In David Yaffee v. Joseph Skeen, et al., (Filed 11/25/2024, C097746 and C097988), the California Court of Appeal, Third Appellate District, held that evidence of the reasonable value of medical services rendered to an insured Plaintiff was improperly admitted by the trial court where the admitted evidence suggested the reasonable value of the services rendered exceeded the amounts accepted by the hospital (from the Plaintiff’s insurer) as payment in full.
In the case, Mr. Yaffee was injured during a rear-end collision caused by Mr. Skeen. Yaffee was admitted to UC Davis hospital the day after the collision, where he was discharged later that same day. The hospital referred Plaintiff to many of their affiliates for ongoing care over the next several years. At trial, Plaintiff’s medical billing expert was allowed to testify that the reasonable value of the care provided to Plaintiff totaled $993,083.21 – an amount that exceeded what the facility had accepted as payment in full from the Plaintiff’s health insurer for the services rendered. The jury ultimately entered an award of $993,083 in past medical expenses to Plaintiff.
On appeal, Skeen argued that pursuant to Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, and its progeny, the trial court erred in permitting any testimonial evidence that the reasonable value of the medical services rendered to Plaintiff exceeded what the health care provider had agreed to accept in full payment, for the services, from Plaintiff’s health insurer. Yaffee argued that the trial court did not err in admitting such evidence, claiming that the Hospital Lien Act (“HLA”) permitted UC Davis to seek the difference of what it accepted in full versus what it charged from the Plaintiff – thereby rendering Plaintiff responsible for the entire “reasonable value” of the services rendered as testified to by plaintiff’s expert.
After a lengthy discussion of the HLA’s intent and legislative history, and the Collateral Source doctrine, the Court concluded that the HLA only permitted the recovery of such delta when the services rendered were for “emergency and ongoing medical or other services” – concluding that any services rendered by the facility to the patient after discharge do not fall within the HLA’s scope. Thus, because Mr. Yaffee received emergency services the day after the automobile collision, but was discharged that same day, all of the services rendered by the facility thereafter did not fall within the HLA’s reach.
In turn, the Court concluded that because the HLA’s lien rights did not apply to the services rendered to Plaintiff after he was discharged, it was reversible error for the trial court to admit testimony from plaintiff’s expert opining that the reasonable value of the services rendered by the facility was greater than the amount it accepted in full from Plaintiff’s insurer. The Court of Appeal expressly held that Howell, and its progeny, applied to bar plaintiff’s recovery of any amounts beyond what the medical facility accepted as payment in full for the services rendered, given the inapplicability of the HLA to the vast majority of the past medical services at-issue.
The decision operates as a staunch affirmation of the Howell line of cases, and demonstrates the California Court’s unwillingness to create exceptions for personal injury plaintiffs seeking to recover more than what was paid to a health care provider as payment in full by a health insurer. It also provides a roadmap for plaintiff and defense attorneys navigating evidentiary issues pertaining the recoverability of past medical expenses in personal injury actions – especially on the issue of emergency room care. Whether the matter is appealed to the California Supreme Court remains to be determined.
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