HANIFF OR HOWELL DEDUCTIONS FOR MEDICAL EXPENSES

The basis for recover in tort is codified in California Civil Code § 3333.  California Civil Code § 3333 states that “for the breach of an obligation not arising from contract, the measure of damages,….is the amount which will compensate for all the detriment proximately caused thereby, whether it could have been anticipated or not.  

In North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 786, the Court held tort damages compensate a plaintiff for all of his/her damages suffered as a legal result of the defendant’s wrongful conduct.  But, those damages had to be “proximately caused” by the wrongful conduct.  Chaparkas v. Webb (1960) 178 Cal.App.2d 257, 260.  But, in Helfend v. So.Cal. Rapid Transit (1970) 2 Cal.3d 1, the California Supreme Court said that a defendant could not receive a credit for any outside source reimbursing the injured plaintiff. This was known as the “collateral source rule.”

In Haniff v. Housing Authority of Yolo County (3d Dist. 1988) 200 Cal.App.3d 635, a court of appeals held that the reasonable value of medical services rendered to an injured plaintiff was not the amounts billed but the amount Medi-Cal (California version of Medi-care) reimbursed the plaintiff’s care providers.  The Haniff court focused on Civil Code § 3333 and the fact that the bills were not going to be paid in full, ever.  

In Nishihama v. City and County of San Francisco (1st Dist. 2001) 93 Cal.App.4th 298, another court of appeals extended the Haniff reasoning to amounts actually paid by private medical insurers.  

In McMeans v. Scripps Health (4th Dist. 2002) 100 Cal.App.4th 507, a health insurer sought to recover amounts paid to its injured policy holders.  The issue was whether the health insurer could recover what it billed out on behalf of its insured or what it recovered from the tortfeasors.  The court held that what was paid is what the insurer can recover.  

In Greer v. Buzgheia (3d Dist. 2006) 141 Cal.App.4th 1150, a court of appeals permitted a plaintiff to introduce the actual billed amounts as medical specials and in a post-trial proceeding, the defense could cut the medical bills to the actual paid amounts.  

In Howell v. Hamilton Meats (2011) 52 Cal.4th 541, the California Supreme Court resolved any disputes and held that the undiscounted figure is not relevant on the issue of past medical expenses and that the amount paid by insurance is admissible to prove the measure of damages for past medical expenses. However, because the defendant had conceded that the plaintiff was entitled to present the undiscounted medical bill number to the jury, the Court did not reach the issue of whether the larger, undiscounted figure might be relevant “on other issues, such as noneconomic damages or future medical expenses.” It is difficult to see how both past medical bill numbers could be presented to the jury without leading to confusion or, worse from a plaintiff’s standpoint, inadvertently disclosing to the jury the fact that the plaintiff’s medical bills have been paid by insurance.

Based upon these decisions, the amount paid is the measure of damages.  Any evidence of amounts billed should be argued as irrelevant.