Brown v. Stewart

BLEASE, J.

I concur in the result.

I think it clear from a reading of the Medical Injury Compensation Reform Act and its legislative history that the collateral source provisions of section 3333.1 were meant to apply to the monetary value of medical services provided under the Social Security Act. However, the Social Security Act directs the state to “seek reimbursement for such assistance to the extent of ... liability” of third parties. (42 U.S.C. § 1396a(a)(25).) Section 3333.1, as it applies to Social Security benefits, is in conflict with that requirement and is thereby rendered invalid by the supremacy clause of the United States Constitution.

A.

The fallacy of the majority opinion lies in its distinction between Social Security benefits and Social Security entitlements. The majority read the collateral source provisions of Civil Code section 3333.1, subdivision (a), to apply only where Social Security “benefits” are in the form of money paid directly to the recipient.

To reach this result, the majority opinion severs out for distinct treatment the last clause of section 3333.1, subdivision (a), which applies to medical service contracts providing inter alia for services. The opinion says (ante, p. 337): “Defendants urge that the direct payment to health care providers under Medi-Cal is of no significance as private health care plans such as Blue Cross, Blue Shield, and the Foundation Health Plan of Sacramento also pay directly according to an agreed upon schedule. This facile argument ignores that such private plans are spe*344cifically identified in the second contract providers clause of subdivision (a) of section 3333.1.”

The difficulty with the majority’s rendering of section 3333.1 is that the term “benefits,” which bears the entire weight of the argument,, can only be read in context as inclusive both of direct payments and contracted-for medical services.

A simple parsing (by clause) of section 3333.1, subdivision (a), demonstrates the point. It says: “In the event the defendant so elects, in an action for personal injury against a health care provider based upon professional negligence, he may introduce evidence of any amount payable as a benefit to the plaintiff as a result of the personal injury pursuant to [A] the United States Social Security Act, [B] any state or federal income disability or worker’s compensation act, [C] any health, sickness or income-disability insurance, accident insurance that provides health benefits or income-disability coverage, [D] and any contract or agreement of any group, organization, partnership, or corporation to provide, pay for, or reimburse the cost of medical, hospital, dental, or other health care services....” (Italics added.)

It can readily be seen that the term benefit is inclusive, not only of Social Security act “benefits,” but also of disability, insurance and contract “benefits.” Section 3333.1 is expressly applicable to “any amount payable as a benefit to the plaintiff as a result of the personal injury pursuant to [both] the United States Social Security Act . .. and any contract ... to provide, pay for, or reimburse the cost of medical . . . services. ...” (Italics added.) The use of the phrase “any amount payable as a benefit” does not limit the term “benefits” to direct payments to the. recipient but is expressive of the fact that medical services bear a cost which must be paid.

The majority opinion draws sustenance from the legislative history of the act from which it extracts a distinction between social security entitlements and social security benefits. It says (ante, p. 338): “[W]hen the Legislature took the language of Assembly Bill No. 1 (proposed Health & Saf. Code, § 21154.5) and transferred it to section 3333.1, a significant change was made in the prefatory language. The original draft provided for reduction in damages ‘by any benefits to which the patient is entitled by reason of the loss.’ (Italics added.) In section 3333.1, the Social Security benefits referred to are only those payable as a benefit *345to the medical malpractice plaintiff. If the Legislature had intended to include all forms of Social Security benefits to which the patient was entitled, irrespective of the person or persons to whom those benefits were payable, it would have retained the language in the original form. It did not. It substituted language stating directly that only those social benefits payable (directly) to the plaintiff were within the ambit of the act. Social Security programs, except for those contained in titles XVIII and XIX pay benefits directly to the recipient. The change in the prefatory language of the statute rendered superfluous the specific exemption of titles XVIII and XIX.”

A full reading of the legislative changes belies this reading. As amended in Assembly on June 2, 1975, the provisions at issue were embodied in proposed Health and Safety Code section 21154.5.1 It said that upon the election of a health care provider, the compensation award “shall be reduced by any benefits to which the patient ... is entitled by reason of the law, including benefits payable under the federal Social Security Act, except Titles XVIII and XIX thereof.. . .. ” and certain workers’ compensation and insurance benefits. (Italics added.)

Plainly, “benefits” are things of entitlement, not a separate species, and are inclusive of other than Social Security benefits. The term “entitled” bears no meaning peculiar to the Social Security laws and has no life independent of benefits. It is simply the predicate term for the receipt of benefits of various kinds.

