TEXAS UPDATE!

By Chamberlain♦McHaney

Texas Lawyers

During her recent visit to the United States, Queen Elizabeth received a rare 22 gun salute when the Vice President joined the honor guard.

WHEN DOES ZERO MEAN ZERO?  When the Court says so, that’s when.  In a long awaited decision, the San Antonio Court of Appeals ruled today that a personal injury plaintiff cannot recover medical expenses from a third party tortfeasor when those expenses have been “written off” by the plaintiff’s healthcare providers.

At trial, the jury awarded plaintiff Kevin Fletcher a whopping $1,551 in past medical expenses.  On appeal, defendant Alicia Mills argued that pursuant to section 41.0105 of the Texas Civil Practices and Remedies Code, the amount of Fletcher’s award for past medical expenses should have been reduced because his medical providers accepted lesser amounts for their services from his health insurance company, thereby “writing off” the balance due from Fletcher.  In 1-1-1 decision, a razor thin “majority” of the three judge appellate panel agreed with defendant Mills and reversed the judgment of the trial court.

At issue was a tort reform statute passed by the Texas Legislature in 2003 that states: “recovery of medical or healthcare expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.”  This short statute has generated waves of satellite litigation and mounds of legal commentary.  Plaintiffs and defendants sharply disagree as to its true meaning.

Conjuring up images of Robert De Niro in the movie, “Meet the Parents,”  the “majority” of this court stated: “in construing the statute, we believe that ‘medical or healthcare expenses incurred’ refers to the ‘big circle’ of medical or healthcare expenses incurred at the time of the initial visit with the healthcare provider, while, as applied to the facts presented here, ‘actually incurred’ refers to the ‘smaller circle’ of expenses incurred after an adjustment of the healthcare provider’s bill.”  The court dissed the plaintiff’s constitutional objections while offering consolation by saying: “In the end, regardless of whether an injured plaintiff is covered by health insurance or whether some of his bills are written off because of contracts with health insurance carriers, the injured plaintiff will still be able to recover from the defendant the amount paid to his medical provider.”  After accounting for all the “write-offs” liberally claimed and taken by Fletcher’s health insurer, the balance owed by Fletcher to his medical provider was “$0.00.”  This appellate court then shrewdly deduced that “zero means zero—Fletcher no longer owes any money to his healthcare providers.”

The dissent would have none of that, observing that this case pits the “sweeping tort reform changes of HB4 against the long standing collateral source rule.”  This judge did not feel that the legislature intended for wrongdoing defendants to reap the benefits of a plaintiff’s wise decisions to purchase health insurance.  Instead, the phrase, expenses “actually incurred,” means all health care expenses incurred at the time of the visit, not the remaining balance after write-offs.  Mills v Fletcher, (Tex. App.-San Antonio, 2007).

Tx/Up Extra Special Exclusive Update:  The Texas Legislature is currently debating a bill which would repeal the “paid and incurred” statute in all cases except medical malpractices cases.

Our Lege has already passed a bill this session which allows (some critics say encourages) citizens to shoot to kill suspected home intruders without first ascertaining whether they are intruders.  Hey, this brings a whole new level of excitement and suspense to: “Honey, I’m home!”

We will recover all the new legislation and big cases this year at our upcoming, full day, fully accredited 12^th ANNUAL ULTIMATE CLAIMS HANDLING SEMINAR, October 5, 2007, CityPlace Conference Center, Dallas, Texas.  Mark your calendar and save the date.  After all, you do want to be in the circle.  Registration forms will be available in August.  

Chamberlain♦McHaney is an AV (Highest) rated firm and is listed in Best’s Directory of Recommended Attorneys