Court Opinion

ID: 4018899
Source: CourtListenerOpinion
Date Created: 2016-07-26 18:02:41.612083+00
Date Added: 2024-06-11T14:08:01.977520
License: Public Domain

Filed 7/26/16 Frisk v. Cowan CA3
                                          NOT TO BE PUBLISHED
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

           IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
                                     THIRD APPELLATE DISTRICT
                                                       (Amador)
                                                            ----

TARA FRISK,                                                                            C077975

                   Plaintiff and Respondent,                           (Super. Ct. No. 10-CVC-06852)

         v.

CATHERINE MARGARET COWAN,

                   Defendant and Appellant.

         A jury found defendant Catherine Margaret Cowan liable in a personal injury
action, and awarded plaintiff Tara Frisk $3,695,978.59 in compensatory and punitive
damages, including $109,162.59 for past medical expenses and $1,084,457 for future
medical expenses. Cowan appeals, contending the trial court prejudicially erred by (1)
excluding her expert’s testimony regarding average payments accepted by medical
providers as evidence of the reasonable value of medical services provided, and (2)
permitting Frisk to rely on billed amounts alone as evidence of the reasonable value of
medical services provided, especially as Frisk had not shown she was liable to pay the

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entire amount charged. We will reverse the judgment and remand for a retrial on
damages for past and future medical expenses.

                    FACTUAL AND PROCEDURAL BACKGROUND

       Cowan is a diabetic who, as a result of low blood sugar, lost consciousness while
driving her car and collided head-on with Frisk. As a result of her injuries from the
collision, Frisk underwent medical treatment, including a disc replacement surgery,
which was financed through a private financing scheme with Creative Legal Funding
(hereafter the lienholder). Frisk sought medical damages to compensate her for past and
future medical expenses incurred as a result of the collision. In light of the issues raised
on appeal, aside from this brief introduction, we recite only those facts relevant to the
jury’s award of medical damages.

       Prior to trial, Frisk moved in limine to exclude the opinion of Cowan’s expert
witness, Timothy Sells, a life care planner. Based on his deposition testimony, it was
anticipated Sells would present evidence regarding what is generally paid by Medi-Cal
and private insurance for the same medical procedures Frisk had received and was likely
to receive. It was also anticipated Sells would not present any explanation of the
relationship between these reimbursement rates and the amounts providers charged Frisk
for services rendered. Further, it was anticipated Sells would not express an opinion as to
a reasonable value for the surgery Frisk received, but would instead present the range of
what is typically charged. Though the trial court initially denied this motion, it decided
to conduct a foundational hearing pursuant to Evidence Code section 402 before allowing
Sells to testify.

       At the foundational hearing, the parties first argued whether evidence of payment
rates (by Medi-Cal, private insurance, or other government benefits agencies) was
relevant or admissible to establish the reasonable value of medical services provided. At
issue, aside from Sells’s testimony, was an exhibit he planned to present that showed the

                                              2
amounts paid for medical services at local hospitals, with information drawn from a
publicly available data pool. Sells then testified that he would present to the jury
“evidence as to what the usual, customary, and reasonable charges are and what the
average reimbursement rates are for the same service, where applicable and where
available . . . .” He acknowledged that the reimbursement rates were drawn from
instances where there was a private health insurer. He also conceded that he did not
know whether the reimbursement rates “ha[d] anything to do with the reasonable value of
the surgery” and that to opine otherwise would be speculation. He further testified that
information about what a surgeon is typically paid is not available, so he relied on the
typical charges (from the 75th to the 90th percentile) in preparing his testimony.
Ultimately, the trial court ruled that Sells could present his opinion as to the reasonable
value of services provided and how he calculated that amount, but that he could not
reference any average payments by insurance or government agencies.

       Sells ultimately testified to the jury that he had been retained to “evaluate . . . the
costs” associated with the disc replacement surgery Frisk had received and also to look at
the costs related to anticipated future surgeries. He did not challenge the opinion of
Frisk’s expert that the charges for her hospitalization associated with the disc replacement
surgery were reasonable, nor did he have any opinion regarding the reasonableness of the
surgeon’s charges associated with that procedure, though he noted that it was more than
twice what was charged in 90 percent of such cases. Sells acknowledged that he had no
evidence regarding how often the surgeon involved collected the full amount charged
($36,000), but noted the surgeon was paid $9,000 by the lienholder in this case. He also
conceded that the amount the medical provider accepted from a third party was not
relevant to his opinion regarding the reasonableness of any medical charges. With
respect to future surgeries, he opined that a hospital charge that fell between the 75th and
90th percentile would be reasonable. He also acknowledged that the disparity between

                                               3
his projection of reasonable charges for future surgeries and that offered by Frisk’s expert
($317,514) could be accounted for based on his exclusion of $24,000 of necessary
hardware and $4,000 for preoperative and postoperative work, which Sells was not asked
to consider.

