeasor.
care needed to treat his or her tortiously caused injuries.
reasonableness and necessity of charges rendered for medical and hospital care.
elsewhere of making that determination.
value of the medical services provided to the plaintiff.
required to treat the tortiously caused injuries.
Any change to the collateral source rule should be left to the Legislature.
and can do so again if it sees fit.
Name of Opinion Howell v. Hamilton Meats & Provisions, Inc.
Basile; Law Offices of J. Michael Vallee and J. Michael Vallee for Plaintiff and Appellant.
Hinton, Alfert & Sumner, Scott H. Z. Sumner, Jeremy N. Lateiner; Liberson & Wolford and Joel K.
Liberson for Consumer Attorneys of California as Amicus Curiae on behalf of Plaintiff and Appellant.
Tyson & Mendes, Robert F. Tyson, Mark T. Petersen and Kristi Deans for Defendant and Respondent.
Northern California and Nevada as Amicus Curiae on behalf of Defendant and Respondent.
Counsel and DRI-The Voice of the Defense Bar as Amici Curiae on behalf of Defendant and Respondent.
Curiae on behalf of Defendant and Respondent.
Association and California Hospital Association as Amici Curiae on behalf of Defendant and Respondent.
Petition for review after the Court of Appeal reversed a post-verdict order in a civil action. This case presents the following issues: (1) Is the "negotiated rate differential"  the difference between the full billed rate for medical care and the actual amount paid as negotiated between a medical provider and an insurer  a collateral source benefit under the collateral source rule, which allows plaintiff to collect that amount as economic damages, or is the plaintiff limited in economic damages to the amount the medical provider accepts as payment? (2) Did the trial court err in this case when it permitted plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury's award of damages by the negotiated rate differential?
The time for granting or denying review in the above-entitled matter is hereby extended to and including March 30, 2010, or the date upon which review is either granted or denied.
Votes: George, C.J., Kennard, Baxter, Werdegar, Chin, Moreno, and Corrigan, JJ.
counsel requesting each party file a "Certification of Interested Entities and Persons." The completed form should be returned to the court within 15 days.
Proof of service for CIP from attorney John Rices's office.
The law firm of LaFave & Rice and John J. Rice, Esq., counsel of record on appeal for plaintiff and appellant Rebecca Howell, hereby associates attorney Gary L. Simms of the Law Office of Gary L. Simms as counsel of record in this Court.
On application of appellant and good cause appearing, it is ordered that the time to serve and file the answer brief on the merits is extended to and including June 8, 2010.
motion for permission to file answer brief on the merits. In excess of word limit (brief submitted with the motion).
On application of respondent and good cause appearing, it is ordered that the time to serve and file the reply brief on the merits is extended to and including July 27, 2010.
J. Jude Basile, counsel for appellant.
California Medical Association, California Hospital Association, California Dental Association, in support of respondent.
The application of California Medical Association, California Hospital Association, and California Dental Association for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
Respondent's Oversized Reply Brief on the Merits.
By counsel for respondent for permission to file Reply Brief on the Merits in excess of word limit.
by counsel for appellant requesting a 28-day extension to and including September 15, 2010, to file appellant's response to AC brief filed by California Medical Association et al., and any other AC brief filed.
The application of respondent for permission to file an over length reply brief on the merits is granted.
Defendant and Respondent: Hamilton Meats & Provisions, Inc.Attorney: Robert Francis Tyson with permission.
Appellant's application for an extension of time to file appellant's response to amici curiae briefs is hereby granted. Appellant's response to amicus curiae brief filed by The California Medical Association et al., and to any other amici curiae briefs is due on or before September 15, 2010.
The application of AARP for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of The League of California Cities for permission to file an amicus curiae brief in support of neither party is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of Consumer Attorneys of California for permission to file an amicus curiae brief in support of appellant is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of American Insurance Association; Association of California Insurance Companies: Personal Insurance Federation of California; California State Automobile Association Inter-Insurance Bureau; Chartis, Inc; Farmers Insurance Exchange of The Automobile Club; Mercury Insurance Group; State Farm General Insurance Company; State Farm Mutual Automobile Insurance Company for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of Csac Excess Insurance Authority for permission to file an amicus curiae brief in support of appellant and respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
by The Association of Southern California Defense Counsel and DRI-The Voice of The Defense Bar in support of respondent.
