For as long as anyone who is alive today can remember an accident victim in Texas has had a right to recover the reasonable amount of their accident related medical expenses. Then in 2003 the insurance lobby, the so-called Texans for Lawsuit Reform, sought to limit victims to recovering only their deductibles, co-pays, and other out of pocket expenses. The health insurance lobby fought back, fearing that the victims would not recover enough medical damages to repay the health insurance company. The outcome was Texas Civil Practices and Remedies Code section 41.0105 which limits an injured Texan to recovering the amount “actually paid or incurred.” Under normal rules of construction “paid or incurred” would simply mean that the victims could choose between the alternative measures of damages.
This was not what the insurance lobby, the Texans for Lawsuit Reform(TLR), had in mind and they launched a vigorous campaign to have the statute interpreted and applied in a way which limited accident victims to recovering only the amount of the medical expenses that had been paid by health insurance or the amounts actually paid out of pocket by the victims. Furthermore, the alternative language in the statute gave rise to a quagmire of unanswered legal and procedural questions. In 2005 the Texas legislature voted almost unanimously to repeal the problematic statute but Governor Rick Perry, pursuant to instructions from TLR, vetoed the repeal. The political wrangling regarding this issue continues.
Texas courts continue to struggle with how to apply the “paid or incurred” standard. The prevailing practice is to apply traditional rules of evidence and submit all of the victim’s medical bills to the jury and after the verdict to reduce the amount of the medical expenses awarded by the jury to the amount paid by health insurance, out of pocket, etc. This method of applying the paid or incurred statute post verdict has been approved by most of the Texas appellate courts that have written on the issue. However, the Twelfth Court of Appeals that covers Tyler and the surrounding seventeen county area has ruled in the Escobedo case that only the “paid” amount of the medical bills should be submitted to the jury.
The net result of the paid or incurred confusion is that an injured East Texan might:
1. Submit and recover all of their accident related medical expenses;
2. Submit all of the accident related medical expenses but only recover the amounts paid by health insurance, out of pocket, etc; or,
3. Be limited to submitting and recovering only the “paid” amounts.
These uncertainties make evaluating medical expense damages extremely difficult by all sides and beg for sensible legislative reform.
For more information contact a Tyler Accident Lawyer today.