41.0105 Debate Resolved -- Hooray!

In prior posts, Byron Henry and I have opined on a split among the intermediate courts of appeals regarding whether 41.0105 of the Texas Civil Practice and Remedies Code abrogates the collateral source rule and whether evidence of medically expenses initially incurred but ultimately written off should be excluded from evidence at trial or applied post-verdict by the trial court.  The Texas Supreme Court resolved both issues today in an opinion affirming the Tyler court of appeals' judgment in Haygood v. Garza

The main take-away is that amounts written-off by providers must be excluded from evidence at trial.  In other words, the jury should only see evidence of medical expenses actually and ultimately charged to the claimant, not bills showing initial charges before required write-offs.  The majority opinion may be found here.  Justice Lehrmann's dissent, in which Justice Medina joined, may be found here.

 Additional take-aways you need to know before your next trial, however, are below:

  • A plaintiff is not entitled to recover medical expenses that have been written off by the insurance provider, Medicare, or the like.  Such expenses are not collateral benefits protected by the collateral source rule.  "[T]he common-law collateral source rules does not allow recovery as damages of medical expenses a health care provider is not entitled to charge." (Slip Op. at 9).
  • A claimant's recovery is limited to medical expenses "which have been or must be paid by or for the claimant."  Allowing a claimant to recover medical expenses written off provides claimant an impermissible windfall. (Slip Op. at 10-12).
  • Charges a claimant is not allowed to recover (i.e., expenses written-off or otherwise forgiven) is irrelevant to the issue of damages and inadmissible at trial.  (Slip Op. at  13-14).  "[O]nly evidence of recoverable medical expenses is admissible at trial." (Slip Op. at 16).
  • Cases holding that such evidence is admissible are no longer good law. (Slip Op. at 16, n. 64). 
  • It remains improper to tell the jury that (a) medical expense will be paid in whole or part by insurance, or (b) a provider adjusted its charges because of insurance.

 

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