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Paid vs. Incurred Medical Bills: Haygood and Beyond

On Behalf of | Dec 31, 2012 | Firm News

In July 2011, the Texas Supreme Court in Haygood v. De Escabedo held medical expenses, and the admissibility of evidence of medical expenses, are limited by statute to the amounts actually paid or incurred by the claimant. Unfortunately, the opinion offers very little guidance on the affects of trial practice. 

This has led to Texas appellate courts issuing opinions on different scenarios that arise at trial. Escabedo had an unintended consequence on a tried and true measure of proving up the necessity and cost of the Plaintiff’s medical bills.

For years, Plaintiff attorneys used CPRC §18.001 affidavits to prove up necessity and cost of their client’s medical bills. (The actual approved form affidavit is found in CPRC §18.002.) However, CPRC §18.001 affidavits do not account for a scenario where the Plaintiff’s medical bills are “adjusted” by an insurer. The Escabedo decision ruled that those “written-off” bills cannot come into evidence. Therefore, the affidavits are inadequate to prove up the “non-adjusted” medical bills under Escabedo.

Because the affidavit and its prove-up questions do not account for the Escabedo decision, a prudent defense would be to file a Motion to Strike the affidavit. Alert Plaintiff attorneys may try to supplement the affidavit with additional questions to “solve” the Escabedo problem, but this practice is risky as there is no approved way to do this.

Recently four appellate decisions have made holdings on Escabedo’s effect on trial practice:

Big Bird Tree v. Gallegos, 365 S.W.3d 173 (Tex. App.-Dallas 2012, no pet. h.).

This Court held that Escabedo is not applicable to healthcare charity programs when the hospital still expected to be paid if the Plaintiff makes a recovery at trial.

– Henderson v. Spann, 367 S.W.3d 301 (Tex. App.-Amarillo 2012, pet. denied).

This court held that admission of inadmissible pre-adjusted medical bills during the judgment phase of a trial is reversible error. Under Escabedo, it is reversible error to admit unadjusted medical bills into evidence because it is irrelevant and inadmissible under Escabedo.

– Cavazos v. Pay & Save, Inc., 357 S.W.3d 86 (Tex. App.-Amarillo 2011, no pet. h.).

This Court held that a reduction of the Plaintiff’s percentage of fault comes after the calculation of what was paid vs. what was incurred.

– Prabhakar v. Fritzgerald, No. 05-10-00126-CV, 2012 LEXIS 7154 (Tex. App.-Dallas, Aug. 24, 2012).

The Dallas Court of Appeals held that a signed Rule 11 Agreement, which sets out the written-off amount of the medical bills, is sufficient information for a trial court to reduce the amount of past medical expenses.

These four appellate opinions have come within thirteen months since Escebado. Yet, trial attorneys still have very little guidance on how to account for Escebado’s effect on getting the Plaintiff’s medical bills into evidence.

Until the Texas legislature or the Texas Supreme Court gives additional guidance on Escabedo’s impact on trial practice, it appears that the safest way to prevent unnecessary surprise, cost, and delay at trial is if the attorneys can stipulate the Plaintiff’s paid versus incurred medical bills before trial.

Michael J. Noordsy is a Partner at The Bassett Firm. Mr. Noordsy’s practice focuses on Transportation Litigation, Product Liability, Personal Injury, Premises Liability, Business Litigation, and Criminal Defense. He received his B.A. from University of Texas at Austin in 1990 and his J.D. from California Western School of Law in 1993.


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