       In a further colloquy outside the presence of the jury, Cowan argued that Sells’s
testimony regarding average payments by insurance or government agencies should be
allowed because “the reasonable [value of the services] is the amount that is paid, and it
would be the average amount paid in the general community, is what we have here. It’s
not what’s billed.” In the course of that colloquy, the trial court asked Sells to articulate
his anticipated testimony regarding the reasonable value of future medical services. He
stated he would indicate what the average payments had been for such services, but that
he would not state that those payments were the reasonable value for services because he
was “not sure what reasonable value is.” After considering the matter, the trial court
ruled that it was inappropriate to allow into evidence for the purpose of establishing the
reasonable value of medical services the average payments made by insurers where there
was no evidence Frisk was or would be insured for those procedures. When Sells
returned to his testimony before the jury, he testified based only on the amounts charged
by local providers.

       Cowan also moved in limine to preclude admission of the amounts billed for
medical care, and to prevent Frisk’s expert, Lawrence Lievense, from testifying about
what her future medical charges will be. Cowan’s argument was that the billed amount
(for past or future medical charges) did not reflect the reasonable value of services as a
matter of law, so Frisk was not entitled to an award of damages based on that amount and
the expert could not reasonably rely on such information in forming his opinion. The
trial court reserved ruling on both motions, but ultimately permitted the evidence to be
admitted.

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       Lievense was a healthcare financial administrator, whose job responsibilities
included a focus on medical billing charges and payments. He testified that in assessing
whether the amounts billed for Frisk’s procedures and hospital stays were reasonable, he
“look[ed] at the procedure done and compare[d] that to the same or similar procedures
being done at the same or similar type of facilities.” He would then conduct essentially a
“smell test” to determine if any charges stood out as inappropriate, and then confirm his
analysis by comparing the charges with the range of charges for such services listed in
available databases. In this case, it was Lievense’s opinion that the amounts billed by
providers for medical services rendered to Frisk “fell within the range of usual,
customary, and reasonable” charges.

                                         DISCUSSION

       Cowan contends the trial court made prejudicial evidentiary errors by (1)
permitting Frisk to present amounts charged by medical providers to establish the
reasonable value of her past and future medical damages, and (2) precluding Cowan from
presenting evidence of payments typically received by medical providers for the same
services rendered or anticipated to be rendered to Frisk. On the facts before us, we agree.
Prior to addressing these contentions, however, we must address Cowan’s contention that
Frisk did not provide sufficient evidence to support the conclusion that she was liable to
pay the entire billed amount. As to that contention, we disagree. Cowan also contends
that as a result of the evidentiary errors, she is entitled to a new trial as to all issues, or at
least as to all compensatory damages. We disagree, and will remand to the trial court for
a retrial as to medical damages only.

1.0    Proof of Liability to Pay

       We first address Cowan’s contention that Frisk failed to show she was liable for
the full amount of the lien. Cowan’s claim appears to be that because Frisk did not
present at trial the signed documents reflecting her agreement that she would be liable to

                                                 5
pay the lienholder the full amount billed, Frisk failed to meet her burden in that regard.
Based on the testimony presented at trial, we disagree.

       At trial, a representative of the lienholder testified that prior to its agreement to
purchase the liens from the medical providers, the lienholder required Frisk to sign
documents indicating that she would be liable to pay the lienholder if the lien amount was
not recovered in litigation. Specifically, the representative testified the documents
provide that “Ms. Frisk is responsible for the total amount of the bill regardless of the
outcome of the case.” The representative further testified that she had signed agreements
from Frisk indicating her liability to repay the full billed amount, and that the lienholder
would not have agreed to finance the procedures if Frisk had not agreed to repay the
lienholder. Additionally, in Frisk’s testimony to the jury, she acknowledged that she
knew she would owe a great sum of money when she decided to have surgery and that
her understanding was that she owed the lienholder the full amount billed by the medical
providers. This amounts to substantial evidence to support a finding that Frisk is liable to
repay the full billed amount to the lienholder, thereby making that the “amount incurred”
by plaintiff.

2.0    Medical Damages Evidence

       We next address Cowan’s contentions that the trial court prejudicially erred by
admitting evidence of the amounts billed and excluding evidence of average amounts
accepted by medical providers for purposes of determining the reasonable value of
medical services rendered. As we shall explain, we agree with Cowan’s contentions.

       2.1      Standard of Review

       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 (Katiuzhinsky).) Nonetheless, that discretion “is limited by

                                               6
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 by admitting evidence of the amount billed as evidence of the
reasonable value of medical services or in excluding evidence of average amounts paid as
evidence of the reasonable value of medical services, we must first determine what the
law permits and requires with respect to the recovery of medical damages.

       2.2    Summary of Existing Case Law

       We begin our review of the evolving case law in the area of medical damages with
Hanif v. Housing Authority (1988) 200 Cal.App.3d 635. In that case, we stated that the
appropriate measure of recovery for special damages for medical expenses in a tort action
is “the reasonable value of medical care and services reasonably required and attributable
to the tort.” (Id. at p. 640.) We further held, pursuant to the collateral source rule, that a
plaintiff was entitled to recover medical costs even if a third party, such as a health
insurance provider, has paid the costs. (Id. at pp. 639-640.) Finally, we concluded that
the trial court had erred in awarding the plaintiff in that case special damages for medical
expenses in excess of the amount actually paid for the medical services. (Id. at p. 644.)

