There was a very pivotal decision yesterday in a California case involving the collateral source issue. In Howell v. Hamilton Meats, in a 6 to 1 decision, the California Supreme Court held that a plaintiff may only recover the actual amount charged for medical expenses and may not recover the amount written off pursuant to agreements between health insurers and healthcare providers. The court left open the question of whether amount charged by the healthcare provider prior to the "write-off" could be admitted into evidence. There is some speculation that the retroactive application of this ruling means that there could be new trials awarded or damage reductions in prior cases where a plaintiff recovered more than the paid amount for medical expenses.
In an ironic twist, a similar case is currently before the normally conservative Alabama Supreme Court. It remains to be seen whether Alabama will follow the similar conservative approach that California has now adopted. Oral arguments have taken place in the Alabama case and a ruling is forthcoming. The issue in that case is whether the defendant can admit into evidence for the jury to hear the lesser amount paid by healthcare providers to satisfy the higher charges.