Bill to Create ‘Framework for Damages’ Passes Calif. Senate

By | May 31, 2012

A bill its author says will provide a framework to measure damages when a plaintiff suffers injuries that passed the California Senate floor is being called by its detractors a “wolf in sheep’s clothing” effort to overturn the 2011 Howell vs. Hamilton Meats Supreme Court decision.

Senate Bill 1528, authored by Senate President Pro Tem Darrell Steinberg, D-Sacramento, “seeks to establish a framework for compensating injured persons, and provides that existing lien rights and existing law regarding medical services shall be maintained, as specified.”

That’s the majority of its language. Not much more is stated about the bill, which is considered a spot bill – a sparsely written piece of legislation to which its author intends to add later. The bill passed Senate 22-13 on Wednesday. It’s now headed to Assembly.

“It’s a work in process and he’s trying to establish a framework,” Alicia Trost, communications director for Steinberg said of SB 1528, adding “there’s not a lot of meat in the bill.”

Trost said meetings with stakeholders will be convened to draft more language for the bill, which she said is intended to help people get fairly compensated when they’re injured. Steinberg, who was busy in a Senate session, wasn’t immediately available for comment, Trost said.

In statements he made on the Senate floor Steinberg acknowledged the bill was a work in progress, and that he’s committed to continuing discussions with stakeholders to establish a framework that includes fair recovery to the inured.

He also stated that it is not his intention to disturb the Medical Injury Compensation Reform Act. MICRA, which was passed in the 1980s, places limits on non-economic damages and limits attorney’s fees.

However, the bill’s opponents believe it is designed to cater to the wishes of trial lawyers, and it is intended to overturn the Howell v. Hamilton Meats Supreme Court decision, which held that medical damages should be based on the actual amount paid to the medical provider rather than what the provider billed.

One of the bill’s main opponents is the Association of California Insurance Companies, which argues that billions of dollars may be at stake if attorneys are allowed to sue for what medical providers bill for injuries treated. Medical providers often bill for more, then accept less under agreements with medical insurers.

Armand Feliciano, the group’s vice president, said ACIC was able to get a hold of a draft of the language that is intended to go into the bill.

“We’ve seen the language, though they won’t recognize that as the official language,” he said. “We’ve seen the language and it clearly overturns the Howell versus Hamilton Meats decision.”

ACIC estimates that $2.3 billion in medical damages were paid in California last year by automobile and homeowners’ insurers. And according to Feliciano, SB 1528 would enable attorneys to legally pursue and obtain the higher amount that medical providers charge, which is almost always double the paid amount, he said.

“If we had to pay the higher amount what would that be? It would be nearly double that amount,” he said.

He said the bill will negatively impact not just homeowners’ and auto insurers, but commercial liability providers, and self insureds as well.

“It’s not purely an insurance issue,” he said. “If you are self-insured, if you’re, say, a city, any slip and fall that happens on your premises under this bill you would have to pay the higher amount.”

He added, “And this all goes to the trial lawyers and their clients.”

Trost said no language is set for the bill, and such language will be drafted following the stakeholder meetings.

“I’m sure there’re various forms of drafts that people will suggest to us,” she said. “Right now what we have is what you can see online.”

Trost acknowledged Steinberg’s bill will address Howell v. Hamilton Meats, which she said created confusion and spun off “policy concerns from the confusion.”

“He clearly acknowledges that we’re trying to figure out how people will get fairly compensated after they’re injured,” she added.

Among the bill’s supporters are the Consumer Attorneys of California. It’s opposition includes ACIC, the California Chamber of Commerce and the California Association of Health Facilities.

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