The Court of Appeals of Texas, Houston recently held that a defendant is entitled to discovery of the insurance contracts between the insurer and the plaintiff's healthcare provider to aid in determining whether the providers are required to accept payments of less than the amounts billed.
In In re Jarvis, the plaintiff alleged that a dog owned by defendant bit her right hand causing her to have surgery. Seven months later plaintiff had another surgery performed. The defendant alleged that the amount billed for medical treatment for the post-accident medical treatment was in excess of the amounts actually paid or incurred.
Paid v. Incurred:
The Texas Supreme Court has clarified what actually paid or incurred means in Haygood v. De Escabedo. Section 41.0105 of the Texas Civil Practice & Remedies Code limits recovery, and the evidence at trial, to medical expenses that the provider has a legal right to be paid. The Court came to the conclusion that "'actually paid and incurred' means expenses that have been or will be paid, and excludes the difference between such amount and charges the service provider bills but has no right to be paid." The Court also ruled that the collateral source rule does not allow a plaintiff to recover as damages the amount of medical bills a provider is not entitled to charge.
Collateral Source Rule:
The court in In re Jarvis agreed with the Haygood decision that the collateral source rule is to prevent a windfall to the defendant when the plaintiff's costs are paid by a third party for the benefit of the plaintiff. The court found that the defendant was entitled to discovery of the insurance contracts to aid in determining whether the providers are required to accept payments of less than the amounts billed.
When dealing with insurance companies and healthcare providers, defendants should request health insurance contracts during discovery to determine whether the providers are required to accept payments amounts that are less than the bill. A defendant will need these documents to determine whether the amount billed for was in excess of what was actually paid or incurred. These documents are relevant to the defendant's case and, thus, can be obtained in a reasonably tailored discovery request.