       Thereafter, in Katiuzhinsky, supra, 152 Cal.App.4th 1288, we concluded that
where the plaintiff remained liable to pay the full amount billed for medical services
rendered it was error for the trial court to exclude evidence of that amount for purposes of
establishing the reasonable value of services rendered or for calculation of the jury’s
damages award. (Id. at pp. 1291, 1297-1298.) In Katiuzhinsky, the plaintiffs were
injured in an automobile accident and received treatment from medical providers as part
of an arrangement with a financial services company. (Id. at p. 1291.) According to the
arrangement, which was negotiated prior to treatment, the medical providers agreed to
provide services to the plaintiffs in exchange for liens in the full amount billed, the

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plaintiffs agreed to be liable to pay the full lien amounts regardless of recovery in
litigation, and the financial services company agreed to purchase the medical accounts
and the medical providers’ respective lien rights for a price less than the full amount
billed. (Id. at p. 1292.) The trial court, however, excluded any evidence of the amounts
billed and limited the evidence to the discounted amounts the financial services company
paid to purchase the lien rights from the medical providers, despite the plaintiffs’ liability
to repay the full amount of the liens to the financial services company. (Id. at pp. 1291,
1293.)

         In determining that this exclusion of evidence was erroneous, we noted that
though Hanif and other cases had placed a limit on the plaintiffs’ recovery of medical
damages, none had excluded evidence of the billed amount for purposes of determining
the reasonable cost of services, and some had suggested the billed amounts were more
appropriate than insurance-negotiated rates in assessing general damages. (Katiuzhinsky,
supra, 152 Cal.App.4th at pp. 1295-1296.) We also rejected the contention that because
the arrangement—providing for a purchase of the medical providers’ lien rights—was
made prior to treatment being rendered, the situation was similar to insured persons who
receive treatment at reduced, previously negotiated rates set by the providers and
insurance carrier. (Id. at p. 1296.) Based on the applicable principle of law, as stated in
Hanif, that “a plaintiff’s recovery should be limited to ‘the actual amount he paid or for
which he incurred liability for past medical care and services,’ ” we reasoned that to
prevent the plaintiffs from recovering the amount for which they were liable would
amount to an undercompensation and would result in a windfall for the tortfeasor.
(Katiuzhinsky, at p. 1296.) Additionally, we noted that under the lien arrangement, the
medical providers were under no compulsion to sell their lien rights to the financial
services company; they merely had the option of doing so, and that the arrangement did

                                              8
not inflate the amounts billed by the medical providers or reflect any reduced value of the
services. (Id. at p. 1298.)

        Subsequently, Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th
541, 548 (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 its 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. (Id. at pp. 548-
549.)

        Howell began its analysis with the following statement regarding the
recoverability of economic damages: “A person who undergoes necessary medical
treatment for tortiously caused injuries suffers an economic loss by taking on liability for
the costs of treatment. Hence, any reasonable charges for treatment the injured person
has paid or, having incurred, still owes the medical provider are recoverable as economic
damages.” (Howell, supra, 52 Cal.4th at p. 551.) However, it continued, “a plaintiff may
recover as economic damages no more than the reasonable value of the medical services
received and is not entitled to recover the reasonable value if his or her actual loss was
less.” (Id. at p. 555.) Thus, according to Howell, “[t]o be recoverable, a medical expense
must be both incurred and reasonable” so that the plaintiff does not recover damages for
a loss she has not suffered and so that the damages she does receive are reasonable to
compensate her for the loss she has suffered. (Ibid.)

        In reaching this conclusion, Howell relied on the Restatement, which provides that
a person is usually entitled to recover the “reasonable value” of services rendered by a
third party but that where the injured person paid “ ‘less than the exchange rate’ ”—that
is, less than the “market value or the amount for which [a service] could usually be

                                              9
exchanged”—her recovery is limited to the amount she paid. (Howell, supra, 52 Cal.4th
at pp. 555-556, quoting Rest.2d Torts, § 911, com. h, pp. 476-477.) Howell’s medical
providers had preexisting agreements with her health insurance carrier to provide the
medical services at a contractually discounted rate as full payment for the services
rendered, therefore, Howell never incurred liability for the full charges. (Howell, at
p. 557.) For this reason, Howell took care to factually distinguish Katiuzhinsky, where
the plaintiffs were liable for the full amount of the medical providers’ charges. (Howell,
at p. 557.) It is also for this reason that Howell did not rely on the “reasonable value of
services” to limit the potential recovery for medical damages; rather, it limited recovery
to the amount paid on the plaintiff’s behalf, holding that “an injured plaintiff whose
medical expenses are paid through private insurance may recover as economic damages
no more than the amounts paid by the plaintiff or his or her insurer for the medical
services received or still owing at the time of trial,” leaving open the question of whether
the reasonable value of their services may be some greater amount. (Id. at p. 566.)

