House Bill 1869 Creates Civil Practices And Remedies Code Section 140 Limiting Health Insurance Subrogation

Texas House Bill 1869 was passed by the Texas Legislature and signed into law by Governor Perry creating CPRC 140 which limits health insurance subrogation. After the Texas Supreme Court opinion in Fortis which effectively eliminated the Made Whole Doctrine health insurers were free to charge the usual exorbitant premiums, recover all their payments from tort victims, and keep the premiums.

Under CPRC 140 health insurers will still charge exorbitant premiums but will be limited to claiming only a portion of a tort victims recovery. For example, if an insured driver is injured in an auto accident and receives medical care for which the health insurance carrier pays $30,000 and the at-fault driver has a standard Texas minimum limits policy in the amount of $30,000 then in the past the carrier would try to claim the entire $30,000 and leave the injured insured with nothing for their injuries, lost wages and other damages. Under CPRC 140 the carrier is limited to a maximum “one-half of the covered individual’s gross recovery less attorney’s fees and procurement costs.” CPRC 140 produces a more equitable result.

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