The collateral source rule states: “If an injured person receives compensation for injuries from an independent source (such as an insurance company) other than the person who actually injured her, then that money should not be deducted from the damages the person would otherwise collect from the defendant.”  A plaintiff is “entitled to recover compensation for the full amount of the harm inflicted upon her, notwithstanding the discount where defendant has nothing to do with procuring the discount.”  Arambula v. Wells 85 Cal. Rptr. 2d 584 – Cal: Court of Appeal, 4th Dist., Div. 3 1999.

Here is the summary of the holding in Howell v. Hamilton Meats & Provisions, Inc.:

“In this personal injury action, plaintiff Rebecca Howell’s private health care insurance policy provided indemnity coverage for medical expenses she incurred for treatment of injuries she sustained in a vehicle accident caused by the negligent driving of an employee of defendant Hamilton Meats & Provisions, Inc. (Hamilton). Howell appeals an order granting Hamilton’s posttrial motion to reduce by $130,286.90 the jury’s special verdict award for her past injury-related medical expenses from $189,978.63, which was the full amount of her medical bills, to $59,691.73, the amount her medical providers Scripps Memorial Hospital Encinitas (Scripps) and CORE Orthopedic Medical Center (CORE) accepted as payment in full from Howell’s health care insurer, PacifiCare PPO (PacifiCare). Howell contends the order should be reversed because (1) the reduction of the jury’s award for her past medical expenses violates the collateral source rule, which (as we shall discuss more fully, post) generally bars at trial in a personal injury case evidence of compensation the plaintiff has received for her injuries from a source wholly independent of the defendant tortfeasor; and (2) Hamilton’s motion was “procedurally improper and lacked sufficient evidence to support the claimed reduction.”

We hold that in a personal injury case in which the plaintiff has private health care insurance, the negotiated rate differential is a benefit within the meaning of the collateral source rule, and thus the plaintiff may recover the amount of that differential as part of her recovery of economic damages for the past medical expenses she incurred for care and treatment of her injuries. Applying this holding to the instant case, we conclude the court erred by granting Hamilton’s postverdict motion to reduce the jury’s special verdict award for the injury-related medical expenses Howell incurred. Accordingly, we reverse the order.”