       Howell did, however, discuss the theoretical relationship between amounts billed
by medical providers and the reasonable value of their services in the context of
explaining that a tortfeasor does not obtain a windfall when the plaintiff is limited to
recovering the lesser of the reasonable value of services or the actual amount paid or
incurred. (Howell, supra, 52 Cal.4th at pp. 560-563.) Howell noted that providers may
establish their charges based on factors other than merely the costs of services, that there
may be significant disparities in the amounts charged to patients depending on whether
they are privately insured, uninsured, or receive public medical benefits, and that the
amounts charged are not necessarily representative of the amount that will ultimately be
paid. (Id. at p. 561.) In this discussion, Howell “d[id] not suggest hospital bills always
exceed the reasonable value of the services provided” (id. at p. 561), and instead would
state only that “the relationship between the value or cost of medical services and the

                                             10
amounts providers bill for them . . . is not always a close one . . . ” (id. at p. 562). It thus
concluded that as “it is not possible to say generally that providers’ full bills represent the
real value of their services, nor that the discounted payments they accept from private
insurers are mere arbitrary reductions,” tortfeasors do not obtain a windfall when the
plaintiff is limited to recovery of the discounted amount actually paid on his or her
behalf. (Id. at p. 562.)

       Nonetheless, as an extension of its holding regarding the cap on a plaintiff’s
recovery of medical damages, Howell also held that when a medical provider has
accepted, by prior agreement, less than the full bill as full payment for services rendered,
evidence of the amount paid is relevant to prove the plaintiff’s past medical damages and
evidence of the full billed amount is not relevant to prove the same. (Howell, supra,
52 Cal.4th at p. 567.) Howell further acknowledged that there is “an element of fortuity”
involved with respect to the medical expenses a tortfeasor may be liable to pay, i.e., “[a]
tortfeasor who injures a member of a managed care organization may pay less in
compensation for medical expenses than one who inflicts the same injury on an uninsured
person treated at a hospital.” (Id. at p. 566.)

       Following Howell, the case of Corenbaum v. Lampkin (2013) 215 Cal.App.4th
1308 (Corenbaum) addressed whether evidence of the full amount billed was admissible
for purposes of calculating future medical expenses and noneconomic damages where the
plaintiff’s medical providers accepted, pursuant to preexisting agreements, less than the
full amount billed as payment in full for their services. (Id. at pp. 1318-1319.) Based on
the reasoning set forth in Howell, Corenbaum held that “evidence of the full amount
billed for a plaintiff’s medical care is not relevant to the determination of a plaintiff’s
damages for past medical expenses, and therefore is inadmissible for that purpose if the
plaintiff’s medical providers, by prior agreement, had contracted to accept a lesser
amount as full payment for the services provided.” (Corenbaum, at p. 1328.)

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Corenbaum further held that the full amount billed is inadmissible to prove future
medical expenses because it is “not an accurate measure of the value of medical services”
(id. at p. 1330), neither can it be relied on by an expert in forming an opinion regarding
the reasonable value of future medical expenses, nor is it admissible for the purposes of
arguing noneconomic damages (id. at pp. 1331-1333).

       Thereafter, State Farm Mutual Automobile Ins. Co. v. Huff (2013)
216 Cal.App.4th 1463 (Huff), an interpleader action involving the Hospital Lien Act (Civ.
Code, §§ 3045.1-3045.6), decided that a medical provider seeking interpleaded funds
bears the burden of proving the amount it seeks is a “ ‘reasonable and necessary
charge[]’ ” for the services rendered (Huff, at p. 1470). The only evidence presented by
the hospital to establish it was entitled to the interpleaded funds was a copy of the
patient’s unpaid hospital bill. (Id. at p. 1467.) Though the trial court found that to be
prima facie evidence that the services were rendered and billed, thereby not requiring an
expert declaration of reasonableness and necessity (two elements that together limit the
lien amount a hospital may recover), Huff disagreed. (Id. at pp. 1468-1469.) Relying on
language from Corenbaum and Howell, Huff reasoned the bill alone is insufficient
evidence because “ ‘the full amount billed by medical providers is not an accurate
measure of the value of medical services’ [citation] because ‘many patients . . . pay
discounted rates,’ and standard rates ‘for a given service can vary tremendously,
sometimes by a factor of five or more, from hospital to hospital . . . .’ ” (Huff, at
p. 1471.) Rather, Huff concluded, the hospital must present additional evidence that the
services rendered were necessary—i.e., reasonably required by the patient’s injury—and
that “ ‘the charges for such services were reasonable.’ ” (Ibid.)

