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Corenbaum v. Lampkin: Recent decision in which the appellate court applied Howell v. Hamilton Meats to hold evidence of the full amount billed by a healthcare provider is not relevant to a determination of past or future medical expenses, or general damages, and is therefore not admissible.

Corenbaum v. Lampkin: Recent decision in which the appellate court applied Howell v. Hamilton Meats to hold evidence of the full amount billed by a healthcare provider is not relevant to a determination of past or future medical expenses, or general damages, and is therefore not admissible

In a very important decision on personal injury damages post-Howell v. Hamilton Meats, Division Three of the Second Appellate District held in Corenbaum v. Lampkin (April 30, 2013) 13 C.D.O.S. 4370, that evidence of the full amount billed by healthcare providers is not relevant to the determination of the amount of past medical expenses sought by plaintiff in a personal injury action and is therefore not admissible. Only the amount actually paid and accepted for services rendered--the amount the healthcare provider accepted as payment in full pursuant to a prior agreement, also called the "negotiated rate differential"--is relevant and admissible. In addition, the court ruled that evidence of the full amount billed for past medical services is not relevant to any determination of damages for future medical expenses or general damages.

The court explained its ruling does not undermine or violate the collateral source rule: "[E]vidence of the amount accepted by medical providers as full payment does not violate the collateral source rule and is admissible provided that the source of the payment is not disclosed to the jury and the evidence satisfies the other rules of evidence. In so holding, it found the trial court erred by admitting the full amounts billed for the plaintiff's medical care, which were "not relevant to the amount of damages for past medical services, damages for their future medical care or noneconomic damages," and reversed that portion of the judgment related to compensatory damages.

Plaintiffs Daniella Carter and John Corenbaum were injured when a taxi in which they were passengers was struck by defendant Dwight Eric Lampkin. At trial, the court allowed the jury to hear evidence of the full amounts billed by plaintiff's healthcare providers for past medical care. The jury heard no evidence that the healthcare providers accepted lesser amounts as payment in full due to prior agreements the providers had with defendant's private insurers. The Court of Appeal discussed the history behind the Howell decision at length, and emphasized that the "full amount billed by medical providers is not an accurate measure of the value of medical services" which can vary greatly from provider to provider in California. "Howell stated that 'a medical care providers' billed price for particular services is not necessarily representative of either the cost of providing those services or their market value.' " The Corenbaum court observed that the "negotiated rate may be the best indication of the reasonable value of the services provided and that it is unclear how any other 'market value' could be determined."

However, while the Howell court did not rule on whether evidence of the full amount billed is relevant or admissible on issues such as future medical damages or general damages, the Corenbaum court took that step. It held that not only is evidence of the full amount billed for medical services not relevant to a determination of past medical damages, but it is also not relevant or admissible for determining future medical damages or general damages, and that admission of evidence those amounts accepted by providers as payment in full, rather than the amounts billed, does not violate the collateral source rule.

Since the evidence of amounts billed is not relevant to a determination of past medical damages, such evidence cannot be brought in through, or used as a basis for, expert opinion testimony on the reasonable value of future medical costs, either. Because Evidence Code sections 801 and 802 limit the type of evidence upon which an expert may rely and the bases for an expert's opinions, experts may not rely on the full amounts billed for a plaintiff's past medical expenses since those amounts are not relevant. The court also found that to allow an expert to testify about the full amount billed for medical expenses when testifying about the reasonable value of future services would necessarily "lead to the introduction of evidence concerning the circumstances by which a lower price was negotiated with that plaintiff's health insurer, thus violating the evidentiary aspect of the collateral source rule."

Finally, the court acknowledged that some personal injury attorneys use the measure of economic damages to help the jury determine the amount of noneconomic damages. "We need not comment on this practice except to state that it can provide no justification for the admission of evidence that is otherwise inadmissible and that is not relevant to the amount of economic damages." Since only the amount accepted by the provider for services rendered pursuant to a prior agreement is relevant and admissible to show economic damages, "evidence of the full amount billed is not admissible for the purpose of providing plaintiff's counsel an argumentative construct to assist a jury in its difficult task of determining the amount of noneconomic damages and is inadmissible for the purpose of proving noneconomic damages." Interestingly, the court also ruled that Lampkin was not precluded from objecting to the admission of the full amounts billed for the first time on appeal in this case because an "appellant may challenge the admission of evidence for the first time on appeal despite his or her failure to object in the trial court if the challenge is based on a change in the law that the appellant could not reasonably have been expected to foresee." Here, the Howell decision announced the new rule after the trial of the underlying case.

This decision is very important for defense counsel in all personal injury actions. It clearly holds that amounts billed are inadmissible, and that evidence of amounts paid to and accepted as payment in full by providers is all that should go to a jury. This decision stops all potential points of entry of evidence of amounts billed for services, rather than the actual amounts paid to and accepted by providers pursuant to prior agreement. No longer can experts testify to billed costs in an effort to inflate future damage calculations, or general damages.