## Facts

- Rebecca Howell was seriously injured in an automobile collision caused by a driver acting within the course and scope of employment for Hamilton Meats & Provisions, Inc.
- Howell received extensive medical treatment from providers that had preferred-provider contracts with her health insurer.
- Under those contracts, providers accepted discounted negotiated rates as payment in full and wrote off the remaining balance.
- Howell’s providers billed approximately $189,978.63, but about $130,286.90 was written off under the insurer-provider agreements.
- The jury awarded Howell the full billed amount as past medical expenses.
- On the defendant’s post-trial motion, the trial court reduced the medical expense award to the amounts actually paid under the negotiated rates.
- The Court of Appeal reversed, reasoning that the collateral source rule permitted recovery of the full billed amounts despite the write-offs.
- The California Supreme Court granted review.

## Issues

1. Whether a personal-injury plaintiff may recover, as past medical expense damages, the full amounts billed by medical providers when providers accepted lower insurer-negotiated rates as payment in full and the plaintiff was never liable for the written-off balance.
2. Whether the collateral source rule permits recovery of medical bill amounts that were never paid and never owed by the plaintiff.

## Decision

- The California Supreme Court reversed the Court of Appeal and reinstated the trial court’s reduction of the past medical expense award.
- The Court held that Howell could not recover amounts billed but never paid and for which she never incurred liability.
- The Court concluded that recoverable past medical expense damages are limited to amounts actually paid or still owing at trial.
- The Court held the collateral source rule does not expand economic damages to include sums the plaintiff never incurred.

## Legal Principles

- A plaintiff may recover the reasonable value of past medical services, but recovery is limited to amounts actually paid or incurred (including amounts still owed) and may not exceed the plaintiff’s actual economic loss.
- Amounts written off under insurer-provider contracts are not recoverable past medical expenses when the plaintiff was never legally obligated to pay them.
- The collateral source rule prevents a tortfeasor from reducing otherwise recoverable damages by payments from independent sources (such as insurance), but it does not create damages for expenses never incurred.
- Insurer-negotiated rate differentials (provider write-offs) are not “payments” to the plaintiff or on the plaintiff’s behalf; they are contractual price terms that define what the services actually cost the insured patient.

## Conclusion

The court held that past medical expense damages in California are limited to the amounts actually paid or still owed for medical care, and that the collateral source rule does not permit recovery of insurer-negotiated write-offs that the plaintiff never paid and was never obligated to pay.


Howell v. Hamilton Meats & Provisions, Inc., 52 Cal. 4th 541 (Cal. 2011)