Future Medical Costs from a Personal Injury

doctor shows personal injury patient medical costs

In California, a person who has been injured is entitled to future medical damages in addition to past medical charges. The measure by which the damages are measured is stated in Howell v. Hamilton Meats & Provisions, Inc. “To be recoverable, a medical expense must be both incurred and reasonable. (2011) 52 Cal.4th 541, 555.

The decisions of Howell and Hanif v. Housing Authority, (1988) 200 Cal.App.3d 635, have made it so that past medical damages are limited only to the amount that was actually paid, disregarding the actual value of the medical services.  While these decisions have limited the amount recoverable for past medical services, they have NOT affected the amount of future medical damages.

Recently, the case of Correnbaum v. Lumpkin was decided and addressed what an expert may rely on to determine future damages. (2013) 215 Cal.App.4th 1308.  The Court held that an expert may not rely on, as a basis of their opinion, past billed amounts for medical services in order to determine the reasonable value of future medical services. Id.

Defense attorneys try to drive down the value of future medical damages by having their experts rely on INCORRECT sources. The defense attorney may try to reduce past medical charges if they have been paid or calculated by (a) medi-cal/medicare, (b) the Affordable Care Act, (c) private health insurance rates, (d) the actual past rate, or (e) an unreliable and speculative outside estimate.

Here are the ways you can defend against the defense attorney’s argument and keep the value of future damages high.

Medi-cal/Medicare

Defense arguments that the future medical damages should be calculated based on the past value of the same services paid by medi-cal or medicare are INCORRECT. An expert relying on medi-cal or medicare rates is incorrect because the rates rely on a collateral source.  As with any discovery, information may not be admissible in court if it comes from a collateral source. Hrnjak v. Graymar (1971) 4 Cal.3d 725.

Medi-cal and medicare rates are determined partially by the political process. Budgets are set forth in part by the Department of Health and Human Services, the Medicare Secondary Payor Program, the Medi-cal Disproportionate Share Hospital program, and local state and county budget committees.

These programs set forth rates which do not reflect the actual value of the medical services, nor are the rates stated locked in. They do not accurately reflect what the value of the services would be in the future.  Hospitals are often reimbursed by medi-cal and medicare at an amount less than the actual cost of providing the medical services.

If the defense attorney attempts to establish future medical damages based on current medi-cal or medicare rates, use the Collateral Source Rule, see Hrnjak, to preserve the reasonable value of future medical expenses.

Affordable Care Act

Under the Patient Protection and Affordable Care Act, participating insurers have the ability to drop a person from coverage if they are ever enrolled in the future in medi-cal or medicare, or if they determine after one year’s evaluation that providing care to an individual is unprofitable for the insurer.

Future medical damages calculated using the Affordable Care Act rates are speculative as the insured may be dropped within any one year based on profitability or enrollment of other programs.

Further, the program is new and has not been fully implemented and the effects on future medical damages are not known. A defense attorney who uses rates from the Affordable Care Act is INCORRECT because the rates are too speculative and may vary widely in the future.

Private Health Insurance

Defense attorneys who attempt to establish future medical damages based on past amounts paid by private health insurance are INCORRECT. Similar to medi-cal and medicare, doing so would violate the Collateral Source Rule. In Correnbaum the court stated “[F]or an expert to base an opinion as to the reasonable value of future medical services, in whole or in part, on the full amount billed for past medical services provided to a plaintiff would lead to the introduction of evidence concerning the circumstances by which a lower price was negotiated with that plaintiff’s health insurer, thus violating the evidentiary aspect of the collateral source rule.” 1332.

If a defense attorney attempts to use private health insurance rates, cite to the Correnbaum decision to reflect that such an argument violates the Collateral Source Rule.

Actual Past Rate

On the invoice of a medical bill is listed how much the hospital or health care facility was actually paid. The actual past rate does not reflect the full and reasonable rate of the services provided.

Health care facilities enter into contractual relationships with insurance companies. In addition to the amount reflected on the patient invoice, the hospital also receives from the insurance companies: rapid payments, higher volumes of clients, kick-backs, and year-end bonuses based on the contractual incentives.  These additional monetary incentives drive down the price reflected on the patient invoice and do not reflect the full and reasonable value of the services provided.

Defenses attorneys who use the actual past rates of services based on patient invoices are INCORRECT because the invoice rates do not take into account other non-listed benefits which drive down the listed amount.

Outside or Speculative Rate

Defense attorneys may attempt to establish future medical damages from the testimony of an outside expert or singular medical provider. Examples of this might be a doctor who testifies they would perform the service for a fraction of what the Plaintiff is claiming.

If the Defense attorney attempts this, attack the defense experts rates by showing average rates for the medical service in the region where the Plaintiff is located or illustrating factors which the defense estimate does not take into account. A defense attorney who attempts to use an “outlier” to establish low future medical damages can be crushed by using reasonable rates of other medical providers.

Protecting Yourself From Future Medical Costs

Defense attorneys are trying everything they can do to limit the amount you receive in a settlement. Be ready to shoot down their arguments if they attempt to toss up rates from (a), (b), (c), (d), or (e).  The surest way to establish foundational requirements for an expert’s testimony is by having them testify as to the reasonable, customary and usual rate of future medical damages.  This can be done by using an average of rates for services provided as determined by medical facilities in that particular region or city.  Doing so will help you establish realistic future damages which you are legally entitled to. If you’re the victim of personal injury it’s important to protect yourself from future medical costs by contacting a attorney.

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