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Proving the Value of Present

and Future Medical Bills


Under Howell and Corenbaum:

How to Establish " Negotiated Rate
Differentials" in
Medicare, Kaiser and Other Lien
Cases
STARTING PREMISE
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Corenbaum v. Lampkin (2013) 215 Cal. App. 4th
1308, 1325-1326.
Damages for past medical
expenses are limited to the lesser
of (1) the amount paid or incurred
for past medical expenses and (2)
the reasonable value of the
services.
WHO ARE WE? WHY ARE WE
INTERESTED IN THIS TOPIC
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Tami Rockholt, RN, BSN (Rockholt
& Associates)

Seana B. Thomas, Esq. (Law Office
of Seana B. Thomas)

David Rosenbaum (McDowall
Cotter, APC)
WHERE TO LOOK FOR
SOURCES
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Case Law
Statutes
PERTINENT CASES
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Howell v. Hamilton Meats & Provisions (2011) 52
Cal. 4th 541

Corenbaum v. Lampkin (2013) 215 Cal. App. 4th
1308

State Farm Mutual Automobile Ins. Co. v. Huff
(2013) 216 Cal. App. 4th 1463 (a Hospital Lien,
hospitals bill itself was based on the District's
standard charges and thus is not an accurate
measure of the value of medical services.)


PERTINENT CASES
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Luttrell v. Island Pacific Supermarkets, Inc. (2013)
215 Cal. App. 4th 196, 206 (Howell applies to
Medicare and Medi-Cal payments)

Dodd v. Cruz (2014) Cal. App. LEXIS 118
(Discovery permissible if reasonably calculated
to lead to the discovery of admissible evidence
relating to the amount of medical expenses
Dodd actually incurred)

In Re Avandia Marketing, 2011 U.S. Dist. LEXIS
63544, (E.D. Penn. 2012) (Medicare Advantage
plans have same rights as Medicare)
PERTINENT LIEN STATUTES
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MEDICARE: 42 USC 1395 Y (B)2; 42
C.F.R. 411.20, Et. Seq
HMOS: Civil Code Section 3040
WORKERS Compensation: Cal. Labor
Code Sec. 3852-3862
HOSPITALS: Cal. Civil Code Sections
3045.1-3045.6
MEDI-CAL: Welfare & Instit. Code Sec.
14124.71-.791

REASONABLE VALUE
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An Experts World
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EXPERT OPINION
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A qualified expert may opine on the
reasonable value of medical services
based on matter, whether or not
admissible, that is of a type that
reasonably may be relied upon.
(Evid. Code, 801, subd. (b).)
Dodd v. Cruz, 2014 Cal. App. LEXIS 118 (Cal. App.
2d Dist. Feb. 5, 2014).
CHARGEMASTER
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HCPCS CODES

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Level I CPT codes from the AMA
Level II Non-physician services,
like ambulance, DME, prosthetics,
injections
Level III Local codes, obsolete
CPT VS. ICD-9/10 CODES

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What is a CPT code?
CPT modifier
CPT for Out patient care

What is ICD-9 (ICD-10)?

How do they Compare?
IMPORTANT REFERENCES

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201X HCPCS Level II
201X CPT Professional Edition
201X ICD-9-CM

USUAL AND CUSTOMARY
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Context4 Healthcare Usual:
Customary & Reasonable Fee
database
How does Usual and Customary
compare to Reasonable Value

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Howell Application
Part C & D
Medicare Pricing
HOWELLS APPLICATION
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Because Luttrell's liability to medical
providers for their past medical services is
limited to the amounts Medicare and Medi-
Cal actually paid, Luttrell's recovery from
Island Pacific for past medical services
must be limited to those amounts actually
paid.
Luttrell v. Island Pacific Supermarkets, Inc. (2013) 215
Cal. App. 4th 196, 206.
A, B, C, DS OF MEDICARE
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Part A
Inpatient
Hospital, Hospice,
Home Health and
Skilled Nursing
Facility (SNF)
Part B
MDs
Misc Med Care
Part C
Medicare+Choice
Medicare
Advantage
Medi-gap
MAOs