       Ochoa v. Dorado (2014) 228 Cal.App.4th 120 (Ochoa), relying on the reasoning
of Howell and Corenbaum and the conclusion in Huff, then held that even where there is
no prenegotiated discounted rate “the full amount billed, but unpaid, for past medical

                                              12
services is not relevant to the reasonable value of services provided.” (Ochoa, at p. 135,
italics added.) Ochoa acknowledged that Howell “did not expressly hold that unpaid
medical bills are not evidence of the reasonable value of the services provided,” but it
interpreted the reasoning of Howell as “strongly suggest[ing] such a conclusion,” and
noted that Corenbaum had indeed reached that conclusion in reliance on Howell.
(Ochoa, at p. 135.) Ochoa also read Huff as standing for the proposition that an unpaid
hospital bill is “not evidence of the reasonable value of the services provided.” (Ochoa,
at p. 136.) Ochoa expressly declined to follow Katiuzhinsky, as well as other existing
precedent, finding it unpersuasive with respect to whether medical charges billed reflect
on the reasonable value of services provided. (Ochoa, at p. 138.) Rather, it concluded
that “evidence of unpaid medical bills cannot support an award of damages for past
medical expenses.” (Id. at p. 139.)

       Bermudez v. Ciolek (2015) 237 Cal.App.4th 1311 (Bermudez) too addressed the
related questions of what evidence is admissible and sufficient to prove an award of
medical damages. It noted that Howell had clarified the law with respect to the recovery
of medical damages where the injured person was insured, but that “[t]he ramifications of
Howell . . . in a case brought by an uninsured plaintiff (who has not paid his bill) are less
clear,” especially because Howell did not rely on the measure of the reasonable value of
medical services but the amount paid or incurred. (Bermudez, at p. 1329.) According to
Bermudez, “Howell certainly did not suggest uninsured plaintiffs are limited in their
measure of recovery to the typical amount incurred by an insured plaintiff, or, for that
matter, the typical amount incurred by any other category of plaintiff.” (Ibid.) Nor did
Howell offer any “bright-line rule on how to determine ‘reasonable value’ when
uninsured plaintiffs have incurred (but not paid) medical bills”; it merely endorsed the
use of a “market or exchange value,” which Bermudez deemed consistent with
Katiuzhinsky. (Bermudez, at p. 1330.) Thus, Bermudez concluded, “the measure of

                                             13
damages for uninsured plaintiffs who have not paid their medical bills will usually turn
on a wide-ranging inquiry into the reasonable value of medical services provided,
because uninsured plaintiffs will typically incur standard, nondiscounted charges that will
be challenged as unreasonable by defendants.” (Id. at pp. 1330-1331.)

       With respect to the admissibility of evidence of medical damages, Bermudez noted
pre-Howell cases did not require exclusion of billed amounts so long as there was
independent evidence the medical procedures were necessary as a result of the tort at
issue, with the implication that the billed amount was always relevant to the amount
incurred by the plaintiff or the “ ‘reasonable’ ” value of the services provided.
(Bermudez, supra, 237 Cal.App.4th at p. 1332.) Following Howell, Corenbaum ruled
that “evidence of the full amount billed for past medical services was not relevant (and
was therefore inadmissible) to prove past medical expenses, future medical expenses,
and/or noneconomic damages.” (Bermudez, at p. 1334.) However, neither Howell nor
Corenbaum involved uninsured plaintiffs, nor did they rule that evidence of billed
amounts is inadmissible in such cases. (Bermudez, at p. 1335.) Where the plaintiff is
uninsured, the billed amount is not only relevant to determining the amount incurred by
the plaintiff but also to the reasonable value of medical services rendered. (Ibid.)

       Bermudez also noted that Huff did not suggest the billed amount is irrelevant, but
merely that it was not sufficient in and of itself to prove the amounts charged are
reasonable or that the treatment rendered was necessary. (Bermudez, supra,
237 Cal.App.4th at p. 1336.) It further discussed Ochoa, stating “[i]t is difficult to
precisely identify the holding in Ochoa, because its analysis and terminology conflated
two related questions . . . [—]the admissibility of evidence and the sufficiency of evidence
to support a judgment[]. Uncontroversially, Ochoa holds that evidence of unpaid medical
bills, without more, is not substantial evidence of the reasonable value of services
provided. Less clear is whether Ochoa intended to say something about the admissibility

                                             14
of evidence pertaining to the amount of unpaid medical bills . . . .” (Bermudez, at
p. 1337, fn. omitted.) To the extent that it did, Bermudez criticizes that conclusion as
well as the blanket ruling of Corenbaum that billed amounts are not relevant to
determining whether the amount paid was reasonable, for, as Bermudez points out, in the
absence of a stipulation about reasonableness, “evidence of the initial billed amount
would be relevant to proving the reasonableness of the discounted amount that was
actually paid.” (Bermudez, at p. 1335, fn. 6; see id. at p. 1337.)

