California Court Excludes Evidence of Third-Party Payment to Medical Providers for Lien in Car Accident Case

In a recent case, the California Court of Appeal addressed the issue of how to assess economic damages, such as medical expenses, in auto accident cases.  Proving the amount of damages in an automobile accident can be complex.  In this particular case, the court excluded evidence relating to the amount that a third-party provider paid for a lien.  The court held that the probative value of that evidence was outweighed by the likelihood of undue prejudice.

A vehicle driven by Clare Meline struck a vehicle driven by Anna Uspenskaya in a busy intersection.  Ms. Uspenskaya suffered spinal injuries, and she ultimately required surgery to correct a herniated lumbar disc.  At the time of the accident, Ms. Uspenskaya did not have health insurance.  She entered into an agreement with her physicians and the hospital in which they treated her in exchange for a legal right to receive a portion of the damages award she may recover in a personal injury lawsuit. Later, the medical providers sold that lien at a discount to a third-party financial services entity called MedFinManagers LLC.

Ms. Uspenskaya sued Ms. Meline for damages.  During the trial, Ms. Meline asked to introduce evidence of the amount MedFinManagers paid to purchase the lien.  Ms. Meline contended that the evidence showed the true, reasonable cost of the care received by Ms. Uspenskaya.  The judge rejected the request and kept the payment evidence out of the trial.  The jury awarded Ms. Uspenskaya damages in excess of $429,000. This included $261,713 in past medical expenses, which was the full total of the bills that Ms. Uspenskaya submitted.

On appeal, Ms. Meline argued that by allowing the billed amounts to be introduced into evidence while excluding the evidence of the MedFinManagers payments, the court determined that the billed amounts represented the reasonable value of Ms. Uspenskaya’s surgery.

The appellate court found that the evidence of the MedFinManagers payments was relevant because it tended to prove reasonable value.  But, the court stated, without evidence that the payments represented a reasonable value for the treatment, the probative value of that evidence as to reasonable value was minimal.  Furthermore, admitting the evidence relating to the MedFinManagers payments would likely confuse or prejudice the jury.  The amount that MedFinManagers pays to medical providers is not based only on the value of the medical services provided.  In other words, the amount that MedFinManagers offered to Ms. Uspenskaya’s hospital and doctor did not solely reflect the value of services provided, but instead the collectability of the debt. Factors such as MedFinManagers’ assessment of the strength of the victim’s legal case are included in the value of the providers’ services.

While Ms. Meline cited cases in which similar evidence had been admissible, the appellate court rejected those cases as unpersuasive based on differing facts.  In those injury cases, medical providers accepted a partial payment as a full settlement of the debt.  In Ms. Uspenskaya’s case, the victim remained on the hook for the amount of the lien.

The appellate court held that the exclusion of the MedFinManagers payments was not an abuse of the trial court’s discretion.

At Sharifi Firm, our car accident attorneys can help you receive the legal results you deserve. Call us today for a free consultation at 866-422-7222.

More Blog Posts:

California Court of Appeals Upholds Decision to Grant New Trial on Damages in Bus Accident Case, Southern California Injury Lawyer Blog, June 26, 2015

California Court of Appeals Clarifies Foreign Body Language for Medical Malpractice Claims,  Southern California Injury Lawyer Blog, June 19, 2015

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