Texas Paid Versus Incurred—what is the proper measure of injury damages?

I was seriously injured in a car accident, but my insurance paid most of my medical bills; can I still bring a claim against the at-fault driver, and how much could I collect?

If a person is seriously injured due to the negligence of another, and their insurer pays any part of their medical bills, they can still make a claim for damages with the at-fault party’s insurer.  The question is, will the measure of their damages be the amount that they would have been charged for the treatments they received, how much their insurance company (typically 60% of the retail cost of the services), or just how much they paid, as in co-pays?

Texas has something called the “collateral source rule,” which basically means that a wrongdoer should not benefit from the fact that you have insurance, or that a doctor may give an insurer a discount rate in exchange for being listed as a preferred provider.  However, Texas “tort reformers” have also claimed that a person should not be able to collect for medical expenses that were never actually paid by an injured party’s insurance company.  Tort reform has had significant success in the Texas Legislature, and in 2003, the Texas Legislature passed a law that “recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.”

While some defendants have claimed that the Legislature’s intent was to eliminate the collateral source rule altogether, this is belied by the fact that a provision of law doing exactly that was removed from the bill that eventually passed in the form quote above.  However, it is clear that the Legislature did intend to limit recovery in some way, as evidenced by the text quoted.  Right now, the courts are often in confusion in how to apply this law, and do so in varied ways:

Some courts still follow the old collateral course law, and don’t allow any evidence of insurance discounts.  Others take the other extreme, and don’t allow evidence of incurred costs above what an insured and insurer actually paid to the health care provider.  Other courts have taken intermediate approaches, including allowing the jury to see both, or allowing only the jury to see the amounts incurred, but then letting a judge reduce any jury verdict based on evidence on what was actually paid by the insurer and insured.

Finally, keep an eye toward further amendments to this area of law are likely in the upcoming legislative of 2009.

This can certainly be a very confusing area of the law when you are trying to figure out what amount an at-fault party’s insurance company should be willing to pay in a settlement, and depends greatly on the county or particular court in which your case is likely to be heard.  Evaluating such an issue requires the assistance of an experienced Texas personal injury lawyer.