A Glimpse Into Audish v. Macias: Moving Toward Value
by RACHEL E. LUSTIG
The Era of Sticker-Price Medicine
For years, the valuation of medical damages in personal injury cases has been distorted by what can be described as “sticker-price” medicine. Plaintiffs’ experts routinely present “billed” figures that bear little resemblance to what a patient, insurer, or government program actually pays. These inflated numbers have shaped verdicts, settlements, and even policy discussions in ways that defy economic reality.
The California Court of Appeal’s recent decision in Audish v. Macias (2024) 102 Cal.App.5th 740 represents a meaningful step toward changing this reality. In affirming the admissibility of evidence regarding Medicare rates to establish the “reasonable value” of future medical care, the court moved California jurisprudence further toward realism and away from the illusion of full-billed medical damages.
The Case Behind the Shift
Audish v. Macias arose from an automobile accident in San Diego County. The plaintiff, David Audish, and the defendant, David Macias, were each found 50% responsible for the collision. The jury awarded $65,699.50 in total damages, $29,288.94 in past medical expenses, $3,620 in past non-economic losses, and $32,790.56 in future medical expenses.
Before trial, the plaintiff filed a motion in limine to preclude any mention of his medical insurance or potential future coverage. The trial court granted the motion in part and denied it in part, ruling that a properly qualified expert could testify regarding the reasonable value of medical care based on the rates insurers actually pay.
At trial, the plaintiff’s life care planner testified that his future medical costs would total over $1.4 million. However, on cross-examination, she admitted that her estimates reflected what providers charge patients, not what they accept as payment, and that she did not account for what Medicare would pay for the same services. After an unfavorable verdict, the plaintiff moved for a new trial, arguing that the court had violated the collateral source rule by allowing testimony concerning his eligibility for Medicare and by permitting the jury to consider what Medicare would pay for future care. The Court of Appeal disagreed.
Real Value, Not Charged Value
The Court of Appeal’s decision in Audish reaffirmed the principle first articulated in Howell v. Hamilton Meats & Provisions, Inc. (2011) 52 Cal.4th 541 and later refined in Corenbaum v. Lampkin (2013) 215 Cal. App.4th 1308: the full amount billed by medical providers does not reflect the reasonable value of the services rendered. The Audish court concluded that evidence of a plaintiff ’s future eligibility for Medicare and the anticipated amounts Medicare would pay is relevant to the determination of reasonable value. It held that the collateral source rule does not preclude such testimony, as long as the evidence is offered to establish reasonable value, not to show that a third party will actually cover the costs.
In essence, the Court drew a clear distinction between evidence of payment sources (which remains inadmissible to reduce damages under the collateral source rule) and evidence of market rates (which is admissible to determine the reasonable value of care). Medicare rates, the Court reasoned, are not a collateral source in themselves, rather they are evidence of the economic reality of what providers accept in payment for medical services.
Why Audish Matters
The practical impact of Audish is significant, providing defense counsel stronger footing to challenge inflated life care plans and future medical cost projections founded upon billed rates. More importantly, it moves the law toward economic honesty, an acknowledgment that medical billing operates within a dual landscape: the billed price and the paid price.
Every defense attorney has encountered the disconnect between the two. A procedure “costs” $100,000 according to a plaintiff’s expert, yet the provider regularly accepts $25,000 from Medicare or a private insurer as full payment. For years, plaintiffs have used the higher “sticker price” to anchor damages, while defendants have been restricted from exposing the fiction.
Audish loosens that restriction. By allowing testimony grounded in actual reimbursement data, including Medicare rates, the court encourages juries to base awards on what medical care truly costs in the real world. That is not only fair, it is rational.
The Medicare Dimension: Who Should Pay?
