Verdict Rewards Plaintiffs Receiving Medical Care on Lien-Basis

A recent verdict in favor of the plaintiff in Pebley v. Santa Clara Organics, LLC (2nd District Case No. B277893) is significant in that it addressed major issues litigated following the verdict in Howell v. Hamilton Meats (2011). In Howell, the court determined that plaintiff could recover in damages the amounts her insurer paid for her medical care. Plaintiff could not, however, recover amounts that were included in a provider’s bill but for which the plaintiff never incurred liability because the provider accepted a lesser amount as full payment by prior agreement, as such amounts were not damages the plaintiff otherwise would have collected from the defendant.
In Pebley, the court addressed post-Howell issues concerning plaintiffs who have health insurance, but nevertheless obtain medical care on a lien basis. A plaintiff who has health insurance, but chooses not to use it, and instead treats on a lien basis, is treated as a “non-insured” plaintiff for the purposes of the Howell analysis.
The court in Pebley rejected the “failure to mitigate” argument made by the defense. The court therefore determined that plaintiffs may present their billed medical expenses with expert testimony that those billed costs are “reasonable and customary costs in the community.”
The court further provided:
e to do so.”
Further, “Defendants cite no authority suggesting plaintiff’s tort recovery should be limited to what Kaiser (and possibly Medicare) would have paid had he chosen to treat with providers who accept that insurance.”
This verdict essentially serves to reward uninsured plaintiffs or plaintiffs who choose not to use their health insurance over plaintiffs who do use their health insurance. Bills on liens are higher than bills paid by insurance, so whether intended or not, verdicts and settlements in such cases have noticeably increased post-Howell.