Texas Supreme Court Set to Decide the Meaning of “Paid or Incurred” Medical Expenses

Today, the Supremes will hear oral argument in an important case which will chart the future course of a 2003 tort reform measure that limits the recovery of medical expenses to those expenses actually paid or incurred by or on behalf of the injured party. The issue is whether Civil Practices and Remedies Code section 41.0105 annuls the collateral-source rule, either as an evidentiary rule or a damages rule, when an injured person’s initial full charge medical expenses exceed those “actually paid or incurred” by or on behalf of an injured party. In this case, the defendant objected when the Plaintiff introduced evidence of full-charge medical bills that, of course, Medicare did not pay. Those full-charge bills differed from the reduced Medicare-paid bills by about $95,000. The trial court overruled the defendant’s objection, and allowed into evidence the full-charge medical bills. The court of appeals reversed, holding that section 41.0105 restricts not only recoverable damages but also relevant evidence to prove damages. The Supremes granted the petition for review, and are widely expected to affirm the court of appeals decision, making it the law of the land. If we are not right about this iron clad prediction, sue us. Haygood v Escabedo