California Injury Law: Medical Billing and Settlement Damages

Since the Hanif v. Housing Authority (1988) and Nishihama v. City and County of San Francisco (2001) cases have been decided, the insurance companies have successfully argued over and over that the personal injury claimants should not be entitled to recover damages based on the actual charges for the necessary medical services received, but only for those actually billed to the private health insurer.

In other words, if you have been injured in an accident, have received emergency room care and other medical care totalling $20,000 in medical expenses, but your health insurance provider (such as Blue Cross) that has a special arrangement with the hospital, reduced the bill to $8,000, the third party insurance company for the driver at fault would normally argue that your damages should be based on the latter figure of $8,000 rather than actual billing charges.

However, this argument on reduction of damages might not have much validity any longer. In a recent case Olsen v. Reid, filed on 6/23/2008, the above case decisions and their logic has been condemned and practically shattered by the fourth district appellate court. The court passionately supported the rationale of the long standing “collateral source rule” in California, which states that the recovery of the victim in an injury case should not be reduced just because some of the damages were coverd by a collateral source (such as health insurance company).  The court criticized Hanif and Nishihama decisions, insisting that it is appropriate for the jury at an injury case trial to hear evidence as to the full amount of the injured claimant’s damages and not the reduced amount that was billed.

The forth district emphasized that the more recent cases held that if an injured party receives some compensation for his injuries from a source wholly independent of the tortfeasor (for example, the driver at fault), such payment should not be deducted from the damages which the plaintif would otherwise collect from the defendant.

This recent decision significantly weakens if not eradicates, at least for now – until and unless the California Supreme Court makes a ruling on this issue, the Hanif/Nishihama argument that the insurance companies like to use to reduce their settlement offers.

When the insurance company offers to pay your medical expenses

It is not uncommon for the insurer of the driver at fault to send the injured party a letter denying liability, but at the same time offering or even encouraging the person who was hit by their insured to submit his medical records and bills, so that the insurance company can pay the same bills. Usually, these payments are made under the medical payments coverage in the insurance policy up to the stated limit.

When the insurer makes payments under the med-pay coverage, this doesn’t mean that they accept or deny liability, but any such payments will be offset against future recovery, should the injure case settle. If you are offered to have your medical bills paid by the other driver’s insurer, you should feel free to accept that coverage. However, you should also make sure that you don’t sign any release documents that would waiver your rights to proceed with your personal injury action later.

If you have any questions about your medical expenses incurred as a result of an injury accident in San Francisco Bay Area or Sacramento areas, contact experienced personal injury lawyer who will answer your questions competently and attentively at absolutely no charge or obligation.

A common mistake after being involved in an injury accident

I often receive calls from people who were just injured in an autoaccident, who are in pain, but who are also unwilling to go to the emergency room, as they are  concerned about the medical bills from the hospital, if the injured doesn’t have health insurance.

Not receiving an urgent care at a hospital if you are in serious pain within 24-48 hours after the accident or not going to see a doctor as soon as possible after the accident is a mistake for several reasons. First, even though you might think that you have not been seriously injured, there might be certain damage to the bone structure or soft tissue that would require urgent attention and that would help you recover faster.

Secondly,  that fact that you haven’t received treatment shortly after the accident is going to be one of the strongest arguments by the insurance company that you weren’t injured very seriously. After all, they will say, if you were injured as seriously as you say – why didn’t you seek treatment immediately?

Lastly, in most cases you shouldn’t be concerned about the medical bills. Assuming that you have the insurance information of the driver at fault, the injury lawyer representing you will contact the hospital and will request that your bill is placed on hold until your injury claim settles. If you didn’t manage to obtain an insurance information form the other driver, such as it happens in hit-and-run accidents, you will still be able to negotiate your medical bill with the hospital in most cases and/or agree on a very reasonable payment plan.

So, make sure that you get the medical care you need at the emergency room after being involved in an accident or some other kind of medical attention soon as possible, this will ensure better recovery and will protect your legal rights when you negotiate settlemet with the insurance company.