Part D
Rx Meds
MEDICARE PART C & D
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Paid by Medicare to provide benefits
Avandia: Howell impact
Same Pricing restrictions as
Medicare
Discovery:
Obtain copies of front and back of
health insurance cards.
CMS Declaration
Reimbursement to Plan
MEDICARE PRICING
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Databases that utilize Medicare pricing as
starting point
PFFS.com - Inexpensive source for physician
Medicare pricing
Medicare PCPRICER - Downloadable pricing
program for Medicare hospital stays
http://www.cms.gov/Medicare/Medicare-Fee-
for-Service Payment/PCPricer/inpatient.html
Acronyms Appearing in Federal Register
(handout)

TREATMENT PROVIDED ON A
LIEN BASIS

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Recent increase in plaintiffs
counsel sending INSURED
patients to lien providers to avoid
Howell limitation.
How to respond?

GOAL
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DEFENSE TO PRESENT EVIDENCE
IN CASE-IN-CHIEF THAT PLAINTIFF
HAD HEALTH INSURANCE BUT DID
NOT USE IT
RATIONALE:
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Failure to Mitigate Damages
the collateral source rule should not be
employed to preclude the defense from
putting on this key evidence
- (see CACI 3930; Pool v. City of Oakland
(1986) 42 C.3d 1051, 1066, holding, The
rule of [mitigation of damages] comes into
play after a legal wrong has occurred, but
while some damages may still be averted.)


HOWELL & THE I WORD
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Howell does not prohibit any
mention of insurance
- NB: risk of mistrial if prejudice outweighs
value of evidence. (See Howell,
headnote 5, citing Evidence Code
Section 352)
HOWELL & THE I WORD
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Argument:
grave prejudice by any ruling
depriving defense of the right to put
on evidence of failure to mitigate
damages during its case in chief;
post-trial evidence on this issue to
reduce special damage awards is
insufficient
HOWELL & THE I WORD
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Motion in Limine Positions:
Collateral source rule should not
prevail over defense right to put on
affirmative defense of mitigation of
damages.
Plaintiff opened the door.
Plaintiffs conduct was unreasonable
HOWELL & THE I WORD
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Post Trial
Be prepared to make motion for new
trial on the grounds of excessive
damages (see Howell).
Appeal

GATHERING EVIDENCE
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GOAL OF DISCOVERY TO SET UP
MOTIONS IN LIMINE
Form Interrogatory 4.1:
- was there in effect any insurance which you
were or might be covered for
examplemedical expense coverage.
RFP: insurance policy, health insurance
card
RFA: that you had health insurance to
cover
GATHERING EVIDENCE
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Subpoena: Health Insurer for policy
Depositions: Plaintiff and of Lien based
Provider
- Use Medical Billing Expert to Prepare
analysis of the reimbursement schedule for
plaintiffs insurance plan for the care provided
can prepare a UCR analysis
- Ask whether the lien provider accepts
whatever kind of insurance the plaintiff had
which was not used (they almost always do)
GATHERING EVIDENCE
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MEET AND CONFER
MOVE TO COMPEL
Dodd v. Cruz (2014) Cal. App. LEXIS 118

KAISERS CONSOLIDATED
STATEMENT
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Is it incurred?
Does is demonstrate a Reasonable
Value?
It is well known that Kaiser is an HMO
providing medical services to its
members rather than a medical service
provider with a conventional creditor-
debtor relationship to its patients.
In re Eric S. (2010) 183 Cal. App. 4th 1560, 1565.
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Kaiser is a CAPITATED PLAN
Apart from the described records,
however, the present record is entirely
silent on this subject. We are therefore
left with the uncontested recital in the
quoted document that the victim was
billed for the stated amount.
In re K.F. (2009)173 Cal. App. 4th 655, 663-
664
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The other document challenged by appellant is an
Explanation of Benefits from Kaiser, apparently
reflecting the value of ambulance service
provided. It lists $ 582.32 in Ambulance
Charges. It also describes this sum as the
amount charged. But it bears the prominent
legend, This is not a bill; it shows zeros in the
column marked Coinsurance/Copayment; there
is no entry in the column marked Amount Paid;
and in the space marked Your Obligation
appears the sum 0.00.
In re K.F. (2009)173 Cal. App. 4th 655, 663-664 .
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KAISER HAS 3 ENTITIES
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Kaiser Permanente is an integrated
managed care consortium. Kaiser
Permanente is made up of three distinct
groups of entities:
1. the Kaiser Foundation Health Plan and its
regional operating subsidiaries;
2. Kaiser Foundation Hospitals; and
3. the autonomous regional Permanente
Medical Groups.
HOW PROVIDERS ARE PAID
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KAISER PLAN LANGUAGE:

