Paid Vs. Incurred Medical Bills – New Cases

If you are injured in a Dallas-Fort Worth motor vehicle accident and your health insurance carrier pays for some of your medical bills, the at-fault driver gets credit for your premium payments, thanks to a draconian decision from the Texas Supreme Court.

Section 41.0105 of the Texas Civil Practices and Remedies Code, which was written by
state politicians in 2003 to severely limit personal injury awards, states: “In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.” But due to the confusing “paid or incurred” choice, noone knew which one was the correct measure of damages.

That changed on July 1, 2011 when the Supreme Court issued its long awaited (and feared by plaintiff’s lawyers like me) ruling in Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011). In that case, Haygood had sued Escabedo for injuries he sustained when his car was hit by Escabedo’s minivan and he was seriously injured. His medical care providers billed him $110,069.12, but because of Medicare adjustments, they adjusted their bills with credits of $82,329.69, leaving a total of $27,739.43. At his trial, Haygood presented evidence of medical expenses of $110,069.12, which the jury awarded. The Court of Appeals reversed the judgment and Haygood appealed.

The Supreme Court ruled that Section 41.0105 limits a Plaintiff’s medical expenses recovery to those expenses that have been paid by his health insurance or other sources — not incurred — or that were not paid and must be paid by him.

But many procedural issues were not addressed and the confusion regarding how to construe the decision continued. For example, the Waco Court of Appeals just released a decision where a tree trimming company, Big Bird, hired a man named Gallegos, who was building an addition to the company’s buidling when his ladder broke. He was first given emergency services at Methodist Hospital and Parkland Hospital, the public hospital serving Dallas County. Gallegos required multiple surgeries and had to have 15 screws nailed into his foot. He could not return to work for one year and still cannot work a full day.

Gallegos sued Big Bird, alleging its negligence caused his injuries, medical bills of approximately $84,000.00 from the two hospitals, loss of earning capacity and pain and suffering, which the jury awarded.

Big Bird appealed, contending that the trial court erroneously awarded medical expenses that were not “actually incurred” because Gallegos received those services free of charge pursuant to a charity program. The custodian of records for one hosptal had testified that it had a “charity contract” for indigent patients, but if it later discovered the patient was able to pay, the patient owed the money.

The Waco court examined the long-standing collateral source rule, which precludes any reduction in a tortfeasor’s liability because of benefits received by the plaintiff from someone else, and in a surprising ruling, affirmed the trial court’s decision. No doubt this decision will be thrown out by the Texas Supreme Court on appeal.

Please contact my office if you need any help resolving your auto or truck collision case. That’s what we do. And we’re good at it!

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