Audish opens the door to a more nuanced policy debate, one that extends beyond evidentiary rules and into questions of fiscal responsibility and fairness. Under the Medicare Secondary Payer Act, Medicare is a secondary payer when payment has been made, or can reasonably be expected to be made, under an automobile, liability, or workers’ compensation policy. In other words, Medicare is not required to pay for medical treatment if a third party is responsible for the injury. The logic behind this framework is intuitive: taxpayer-funded programs should not subsidize the cost of tort damages. The tortfeasor is supposed to pay first.
This creates an interesting paradox in light of Audish. The case allows Medicare’s reimbursement rates to serve as evidence of reasonable value, but Medicare itself would not actually pay those rates unless and until the plaintiff exhausts their recovery from the defendant. So the question becomes: if Medicare is only a hypothetical payer in this context, why should its reimbursement rate define the market value of care?
This tension was highlighted in an article by Greyson M. Goody in The Advocate, which questioned whether using Medicare rates as the measure of reasonable value aligns with the policy behind the Secondary Payer and False Claims Acts. Goody observed that if Medicare is not obligated to pay for treatment arising from a third-party injury, then using its rates to calculate damages arguably lets the tortfeasor and by extension, their insurer, benefit from a public subsidy. In other words, while Audish promotes realism, it may also blur the line between valuing damages and allocating payment responsibility.
From a defense standpoint , the counterpoint is that using Medicare rates is not about shifting the burden to taxpayers, rather it’s about measuring what medical care is actually worth in the current market. Whether a private insurer, the plaintiff, or the defendant ultimately pays, the underlying economic value remains the same. The broader principle is that the reasonable value of medical services should reflect what providers accept and not what they list on a billing statement. The Secondary Payer Act defines who pays first; Audish helps define how much is owed and equips defense counsel with the legal and evidentiary foundation to bring realism back into damages discussions.
The Tension in Value
At the heart of this debate lies the question of what represents “reasonable value.” Plaintiffs’ counsel often argue that Medicare rates are artificially low and do not reflect the true cost of care. They contend that damages should be based on what it would cost the plaintiff to obtain care without the benefit of public or private insurance. Defense counsel counter that such reasoning invites speculation and windfall.
The reality is that individuals, private insurers, and Medicare do not pay full billed charges. The billed amount acts as an accounting construct rather than a measure of value.
Audish implicitly sides with realism. It acknowledges that in an era where healthcare pricing is driven by negotiated rates and government reimbursement schedules, any valuation divorced from
those benchmarks is a fiction.
The Big Picture
Beyond its immediate application, Audish reflects a broader cultural shift. In healthcare, “value-based care” has become the mantra, encompassing reimbursement tied to outcomes, not volume. In litigation, a similar transformation is underway reflecting compensation tied to reality, not illusion.
The decision aligns the law with how medicine operates. Providers routinely accept drastically reduced payments from insurers and public payers, recognizing those rates as the true economic value of their services. It is both inconsistent and inequitable to allow plaintiffs in tort actions to recover multiples of those same values simply because of the billing fiction. By grounding damages in what is actually paid, Audish restores proportionality to the civil justice system and mitigates the systemic inflation of verdicts driven by unrealistic medical cost modeling.
Conclusion
In the end, Audish v. Macias offers more than a procedural clarification, it signals a philosophical shift toward realism in personal injury valuation. It rejects the notion that the “sticker price” of medical care should define damages and embraces a model rooted in the economic realities of modern healthcare. It also forces the legal community to wrestle with complex questions about public versus private responsibility and the proper role of programs like Medicare in shaping damage calculations.
The decision challenges both sides of the bar to think critically about what “reasonable value” really means and who should bear it. For defense practitioners, the takeaway is clear: Audish brings long-overdue realism to the courtroom. It affirms that fairness in damages begins with honesty in numbers. In a system increasingly focused on value, that honesty is worth more than any inflated bill could ever claim.
Rachel E. Lustig is a Civil Litigation Defense Attorney at Yoka & Smith, LLP, and can be reached at rlustig@yokasmith.com.
This article first appeared in ASCDC Verdict (2025, Volume 2), p.21. The views expressed herein are those of the author. All legal and other issues must be independently researched.
