People who sustain a traumatic brain injury, spinal cord injury or other serious injury due to the negligence of a third party should receive appropriate medical care. Victims who do not have health insurance generally receive medical care on a lien basis, and their liens are resolved upon settlement or a judgment in the case. In order to determine damages based on medical expenses in these cases, the judge or jury must determine whether the treatments were necessary and whether the costs were reasonable. The full medical bill is presented to the fact finder (usually a jury) at trial.
This procedure is very different from that of medical expenses filed with a health insurance company. A victim whose medical bills are paid by an insurance company is only responsible for a co-payment or deductible. And insurance companies almost never pay medical bills in full. Usually a large portion of the medical bill is discounted due to rate reductions negotiated by the insurance company.
Under the law, victims in personal injury lawsuits in California who have health insurance receive less compensation than victims who do not have insurance. How do the courts assess compensation for a personal injury victim who pays medical bills with private health insurance? The cases related to this issue have focused on public policy not to penalize victims who have health insurance. Less emphasis has been placed on cases where medical bills are written off or heavily discounted due to contracts between insurers and healthcare providers. The issue is important for victims of traumatic brain injury, spinal cord injury and other serious injuries where treatment is usually long and very expensive.
The California Supreme Court has ruled that medical bills paid by health insurance must be included in the evidence presented to the jury. The Court has determined that a victim must benefit from taking out health insurance. A victim in a personal injury case can provide proof of all medical bills that have been charged, regardless of how the bills were paid. Those bills provide the jury with evidence of the amount of damages the victim should receive to reimburse him for his bills. The bills also help the jury assess the victim's injuries. Presentation of total bills helps a jury or judge determine how much to award a victim for his or her pain and suffering.
But after a lawsuit presenting the full medical bill, the defense may request a hearing to reduce the amount of damages awarded to compensate the victim for medical bills to reflect the debits or discounts due to health insurance contracts with medical providers .
The solution the courts have come up with is to eliminate the medical bills that have been written off. This violates the original rationale of allowing the medical bills of insured victims to be submitted at trial. The rule is designed to prevent the negligent party from profiting from the victim's decision to purchase insurance. The idea was to encourage victims to take out insurance. Reducing the victim's recovery through write-offs or insurance adjustments benefits the defaulting party. If the victim had no insurance, the negligent party would be responsible for the full cost of treatment. It seems logical that since the victim paid the insurance premiums, he or she should benefit from any write-offs or contract discounts.
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