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MICRA: Judge rules damage awards must be based on amount actually paid for medical care



May 17, 2013

In a recent decision, the Second District appellate court ruled that when determining future economic damage awards in personal injury cases (which includes medical professional negligence), juries can only consider reasonable amounts actually paid or incurred for past medical care, not undiscounted provider bills that were never paid by or on behalf of the injured person. The court also ruled that evidence of the full amount billed is inadmissible for the purpose of calculating noneconomic (pain and suffering) damages. The appellate court reversed a lower court's ruling and ordered a new trial to determine compensation based on the actual medical costs paid to providers.


In March, the California Medical Association (CMA), together with the California Hospital Association and the California Dental Association were asked by the court to file an amicus letter in this case (Corenbaum v. Lampkin) regarding evidence that is admissible in court for determining future medical damages and noneconomic damages in an injury case.


The court had solicited input on the following issue: "To what extent, if at all, evidence of the amount billed for medical expenses is admissible and relevant to the issues of future medical expenses and/or noneconomic damages." These specific issues were left unresolved by the California Supreme Court’s 2011 decision in Howell v. Hamilton Meats, where the court held that an injured person can only recover reasonable amounts actually paid or incurred for past medical care, not undiscounted provider bills that were never paid by or on behalf of the injured person.


The trial attorneys in this case argued that the jury for the purposes of determining damages for future medical expenses should hear evidence about the reasonable value of and/or the amounts billed for past medical services, not the amounts actually paid.


CMA told the court in this case, Corenbaum v. Lampkin, that in determining the reasonable cost of future medical expenses, the jury may consider how much medical expenses plaintiffs actually incurred in the past for medical care. However, evidence of the amount that plaintiffs were billed in the past for medical care is not relevant to determining what medical expenses plaintiffs will incur in the future.


Consistent with CMA’s position, the Corenbaum v. Lampkin court ruled that evidence introduced at trial reflecting the amount that was billed rather than the amount actually paid, was not relevant to damages awarded for past medical expenses, future medical expenses or noneconomic damages and was admitted in error. “The error was prejudicial because the full amounts billed rather than the lesser amounts accepted by medical providers as full payment were used” to award damages to the plaintiff.

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