       Finally, this court again addressed the issue of medical damages in Uspenskaya v.
Meline (2015) 241 Cal.App.4th 996 (Uspenskaya). There, as here, the plaintiff received
medical treatment in exchange for a lien benefiting the providers, who later sold those
liens to a third party for an amount less than that billed to the plaintiff for the services.
(Id. at p. 999.) The trial court prevented defendant from introducing the amount the third
party paid as evidence of the reasonable value of the medical services provided. (Ibid.)
Uspenskaya noted that the payments by the third party may be relevant—“they have a
tendency in reason to prove reasonable value” (id. at p. 1002)—but they were properly
excluded as unduly prejudicial and potentially confusing because the amount paid
“represents a reasonable approximation of the collectability of the debt rather than a
reasonable approximation of the value of the plaintiff’s medical services” (id. at p. 1003)
and the defendant did not proffer any other evidence that the amount paid reflected a
reasonable valuation of the medical services (id. at pp. 1003-1004).

       As Bermudez had done before it, Uspenskaya distinguished Howell and
Corenbaum on the basis that they did not involve uninsured plaintiffs who had incurred
the full amount billed. (Uspenskaya, supra, 241 Cal.App.4th at p. 1006.) Uspenskaya
also adopted Bermudez’s observation about the “ ‘wide-ranging inquiry’ ” that will likely
be presented to assess the reasonable value of medical services where the plaintiff is
uninsured. (Uspenskaya, at p. 1007.) It further held that inquiry “is not necessarily

                                               15
limited to the billed amounts,” but if the defendant seeks to introduce evidence of a lesser
payment the defendant will also have to present “some additional evidence showing a
nexus between the amount paid . . . and the reasonable value of the medical services.”
(Ibid.)

          In sum, a plaintiff, whether insured or uninsured, bears the burden of proving her
medical damages, which are limited to the lesser of (1) the amount incurred or paid for
medical services, and (2) the reasonable value of the services rendered. (Howell, supra,
52 Cal.4th at pp. 555-556; Huff, supra, 216 Cal.App.4th at p. 1470.) The reasonable
value of a service is its market or exchange value, that is the “customary rate,” or the rate
that the provider or similar providers “ha[ve] received . . . and other factors, including the
reputation of the person giving the services, the skill with which the work is done and the
difficulty and danger of the work, are taken into consideration.” (Rest.2d Torts, § 911,
com. h, p. 476; see Howell, supra, at pp. 555-556.) Where the plaintiff is insured
(whether through private insurance or government benefits), evidence of the amount
accepted as payment in full by the medical providers is relevant to prove the reasonable
value of services, but evidence of the amount billed is not relevant to prove the
reasonable value of services already provided. (Howell, supra, at p. 567; Corenbaum,
supra, 215 Cal.App.4th at p. 1328.) Neither may it be relied on by experts in their
projections of future medical costs or as a basis for assessing noneconomic damages
where the plaintiff is insured. (Corenbaum, at pp. 1330-1333.)

          Where a plaintiff is not insured, medical bills are relevant (admissible) to prove
both the amount incurred and the reasonable value of medical services provided, but they
are not sufficient on their own to prove the reasonable value. (See Bermudez, supra,
237 Cal.App.4th at p. 1335, 1337; Katiuzhinsky, supra, 152 Cal.App.4th at pp. 1295-
1296; see also Huff, supra, 216 Cal.App.4th at p. 1471.) Rather, the uninsured plaintiff
must present additional evidence, likely in the form of expert opinion testimony, to

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establish that the amount billed is a reasonable value for the service rendered. (See
Bermudez, supra, at pp. 1336, 1338.) Additionally, amounts paid by third parties to
purchase liens from providers may be relevant to determining the reasonable value of
services provided to the uninsured, but it is not error to exclude that evidence without
additional evidence establishing a nexus between the amount paid for the lien rights and
the reasonable value of the service. (Uspenskaya, supra, 241 Cal.App.4th at p. 1007.)

         We agree with the reasoning of Bermudez and Uspenskaya with respect to the
admissibility and relevance of medical bills to determine medical damages for uninsured
plaintiffs for multiple reasons. First, because a plaintiff must show the amount incurred
to establish her claim for damages, she must be permitted to present evidence of that
amount. Second, because the plaintiff was apparently willing to pay that amount, it has
some relevancy to establishing the reasonable value of the service, i.e., its market value.
If a plaintiff can find an expert to competently testify that the amount incurred is the
reasonable value of the service rendered, she should be permitted to do so. The
defendant could certainly cross-examine the basis of that expert’s opinion and present her
own expert opinion testimony that the reasonable value of the service is much lower, i.e.,
the amount regularly paid for such a service. A jury could, based on this “wide-ranging
inquiry” and in possession of ample conflicting evidence, best decide what the reasonable
value of the medical treatment was, which is likely to be the cap on medical damages
where the plaintiff is not insured. (Bermudez, supra, 237 Cal.App.4th at pp. 1330-1331,
1338.)

         2.3 Admission of Evidence of Amounts Billed

         Cowan contends it was error for the trial court to admit into evidence amounts
charged as evidence of the reasonable value of medical services provided. In this case,
we agree.

