Medical Bill Write-offs Are Not Recoverable in Texas – Texas Supreme Court analyzes “paid or incurred” statute

Back in July 2011, the Supreme Court of Texas decided in Haygood v. de Escabedo that the “paid or incurred” statute in Texas limits a plaintiff’s recovery for medical expenses to only those sums actually paid or actually incurred. This ruling prevents plaintiffs from recovering (and even presenting evidence of) initial medical charges that are later written off or adjusted.

Because the effect of this ruling and the statute is to place limits on a plaintiff’s recovery for medical expenses, plaintiffs and their attorneys are looking for creative ways to avoid the effect of this statute. In a recent opinion by the Dallas court of appeals, a plaintiff was able to recover amounts that had been written off by the County hospital in connection with a charitable program by showing that the plaintiff had a continuing obligation to repay the hospital upon receipt of funds from a third-party for such medical expenses. Despite what seemed like a fairly definitive ruling by the Texas Supreme Court, defendants can continue to expect challenges to the application of the “paid or incurred” statute from plaintiffs.

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