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California Appeals Court Says Uninsured Passenger Can Use Full Amount of Medical Bills to Prove ‘Reasonable Value’ of Care

Sometimes, legal concepts and rules are, in theory, based upon straightforward notions. For example, the law says that an injured person should be allowed to recover the “reasonable value” of the medical services she received as a result of her accident. This sounds like a direct and common-sense method, right? Unfortunately, these theoretically straightforward concepts can become highly complex in reality, especially given the ultra-complicated and byzantine system of medical billing and payment in this country. The Third District Court of Appeal tried to bring some clarity to this murky issue in a recent ruling, declaring that an injured plaintiff can use the full amount of a medical provider’s charges to establish “the reasonable value of the services” received.


The underlying facts of the case are, unfortunately, not unusual. The plaintiff, before she was “the plaintiff” in this case, was very full of life and energetic. At work, she was a “queen bee” who was “always in five places at once it seemed.” Off the clock, she was an active mom and a social butterfly. Then, one day in September 2008, she was injured in an auto accident. The driver of the other car admitted he was negligent. After the accident, things weren’t the same. She wasn’t able to work as much. She was less able to interact with her child physically. Finally, she gave in and underwent disc replacement back surgery. Like many otherwise healthy people in their late 20s, this working mother was uninsured.

At trial, the woman presented evidence of the medical bills she’d racked up. In this woman’s case, a third party paid her bills, doing so at a negotiated (and reduced) rate. The third party that paid this woman’s bills was MedFin Manager California LLC, a medical finance company. In this type of arrangement, a patient’s doctors obtain liens against any personal injury litigation award or settlement and then sell those liens to third-party finance companies like MedFin. Usually, the medical providers sell their liens to these companies at a discount.

During the trial, the court allowed the woman to use this full billing amount in attempting to prove the “reasonable value” of the medical care she received, and the court also refused to allow any evidence about MedFin, concluding that the amount MedFin paid wasn’t relevant to the true value of the services this woman received. After the trial, a jury assessed the plaintiff’s damages at $522,000. More than $120,000 of that was past medical expenses, and $45,000 was future medical expenses, with non-economic damages making up the remainder of the award.

The defense appealed this outcome, but the verdict and judgment remained in place. The defense tried unsuccessfully to convince the appeals court that, at trial, the injured woman should not have been able to use the pre-discounted figures in establishing the value of the services she received. The defense also contested the trial court’s refusal to allow evidence about MedFin.

In making this important ruling, the court clarified the application of two prior decisions, the Supreme Court’s 2011 decision in Howell v. Hamilton Meats & Provisions, Inc. and a 2007 appellate case, Katiuzhinsky v. Perry. Contrary to what the defense argued, the Supreme Court’s Howell ruling did not create a clear rule that the reasonable value of services (and therefore the maximum amount of a plaintiff’s past medical recovery) is capped at whatever amount a third-party finance company paid for those bills. Instead, the court re-affirmed the soundness of the Katiuzhinsky opinion, which stated that “the full amount of a provider’s bill can be relevant to prove the reasonable value of the services.”

The appeals court’s decision in this recent case is an important and beneficial one for people injured in accidents. Just because a provider agrees to sell a bill to a third-party company for X dollars, and the company agrees to buy the bill for that amount, doesn’t necessarily mean that X dollars is the true worth of those medical services. These arrangements are influenced by many other considerations and forces outside the intrinsic value of the medical care the injured person received. There are many business reasons why a provider and a finance company might agree to a sale amount substantially below the true worth of the services rendered. This opinion reflects that and allows accident victims to to pursue a fair and complete award of damages.

Even when the facts of your case and the issues in your case may seem straightforward, your actual case may be anything but. That’s when you need experienced injury counsel representing you, understanding all of the nuances and complexities and helping to ensure you put on a strong case for the compensation you deserve. The hardworking San Mateo car accident attorneys at the Law Offices of Galine, Frye, Fitting & Frangos are dedicated to fighting for injured people in their pursuit of fair compensation for the harm they’ve suffered. To set up a free consultation with one of our experienced attorneys, contact us at 650-345-8484 or through our website.

More Blog Posts:

Uninsured California Driver Entitled to Recover Full Amount of Her Past Medical Bills in Injury Judgment, San Mateo Injury Lawyers Blog, published June 8, 2016

California Bicyclist’s $3.7M Jury Verdict Survives At-Fault Driver’s Appeal, San Mateo Injury Lawyers Blog, published May 24, 2016

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