The application of The Association of Defense Cousel's of Northern California and Nevada for permission to file an amicus curiae brief in support of respondent is hereby granted.An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of The Association of Southern California Defense Counsel and DRI- The Voice of the Defense Bar for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of Civil Justixe Association of California for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of Allstate Insurance Company for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
The application of Central Region School Insurance Group for permission to file an amicus curiae brief in support of respondent is hereby granted. An answer thereto may be served and filed by any party within 20 days of the filing of the brief.
On application of appellant and good cause appearing, it is ordered that the time to serve and file appellant's consolidated response to amici curiae briefs is hereby extended to and including October 25, 2010.
Defendant and Respondent: Hamilton Meats & Provisions, Inc.Attorney: Mark Taylor Petersen Answer by Hamilton Meats & Provisions, Inc. To Amicus Curiae Briefs of (1) AARP, and (2) Consumer Attorneys of California.
The parties are ordered to submit supplemental briefs on the following issues: Assuming, for sake of argument, that only amounts that have been paid or remain owing to medical providers are recoverable as damages for past medical expenses, what evidence of such expenses is admissible in a jury trial? Given defendant's concession that a jury properly hears evidence of "gross medical bills" (open. br., p. 52), should this court for guidance in other cases approve or disapprove the posttrial "Hanif" motion procedure used in the trial court? Briefs may be in letter form and are limited to 10 pages. Briefs are to be servered and filed simultaneously by May 5, 2011.
from Southern Calif. Defense Counsel request to file supplemental letter brief.
Sedgwick Law firm : notice of change of firm name to : SEDGWICK LLP.
Request to divide oral argument time, asking to share 10 minutes of time with amicus curiae Association of Southern California Defense Counsel.
The request of respondent to allocate to amicus curiae Association of Southern California Defense Counsel 10 minutes of respondent's 30-minute allotted time for oral argument is granted.
Amicus curiae CSAC Excess Insurance Authority's request for judicial notice, filed August 31, 2010, is granted.
Address for Gary L. Simms updated per State Bar website.
To be filed on Thursday, August 18, 2011 @ 10 a.m.
Rebecca Howell, plaintiff, sued Hamilton Meats for personal injuries she sustained in an automobile accident with a Hamilton Meats employee. At trial, Hamilton Meats conceded that it was liable for negligence but contested the amount plaintiff sought in damages. In particular, Howell argued that the economic damages that she was due were those amounts originally billed by the medical providers (e.g., the hospital and physicians at Scripps Memorial Hospital Encinitas who treated her). Hamilton Meats countered that Howell’s economic damages were instead the amounts ultimately accepted as payment in full by the medical providers after the originally billed amounts were adjusted downwards as a result of agreements between the medical providers and PacifiCare, Howell’s preferred provider organization (PPO). Hamilton Meats filed a motion in limine to exclude evidence of the originally billed amounts that neither the plaintiff nor PacifiCare ultimately paid. The trial court denied this motion but provided that a post-trial Hanif motion could be used by the defendant to address the reduction of the original billed amounts.
At trial, plaintiff presented evidence that the total medical expenses originally billed were $189,978.63. The jury subsequently awarded her this sum for economic damages for past medical expenses. Hamilton Meats filed a post-trial Hanif motion asserting that the damages award should be reduced by a sum of $130,286.90 to reflect the total amount ultimately accepted as payment in full after the originally billed amounts were reduced pursuant to agreements between the medical providers and PacifiCare. Plaintiff opposed the motion arguing that such a reduction in economic damages would violate the collateral source rule. The trial court granted Hamilton Meats’ motion to reduce the past medical damages award. The Court of Appeals reversed the reduction order on the grounds that it violated the collateral source rule.
