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Understanding Medical Expenses in Your California Personal Case

medical bills personal injury

Understanding Medical Expenses in Your California Personal Injury or Wrongful Death Case: Hanif, Howell, and Why You Need an Experienced Attorney 

If you’ve been injured in an accident or lost a loved one due to someone else’s negligence, you’re likely dealing with a lot—emotional pain, medical bills, and maybe even a battle with insurance companies. When you hire a personal injury or wrongful death attorney, one of the big things we fight for is compensation for your medical expenses. But in California, some important court decisions—like *Hanif*, *Howell*, and others—have changed how much you can claim for those medical bills. On top of that, if Medi-Cal or Medicare paid for your care, their rules can affect what you owe back. These rules are complicated, and they make it more critical than ever to have an experienced attorney on your side. Let’s break it all down in plain English so you know what to expect—and why you shouldn’t go it alone. 

 1. The Old Way vs. the New Way: How Much Can You Claim for Medical Bills? 

Before we get into the court cases, let’s talk about why this matters. When you go to the doctor or hospital, they send a bill with a big number on it. But if you have insurance, they often negotiate that bill down to a much smaller amount and pay that instead. The question in a lawsuit is: do you get to claim the big number (the “billed amount”) or the smaller number (what your insurance actually paid)? 

 The Old Way 

A long time ago, plaintiffs (that’s you, the person suing) could sometimes claim the full billed amount as part of their damages, even if insurance paid less. It made sense on paper—if a doctor billed $50,000 for surgery, that’s what you’d claim, even if your insurance only paid $15,000. 

 The New Way: Hanif and Howell Changed the Game 

Two big court cases in California—*Hanif* (1988) and *Howell* (2011)—said that’s not fair. Here’s what they decided: 

  • Hanif (1988): This case involved Medi-Cal (California’s version of Medicaid). The court said if Medi-Cal paid a discounted rate for your medical care (say, $10,000 instead of a $30,000 bill), you can only claim the amount Medi-Cal paid as your damages. Why? Because that’s the real “cost” you or someone on your behalf actually paid. 
  • Howell (2011): This case took it further and applied the same logic to private insurance. Let’s say your hospital billed $100,000, but your private insurance negotiated it down to $25,000 and paid that. The court said you can only claim the $25,000 as damages—not the $100,000. The reasoning is simple: you’re not on the hook for the full amount, so you shouldn’t get a windfall by claiming it. 

These rulings mean that in most cases, the amount you can claim for past medical expenses is limited to what was actually paid by insurance (or accepted by the provider as full payment). The big billed amounts you see on paper? They don’t count anymore unless you’re personally responsible for paying them. 

2. Insurance Reimbursement: What Happens After You Win? 

Let’s say you win your case or get a settlement. You might think, “Great, I’m done!” But if your insurance company paid your medical bills, they might want some of that money back. This is called “reimbursement” or “subrogation,” and it’s another layer of complexity that can eat into your recovery if not handled properly. Here’s how it works: 

  • Private Insurance: If your private health insurance paid for your medical care, they might have a clause in your policy saying they can get reimbursed from your settlement. For example, if they paid $20,000 for your hospital stay, they might demand that $20,000 back from your settlement. An experienced attorney can often negotiate this amount down, especially if your settlement isn’t huge. We might argue, for instance, that the insurance company should take less because you had to fight hard to win the case and cover other losses (like pain and suffering). 
  • The Effect of Howell: The *Howell* ruling doesn’t directly change how reimbursement works, but it does mean the amount you’re claiming for medical expenses is lower to begin with (since you’re limited to what insurance paid). That can make negotiations with your insurance company a bit easier because the numbers are smaller—but it still takes skill to get the best outcome. 

