First few Article Sentences
The Patient Protection and Affordable Care Act (ACA) requires all Americans to have health insurance – and health insurance companies cannot deny coverage for a pre-existing condition. This is not news – but what is new is the increased scrutiny and the changes in the methods used to determine the “reasonable value” of future medical costs. This comes into play in litigation cases between providers and health plans, and on behalf of patients and providers involved in malpractice, workers’ compensation and personal injury cases. Health care providers should understand how the value of medical expenses are determined, especially future medical costs.
Recent court rulings have raised several questions around the reasonable value of health care. In personal injury or malpractice claims, reasonable value was historically driven by provider’s billed amounts for past and future medical services. However, the law did not consider negotiated discounts or write-offs as part of the ruling.
Then, in 2011, the California Supreme Court ruled in Howell v. Hamilton Meats & Provisions, Inc. that an injured plaintiff whose medical expenses are paid through private insurance could only recover the contractually adjusted amount that was actually paid – not the full amount billed. This significantly impacted personal injury cases from both a plaintiff’s and defendant’s perspective.