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       Though an uninsured plaintiff must be permitted to present evidence that the
amount billed reflects the reasonable value of services provided, plaintiff’s expert did not
provide any such opinion in this case. Rather, Lievense merely opined that the charges
billed by providers for medical services rendered to Frisk “fell within the range of usual,
customary, and reasonable” charges, meaning that they fell within the range of what
similar medical providers would charge. He did not provide the additional requisite
opinion testimony tying that amount charged to the reasonable value of the service
rendered, i.e., its market value. (See Howell, supra, 52 Cal.4th at pp. 555-556.) In fact,
he opined that what medical providers could expect to be paid was irrelevant to the
inquiry.

       Lievense stated that in setting prices to charge for services “[t]he basis for the
valuation, the medical services, is the cost of providing those services, what it cost to
provide nurses and medication and heat, lighting, and the parking lot rebuild. Those are
the actual costs and those are recovered by charges. [¶] Whether the account—what’s
paid, if anything, does not indicate what it cost to provide those services. [¶] Keep in
mind healthcare is different. In a surprising number of cases absolutely nothing is paid.
So the fact that there’s a zero payment doesn’t mean that the value of the services is zero.
The nurses were still paid. [¶] The fact that there was a payment of any sort by a lien
company or any other system doesn’t mean that that’s what was accepted or that’s where
the value of the services sits. The value is still measured by the charges at the usual,
customary, and reasonable level.”

       Regardless of whether Lievense has a valid point with respect to how the medical
marketplace operates, we are bound by existing precedent which indicates that the basis
for determining the reasonable value of medical services is its market value—that is, the
amount sought and paid for the service. (Howell, supra, 52 Cal.4th at pp. 555-556.)
Moreover, it is clear that without additional evidence providing the nexus between the

                                             18
amount charged and the reasonable value of the service provided, evidence of the amount
billed is insufficient to support an award of medical damages. (Bermudez, supra,
237 Cal.App.4th at pp. 1335-1338.) And, because he did not tie his opinion regarding the
reasonableness of the amount charged to the reasonable value of the services, the
admission of Lievense’s testimony in that regard was error.1

       2.4    Exclusion of Evidence of Amounts Paid

       Cowan claims it was error for the trial court to exclude evidence of amounts
typically paid to medical providers for the same services provided to Frisk. We agree.

       As we stated above, where a plaintiff seeking medical damages is uninsured,
evidence of amounts paid in the medical marketplace would be relevant to determining
the reasonable value of services provided to the uninsured, i.e., the exchange value of
such services. Indeed, as recognized in Howell, it is entirely possible the reasonable
value of medical services is more closely reflected in the negotiated rates paid by private
insurers or even through government benefits programs than in amounts charged for
services. (Howell, supra, 52 Cal.4th at p. 562.) Thus, a defendant tortfeasor must be
permitted to present evidence that the amount billed is not the reasonable value of
services, and that some lesser amount actually paid would reflect the exchange or market
value of those services. Accordingly, it was error for the trial court to exclude evidence
of the amounts paid on behalf of insured persons.

1 We contrast Lievense’s testimony, for example, with that presented in Bermudez, in
which the plaintiff presented the testimony of two medical experts who opined as to the
reasonable value of the services provided, and did not merely “rubber stamp” the
amounts charged but challenged some of the amounts billed. (Bermudez, supra,
237 Cal.App.4th at p. 1339.) Bermudez found that evidence to be sufficient to support an
award of medical damages because it was not speculative but was based on injuries
suffered; medical treatment rendered; and the real world experience of the experts, who
considered the medical costs incurred and their own experiences in treating patients.
(Id. at pp. 1339-1340.)

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3.0    Remedy

       Finally, Cowan contends she is entitled to a retrial as to all issues, and if retrial is
limited to damages it should be as to all compensatory damages. Her contention is
premised on her assumption that without Sells’s testimony regarding payments, “the jury
had to be wondering why Cowan was contesting at all. The jury most likely took a
disliking to Cowan for making them sit through the trial in which her own expert
[(Sells)], called by Frisk so early in the proceedings, had nothing to say. In a case where
Cowan needed the jury to consider whether her lifelong medical condition should excuse
liability, she never had a chance to focus them on that issue because the entire trial was
presented as an agreement by all physicians and experts, rather than a dispute.” Thus,
she claims that because she was not permitted to present evidence disputing the amount
of medical damages, the jury was swayed by Frisk’s counsel’s representation of Cowan’s
defense as “frivolous.” We disagree.

       Though Frisk’s counsel did argue in his closing that Cowan’s dispute about the
medical damages was baseless, he also described the dispute about liability as the reason
for the trial. He accurately argued that much of the evidence as to that issue was
undisputed: Cowan knew her blood sugar was low when she decided to drive her car and
she crossed into Frisk’s lane of traffic, causing the collision. Nor, he argued, was there a
dispute that the collision was a “substantial factor” in causing Frisk’s injuries; that the
treatments she had received and would receive were necessitated by those injuries; that
the injuries had affected Frisk’s lifestyle; and that the amounts charged were reasonable.