The relevance of these meanings becomes apparent when the Assembly amendments to Assembly Bill No. 1 of June 6, 1975, are examined. On that day, proposed Health and Safety Code section 21154.5 became *346Civil Code section 3333.1, subdivision (b),2 the forerunner of the present section. The latter section provided that malpractice damages “shall be offset by any amount payable as a benefit to the plaintiff as a result of personal injury under the United States Social Security Act....” (Italics added.)

The change in sections replaced the phrase “any benefits to which the patient is entitled” with “any amount payable as a benefit” as the predicate class within which are the enumerated kinds of benefits, inclusive of benefits secured both directly as cash and indirectly as services.

Section 3333.1 clearly applies to medical services provided under the Social Security Act.

However, section 3333.1 impermissibly trenches upon provisions of the Social Security Act having precedence by virtue of the supremacy clause of the United States Constitution. As the majority opinion emphasizes (ante, p. 341), “[t]he Social Security Act itself requires participating states in the Medicaid program to seek reimbursement for Medicaid payments from third party tortfeasors. 42 United States Code section 1396a(a)(25) provides: ‘(25) provide (A) that the State or local agency administering such plan will take all reasonable measures to ascertain the legal liability of third parties to pay for care and service (available under the plan) arising out of injury, disease, or disability, (B) that where the State or local agency knows that the third party has such a legal liability such agency will treat such legal liability as a resource of the individual on whose behalf the care and services are made available for purposes of paragraph (17)(B), and (C) that in any case where such a legal liability is found to exist after medical assistance has been made available on behalf of the individual, the State or local *347agency will seek reimbursement for such assistance to the extent of such legal liability. ...’ (See also 45 C.F.R. § 250.31(a).) (Italics added.)”

Plainly, no reimbursement can be successfully sought where, by reason of section 3333.1, subdivision (b), “[n]o source of collateral benefits introduced pursuant to subdivision (a) shall recover any amount against the plaintiff nor shall it be subrogated to the rights of the plaintiff against a defendant.” “State action must give way to federal legislation where a valid ‘act of Congress fairly interpreted is in actual conflict with the law of the State.’” (Fn. omitted.) (Tribe, American Constitutional Law, p. 377, and cases cited therein.)

By this perhaps labored alternate route, I réach concurrence in the result of the majority opinion.

The petition of respondent Michelson for a hearing by the Supreme Court was denied May 27, 1982. Richardson, J., did not participate therein. Racanelli, J.,* participated therein. Bird, C. J., and Mosk, J., were of the opinion that the petition should be granted.

Proposed Health and Safety Code section 21154.5 provided: “In the event the health care provider so elects, compensation awarded pursuant to this chapter shall be reduced by any benefits to which the patient or his survivor is entitled by reason of the loss, including benefits payable under the federal Social Security Act, except Titles XVIII and XIX thereof, benefits payable pursuant to Division 4 (commencing with Section 3201) of the Labor Code, and insurance benefits, other than the proceeds of life insurance. In determining the amount of such insurance benefits for purposes of this section, insurance premiums paid during the 18 months immediately preceding the injury by or on behalf of the insured to secure the insurance benefits shall be deducted from the total of such benefits which the claimant has received or to which he is entitled. Where the health care provider elects to reduce benefits as provided in this section, the claimant may introduce evidence of insurance coverage of the health care provider against which damages may be assessed in the action and also evidence of previous settlement negotiations.”

“(b) Any damages awarded to a plaintiff in an action for personal injury against a provider of health care services shall be offset by. any amount payable as a benefit to the plaintiff as a result of the personal injury under the United States Social Security Act, any state or federal income disability or workmen’s compensation act, any accident, health, sickness, or disability insurance, and any contract or agreement of any group, organization, partnership, or corporation to provide or to pay for or reimburse the cost-of medical, hospital, dental or other health care services. The amount which is offset from the judgment shall be reduced by (1) any amount which the plaintiff has paid or contributed during the calendar year in which his right to benefits arose for any program, plan or policy under which benefits are payable and (2) if the program, plan, or policy was provided to the plaintiff by his employer as an employee benefit, an amount equal to any reasonable cost which would have been incurred by the plaintiff during the calendar year in which his right to benefits arose if he had personally paid for the program, plan, or policy.”

Assigned by the Chairperson of the Judicial Council.