In the Superior Court of San Diego County, the trial court jury rendered a special verdict finding Hamilton Meats negligently liable and awarding plaintiff Howell economic damages for past medical expenses of $189,978.63, which was the total amount originally billed by the medical providers before being reduced according to agreements between the providers and Howell’s insurer. The trial court (Adrienne A. Orfield, J.) then granted Hamilton Meats’ post-trial Hanif motion to reduce the medical damages award by $130,286.90 to reflect the charges ultimately accepted by the medical providers as payment in full pursuant to agreements between the providers and PacifiCare. The Court of Appeals reversed the reduction order on the grounds that it violated the collateral source rule.
The Supreme Court of California granted Hamilton Meats’ petition for review.
Is the “negotiated rate differential,” which represents the difference between the full billed rate for medical care and the actual amount paid as negotiated between a medical provider and an insurer, a collateral source benefit under the collateral source rule, which allows plaintiff to collect that amount as economic damages, or is the plaintiff limited in economic damages to the amount the medical provider accepts as payment?
Did the trial court err in this case when it permitted plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury’s award of damages by the negotiated rate differential?
The negotiated rate differential is not a collateral source benefit under the collateral source rule and thus the plaintiff is limited in economic damages to the amount the medical provider accepts as payment in full.
No, the trial court did not err when it permitted the plaintiff to present the full billed amount of medical charges to the jury but then reduced the jury’s award of damages by the negotiated rate differential.
The collateral source rule specifies that when a tortiously injured party is at least partially compensated for his injuries from a third party, such as an insurer, unconnected to the defendant tortfeasor, the amount of compensation should not be deducted from the damage award that the injured party would otherwise collect from the tortfeasor. The collateral source rule is not implicated for damages that the plaintiff would hypothetically collect from a third party. Instead, only the amount by which the injured was actually compensated by the third party is subject to the collateral source rule.
The negotiated rate differential represents the difference between the full billed amount for medical care and the actual paid in full amount as negotiated between a medical provider and an insurer. The question of whether the negotiated rate differential implicates the collateral source rule is a question of whether the negotiated rate differential actually compensates the injured party (the plaintiff in this case).
The negotiated rate differential does not implicate the collateral source rule because the differential does not actually compensate or benefit the plaintiff. The rate differential is not given as compensation for the plaintiff’s injuries but instead in order to benefit insurers. According to the Court, this follows from the fact that the plaintiff never faced liability for the medical providers’ full bills because when the plaintiff incurred the medical charges, the medical providers had already reached an agreement with PacifiCare’s PPO members on the reduced price of the medical treatment. The plaintiff never incurred the amount originally billed and thus the plaintiff may not recover it as economic damages.
In situations where the provider has, because of a prior agreement, accepted less than the full billed amount as payment, evidence of the full billed amount “is not itself relevant on the issue of past medical expenses.” However, in this case, the defendant Hamilton Meats conceded that it was proper for the plaintiff to present the full billed amount of medical charges to the jury. Evidence that a plaintiff’s medical provider accepted as full payment an amount less than the amount originally billed is relevant to prove the plaintiff’s economic damages for past medical expenses. However, such evidence is generally inadmissible at trial because of the collateral source rule. The trial court was right to rule that the plaintiff’s recovery as economic damages was limited to the amount her medical providers had accepted as payment in full from the plaintiff and her insurer.
Concurring: Cantil-Sakauye, C.J., Kennard, Baxter, Chin, and Corrigan, JJ.
Hanif v. Housing Authority, 200 Cal. App. 3d 635 (1988).
Nishihama v. City and County of San Francisco, 93 Cal. App. 4th 298 (2001).
Olszewski v. Scripps Health, 30 Cal. 4th 798 (2003).
Helfend v. Southern Cal. Rapid Transit Dist., 2 Cal. 3d 1 (1970).
Parnell v. Adventist Health System/West, 109 P.3d 69 (2005).
California Senate Approves Bill to Overturn Howell vs. Hamilton Meats Supreme Court Decision, INSURANCE NEWS NET.COM, http://insurancenewsnet.com/article.aspx?id=344391 (May 31, 2012).
SCOCAL, Howell v. Hamilton Meats , 52 Cal. 4th 541, 257 P.3d 1130, 129 Cal. Rptr. 3d 325 available at: (https://scocal.stanford.edu/opinion/howell-v-hamilton-meats-34008) (last visited Sunday April 21, 2019).

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