       As stated above, we agree it was error for the trial court to exclude evidence of the
dispute as to the reasonable value of the medical services rendered and anticipated to be
rendered. Thus, as to the issue of medical damages, we agree a new trial is needed.
Nevertheless, we do not find the error was prejudicial with respect to the jury’s findings
on liability or causation.

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       Cowan had an opportunity to dispute her liability. And, in closing argument,
Cowan’s counsel did dispute liability by arguing that a reasonable person in her situation
would have tried to get food, which was what Cowan was attempting to do when the
collision occurred. Counsel primarily focused though on punitive damages, arguing
Cowan’s decision to drive a short distance to get food was not “despicable or vile or
contemptible” and that her having had one prior automobile accident “related to a
hypoglycemic event” did not make it so, especially since her testimony revealed that
though she felt “off” before getting in the car, she “did not feel like she was having a
hypoglycemic event.” In light of the undisputed evidence regarding Cowan’s blood
sugar, the collision, her prior diabetes-induced accident, and her lax control or treatment
of her diabetes, we cannot conclude that the jury’s rejection of her claim that she should
be excused based on her diabetes was a result of prejudice caused by the trial court’s
erroneous evidentiary rulings.

       Moreover, we conclude the error was not prejudicial as to damages other than past
and future medical specials. The jury was instructed that in deciding compensatory
damages, there were two categories of damages claimed: economic and noneconomic. It
was further instructed to state the two categories of damages separately on the verdict
form,2 and that in determining the amount of noneconomic damages to award, the jury
was to consider Frisk’s “past and future physical pain, mental suffering, loss of
enjoyment of life, and inconvenience, as well as physical impairment,” and “emotional
distress.” The jury was also instructed there was “no fixed standard” for calculating
noneconomic damages, but that the jurors “must use [their] judgment to decide a
reasonable amount based on the evidence and [their] common sense.” Finally, the trial

2 The special verdict form used by the jury made clear that noneconomic damages were
to compensate Frisk for past and future “physical pain, mental suffering, physical
impairment, and emotional distress.”

                                             21
court instructed that with respect to future damages, the jury would have to calculate
Frisk’s probable life expectancy, and informed the jury that an average 30-year-old
woman would be expected to live another 52 years with some living longer and some
dying sooner.

       In closing argument, Frisk sought $500,000 in past noneconomic damages and
$1.5 million in future noneconomic damages. Frisk’s counsel argued for that award of
damages based on a per diem calculation method, with past damages being based on a
yearly rate of $100,000 (making it a daily rate of $273.97 or an hourly rate of $11.42) and
with future damages being based on a yearly rate of $30,000 with her living another 50
years (making it an hourly rate of $3.42).3 Counsel closed his noneconomic damages
argument with, “these numbers, $2 million, if you think—if you think it’s low,
collectively, you can award more. But $11 an hour for what’s happened from today
going back to the accident, and $3.40 an hour going forward, that’s where justice starts.
That is fair. That is reasonable. That is justice.”

       Counsel for Cowan did not address noneconomic damages in his closing
argument. After less than three hours of deliberation, the jury awarded Frisk $500,000
for past noneconomic damages and $2 million for future noneconomic damages.
Additionally, based on its finding of malice, the jury awarded Frisk the stipulated

3 Counsel exposited the per diem calculation method by querying whether, as to past
noneconomic damages, “That hour this summer when Ms. Frisk woke up in tears because
she thought she was going to do her mom a favor and get the girls’ stuff together and
clean the house by herself, was that hour worth $11? [¶] That hour, from the instant the
collision occurred until 60 minutes later, was that worth 11 bucks? Some of those hours
are worth a lot more than that.” And, as to future noneconomic damages, he pondered,
“Is that hour down the road while she’s laying [sic] on the operating table worth $3.42?
When she’s 65, 75, is waking up in the night in pain and needing to take those high
dosages of medication worth [$]3.42 for that hour? It is. It’s worth at least that. It’s
worth at least that.”

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punitive damages amount of $1. Nothing in the record suggests the jury awarded
noneconomic damages as a multiplier of economic damages awarded, or that the award
of economic damages in any way influenced the jury’s decisionmaking as to
noneconomic damages. Therefore, there is not any indication the jury’s award of
compensatory damages other than for medical expenses was prejudicially impacted by
the trial court’s erroneous evidentiary rulings. Accordingly, we limit the retrial on
remand to the issue of damages for past and future medical expenses only.

                                      DISPOSITION

       We vacate the award of damages to plaintiff for past and future medical expenses
and remand the matter to the trial court for a retrial limited to determining the amount of
damages to be awarded plaintiff for past and future medical expenses. In all other
respects the judgment is affirmed. Cowan is entitled to her costs on appeal. (Cal. Rules
of Court, rule 8.278(a)(1), (3).)

                                                           BUTZ               , J.

We concur:

      HULL                   , Acting P. J.

      DUARTE                 , J.

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