A Jury Only Sees the Amount Paid for Medical Bills in an Injury Trial
A recent case has confirmed the reduction in recoveries for injured plaintiffs, in Luttrell vs. Island Pacific Supermarkets. We have reported previously that a plaintiff is only entitled to recover for his or her incurred medical bills, the amount that was paid, as opposed to the amount that was billed. As you likely know, when a bill is submitted to your health insurance, or paid by Medi-Cal or Medicare, that bill is paid off in full at a greatly reduced rate. Your health insurance has negotiated with the medical provider for lower payments (in exchange for the provider getting patients), and Medi-Cal and Medicare basically dictate what they will pay.
In the past many courts have allowed into evidence, for the jury to see, the total amount that was billed. Then after the trial is over, the “discounted” amount is deducted from the billed amount that is awarded, so that the plaintiff recovers only what was paid, not what was billed. As a result, the defendant benefits from the Plaintiff’s purchase of health insurance. Prior to 2011, for decades, plaintiffs recovered what was billed.
In this reported case, the court held that the plaintiff can only put into evidence, and therefore the jury only sees, the amount that was paid.
Unfortunately this can result in different results, for the same injury, even with the same treatment. In addition, plaintiffs will recover substantially and dramatically less, then they used to. For example, if the plaintiff is treated on a “lien basis” (whereby the medical provider is not paid until the case is over), there is no discounting of the bill (as when the health insurance discounts the bill), and therefore the entire amount of the bill goes into evidence, for the jury to see. Since many times, if not most of the time, a jury (and certainly an insurance company) will evaluate the injury/case based on the amount of the bills, the plaintiff who has more bills will recover more overall than the plaintiff who has fewer bills, even when the injury and treatment are the same.
This issue of lien treatment and insurance is creating another conflict. We have in California a “mitigation of damages” requirement, which says that a plaintiff must “mitigate” his damages/injuries, by making sure that they are not increased. We also have what is called “The Collateral Source Rule”, which says that evidence of insurance is not admissible at trial. However, we are starting to see defendants and insurance companies argue that treating with a lien (and not going thru your health insurance) results in higher bills, and therefore the Plaintiff has not “mitigated” his or her damages. The defendants and insurance companies are arguing that a plaintiff should not be able to treat on a lien basis (thereby increasing the bills), and if they do, evidence of health insurance should now go into evidence to show that the plaintiff did not “mitigate” his injuries. This would seem to be contrary to the rule that excludes evidence of insurance. How this will eventually be reconciled, remains to be seen.
But it is clear that there is a very significant trend to reduce recoveries for those that have been injured.