How Plan Providers are paid
Health Plan and Plan Providers are independent
contractors. Plan Providers are paid in a number of
ways, such as salary, capitation, per diem rates, case
rates, fee for service, and incentive payments.

To learn more about how Plan Physicians are paid to
provide or arrange medical and hospital care for
Members, please ask your Plan Physician or call our
Member Service Contact Center.
THE EXPERT ATTACK
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How to get to the lesser of paid v.
reasonable value.
Using CHARGEMASTER to compare
Reverse engineer from the chart notes
Review Healthcare Recoveries bill
Questions for Person Most Qualified
(PMQ)
California Charge Master website
(attachment)

THE DEFENSE ATTACK
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Motions in Limine
Preclude Introduction of Evidence
from Providers
Preclude Use of Kaiser Statement of
Services and Kaiser Consolidated
Statement

THE MOTION
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Plaintiffs Burden of Proof
Statement is Hearsay
Where invoices or accountings received from
third parties are offered into evidence as proof
of the transactions described, hearsay issues
arise which may be resolved only by the
testimony of a qualified witness.
Jazayeri v. Mao (2009) 174 Cal. App. 4th 301, 325
THE MOTION
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Statement is Hearsay
may be admitted for the limited purpose of
corroborating his testimony and if the charges
were paid, the testimony and documents are
evidence that the charges were reasonable.
Pacific Gas & E. Co. v. G. W. Thomas Drayage
etc. Co. (1968) 69 Cal. 2d 33, 42-43.
THE DEFENSE ATTACK
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Furthermore, the full amount billed by medical
providers is not an accurate measure of the
value of medical services because many
patients pay discounted rates, and standard
rates for a given service can vary tremendously,
sometimes by a factor of five or more, from
hospital to hospital in California.
State Farm Mutual Automobile Ins. Co. v. Huff
(2013) 216 Cal. App. 4th 1463, 1471 (citing
Corenbaum v. Lampkin (2013) 215 Cal.App.4th
1308 and Howell v. Hamilton Meats & Provisions
(2011) 52 Cal. 4th 541).

THE DEFENSE ATTACK
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Cannot demonstrate amount was
incurred: In re K.F. (2009)173 Cal.
App. 4th 655, 663-664.
Cannot demonstrate Statement
Reflects amount paid to providers:
Use plan documents
Take depositions

THE DEFENSE ATTACK
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Assertion of Lien does not equal
incurred amount
Lien language of plan refers to Civil
Code 3040
3040 has complex formula, the amount
stated will be misleading to the jury

THE DEFENSE ATTACK
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Violation of Collateral Source Rule

the evidentiary aspect of the collateral source
rule makes any evidence of a collateral source
payment inadmissible for the purpose of
determining the amount of damages. This
precludes evidence that an insurer, or another
source independent of the tortfeasor, paid for the
plaintiff's medical care, but does not preclude
evidence of the amount that a medical provider,
pursuant to prior agreement, accepted as full
payment.
Corenbaum v. Lampkin (2013) 215 Cal. App. 4th 1308, 1327.
THE DEFENSE ATTACK
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DISCOVERY (use criminal restitution
cases as guide)
Form Rog 4.1
RFP: plan documents
Depo: PMQ at Kaiser Facility
Depo: Treating docs no knowledge
of billing
Expert:
Use Billing expert
THE DEFENSE ATTACK
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DISCOVERY (use criminal restitution
cases as guide)
Expert:
Use Billing expert
If Plaintiff does not disclose, your
motion is to preclude the entire set of
charges.

ONE LAST THOUGHT
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With the Affordable Care Act,
everyone must have health
insurance.
Proving the Value of Present
and Future Medical Bills
Under Howell and Corenbaum
:
QUESTIONS?
THANK YOU!