Hanif v. Housing Authority

In Hanif v. Housing Authority, 200 Cal. App. 3d 635 (Cal. Ct. App. 1988), a California appeals court limited the plaintiff's damages to the amount paid by Medicaid. The Hanif plaintiff sued for $ 31,618 in medical expenses, even though the medical providers had accepted $ 19,317 from Medicaid and written off the balance. Id. at 197. California measures a defendant's liability by the "reasonable value" of medical care and services attributable to the tort. Id. at 194-95. Hanif reasoned that the term "reasonable value" is one of limitation, not aggrandizement. Id. at 195. Thus, where a fixed sum has been incurred for medical expenses, that sum is the most the plaintiff may recover even if it is less than the prevailing market rate. Id. In sum, the Court of Appeal reduced the special damages because the trial court awarded the plaintiff the market value of the medical services instead of the lower amount that Medi-Cal paid. As Ha correctly notes, the critical factor in Hanif was not which third party paid the bill, but what it paid. The court relied on traditional principles of tort law and treated Hanif's status as a Medi-Cal recipient no differently than that of a plaintiff with private insurance. ( Hanif v. Housing Authority, supra, 200 Cal. App. 3d at pp. 640-641.) It stated "plaintiff is deemed to have personally paid or incurred liability for these services and is entitled to recompense accordingly. This is not unreasonable or unfair in light of Medi-Cal's subrogation and judgment lien rights." ( Id. at p. 640.)