3. Medi-Cal and Medicare Liens: How They’re Different 

If Medi-Cal or Medicare paid for your care, they also have the right to get paid back from your settlement—but their rules are stricter than private insurance. These are called “liens,” and they work differently from private insurance reimbursement. Navigating these liens is a minefield, and one wrong step can cost you thousands. Let’s break it down: 

Medi-Cal Liens 

  • What They Want Back: Medi-Cal will want to recover what they paid for your care related to the accident. So if they paid $15,000 for your hospital stay after a car crash, they’ll put a lien on your settlement for that amount. 
  • Can You Negotiate?Yes, but it’s not always easy. Medi-Cal has strict rules, and California law limits how much they can take from your settlement. For example, they can’t take more than a certain percentage of your total recovery (often 50% or less, depending on the case). An experienced attorney knows how to reduce the lien as much as possible, arguing that Medi-Cal should take less to leave you with more for your other losses (like pain and suffering). 
  • How It’s Different: Unlike private insurance, Medi-Cal’s rates are very low because they negotiate steep discounts with providers. The *Hanif* case we talked about earlier specifically applies to Medi-Cal, meaning your damages are limited to their paid amount, and their lien reflects that same low amount. 
  • Medicare Liens 
  • What They Want Back: Medicare also places a lien on your settlement for what they paid for your care related to the injury. Let’s say they paid $30,000 for your surgery and follow-up care—they’ll want that $30,000 back. 
  • Can You Negotiate? Yes, but Medicare is tougher than Medi-Cal. They have a federal right to reimbursement, and they don’t budge as much. An experienced attorney can sometimes get reductions if there are errors in what Medicare claims or if paying the full amount would leave you with nothing. We also have to be extra careful because Medicare can come after you years later if the lien isn’t handled properly. 
  • **How It’s Different:** Medicare liens are governed by federal law, which makes them more rigid than Medi-Cal (which is state-run). Also, Medicare often pays higher rates than Medi-Cal, so their liens might be larger. And if you’re expecting future medical care related to your injury, Medicare has rules about setting aside money for that care (called a Medicare Set-Aside), which can complicate things further—and requires careful legal planning. 

4. What This Means for Your Case 

So, what’s the bottom line? Here’s how all of this affects your personal injury or wrongful death case: 

  • Lower Damages for Past Medical Expenses:Because of *Hanif* and *Howell*, if insurance (private, Medi-Cal, or Medicare) paid your bills, you can usually only claim the amount they paid—not the bigger billed amount. This can make your damages look smaller, but it’s also more honest since you’re not actually on the hook for the full bill. 
  • Dealing with Reimbursement and Liens:After you settle or win, we’ll need to deal with any reimbursement demands from your private insurance or liens from Medi-Cal or Medicare. These demands can significantly reduce your final recovery if not handled with expertise. An experienced attorney knows how to negotiate these down so you keep as much of your money as possible. 

5. Why You Need an Experienced Attorney More Than Ever 

The rules set by *Hanif* and *Howell*, along with the complexities of insurance reimbursement and Medi-Cal/Medicare liens, have made personal injury and wrongful death cases more challenging than ever. These laws limit what you can claim for medical expenses, and the lien and reimbursement process can eat into your settlement if not managed carefully. Without a deep understanding of these rules—and the strategies to navigate them—you risk losing out on the full compensation you deserve. 

That’s where an experienced attorney comes in. At Schurmer•Reese•Davies, we’ve been handling cases like yours for years, and we’ve seen firsthand how these laws can trip up even the most well-meaning clients. We know how to maximize your compensation within the limits of *Hanif* and *Howell*. We’re skilled at negotiating down liens and reimbursement demands, whether it’s with private insurance, Medi-Cal, or Medicare. And we understand the ins and outs of federal and state regulations, so we can protect your settlement from unexpected clawbacks years down the line. Going it alone—or hiring someone without this specific expertise—could cost you thousands and leave you with far less than you’re entitled to. 

Don’t let these complicated rules stand in the way of your recovery. If you have questions about your case or how these laws might apply to you, give us a call. We’re here to help you understand your rights, fight for every dollar you deserve, and guide you through this process with the expertise you need to come out ahead.