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January 14, 2018 by PILLI Law

Why does my attorney keep referring to my medical bills as paid or incurred amount?

     Every so often, the legislature takes a look at the tort law and decides it wants to make changes to it. Such is the case when it comes to your medical bills recovery in personal injury case. One afternoon back in 2002, the legislature decided that beginning September 1, 2003, Plaintiffs are only entitled to recover medical expenses that were paid or incurred. They passed what is known as Texas Civil Practices and Remedies Code §41.0105 which made this official. To streamline the paid or incurred process, the legislature even decided to prepare form affidavits to submit to medical providers. They codified the affidavits for ease of access.

    

     While the statute itself was clear, it was often subject to inconsistent or conflicting applications. Plaintiffs, by way of their lawyers, urged courts to allow juries to receive the total amount of medical expenses. The argument often presented was to show the juries the effect and seriousness of the injuries by way of medical expenses incurred. The Supreme Court of Texas in Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011) effectively ruled on this and the overall subject of paid or incurred to clarify any conflicting and inconsistent applications by Plaintiff’s attorneys. So what is left behind after De Escabedo?

     The Court in De Escabedo ruled that the plaintiff was allowed to recover only yhe expenses the healthcare provider had a legal right to be paid. This means, anything that is written off by the medical provider is not admissible to the jury for recovery. The amount that the patient paid for is recoverable under the rules. The amount that the health insurance company paid is recoverable. The amount that is still outstanding is still recoverable by the plaintiff. Plaintiff’s attorneys, like a lawyer Arlington TX relies on, typically form a chart, as below, to help them get organized.

ProviderAmount IncurredPatient PaidInsurance PaidOutstanding Amount

The questions that are still outstanding that need a clear answer by the Supreme Court are as follows: What happens when a charity pays for part or all of the medical expenses? What happens when the medical companies sell their accounts to other companies but show the full amount charged on the affidavits? What happens when there is a letter of protection involved and the medical bills are reduced after the jury verdict or settlement has been effectuated?

The effect of this paid or incurred method implemented by the legislature is that many plaintiffs chose not to seek treatment through private healthcare plans because the recovery is heavily limited. Instead they chose to treat under letters of protection to maintain higher medical bills and be able to get some recovery in the lawsuit.

In conclusion, although paid or incurred is pretty stratight forward concept, with the help of the Supreme Court of Texas in De Escabdeo, it has posed a lot of issues for injured claimants and their attorneys. It has certainly limited recovery, and added several hoops to try and get there.

 

Thanks to our friends and contributors from Brandy Austin Law Firm, PLLC for their insight into medical bills and personal injury practice.

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