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Daily Blast April 27, 2017

New Court of Appeal Opinion re: Introducing Evidence of Benefits Under the Patient Protection and Affordable Care Act

The Court of Appeal, First Appellate District, Division One (San Francisco), just issued a significant opinion in Cuevas v. Contra Costa County (Apr. 27, 2017, A143440 & A144041) __ Cal.App.5th ___, holding that evidence of future benefits under the Patient Protection and Affordable Care Act (“ACA”) is admissible at trial. The court analyzed whether the trial court erred in excluding evidence that health insurance benefits under the ACA would be available to mitigate the plaintiff’s future medical costs. The court held that the trial court erred in ruling that evidence of future ACA benefits is inadmissible. (Slip opn., p. 1.)

The plaintiff brought a medical malpractice action against the County of Contra Costa arising out of injuries he sustained at birth. (Slip opn., p. 1.) A jury awarded the plaintiff $9,577,000 as the present cash value of his future medical and rehabilitation care expenses. (Ibid.) Before trial, the plaintiff filed a motion to exclude evidence, opinion, or argument regarding any possible future medical benefits available through ACA-mandated insurance. The plaintiff asserted that Civil Code section 3333.1, a statute contained within the Medical Injury Compensation Reform Act (MICRA), does not allow the introduction of evidence regarding future collateral source medical benefits. (Id. at p. 4.) The trial court, relying on section 3333.1, ruled the defendant could not introduce any evidence of Medi-Cal benefits, nor could it introduce evidence of ACA insurance benefits. (Ibid.) The court also reasoned there was no certainty the benefit would remain in place. (Id. at p. 5.)

On appeal, the court determined that evidence regarding future benefits is admissible under Civil Code section 3333.1. (Slip opn., p. 10.) Civil Code section 3333.1 states that “n the event the defendant so elects . . ., he may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury pursuant to the United States Social Security Act, any state or federal income disability or worker’s compensation act, any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services.” (Italics added.)

The court agreed with the defendant that the statute’s use of the term “amount payable,” instead of “amount paid” contemplates that evidence of future benefits should be admissible as well. (Slip opn., p. 11.) The court also determined that “nterpreting the statute as abrogating the collateral source rule with respect to future medical benefits as well as past benefits is consistent with the legislative purpose of reducing malpractice insurance costs.” (Id. at p. 15.)  Accordingly, “section 3333.1 permits the introduction of evidence regarding future as well as past medical benefits. The trial court thus erred in relying on this section to bar defendant from introducing evidence of future benefits.” (Id. at p. 17.)

The defendant also argued that the trial court erred, independent of section 3333.1, by relying on the collateral source rule to exclude evidence of the ACA and the amounts that healthcare providers typically accept as payment for their services. The Court of Appeal agreed. (Slip opn., p. 17.) According to the court, Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541, Corenbaum v. Lampkin (2013) 215 Cal.App.4th 1308, and Markow v. Rosner (2016) 3 Cal.App.5th 1027, “support the conclusion that the collateral source rule is not violated when a defendant is allowed to offer evidence of the market value of future medical benefits.” (Slip opn., p. 19.) The court agreed with “Corenbaum that while an injured plaintiff is entitled to recover the reasonable value of medical services that are reasonably certain to be necessary in the future, evidence of the full amount billed for past medical services cannot support an expert opinion on the reasonable value of future medical services.” (Id. at p. 22, original italics, citing Corenbaum, supra, 215 Cal.App.4th at pp. 1330-1333.)

Additionally, the court determined that the defendant, through the declaration of its expert, “presented evidence sufficient to support the continued viability of the ACA, as well as its application to plaintiff’s circumstances.” (Slip opn., p. 20.) As a result, “the trial court’s decision to exclude evidence of future insurance benefits that might be available under the ACA on the basis that the ACA is unlikely to continue was an abuse of discretion.” (Ibid.)

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