On July 1, 2011, the Texas Supreme Court finally settled the oft-debated issue of whether a jury should consider the amount of medical damages incurred by a plaintiff who has health insurance that reduces the amounts charged for the medical services.  Haygood sued Escobedo for damages, including medical expenses, following an automobile accident.  At trial Escobedo moved to limit the evidence to the amount of medical expenses actually billed rather than the amount charged, a difference of $95,000. This amount represented the discount that Haygood’s health insurer had negotiated with the hospital for the services performed. The trial court allowed evidence of the amount charged. The Tyler court of appeals held that Civil Practice & Remedies Code section 41.0105 restricts not only recoverable damages but also relevant evidence to prove damages. In affirming the Supreme Court held that section 41.0105 limits a claimant’s medical-expenses recovery to those expenses that have been or must be paid by or for the claimant and limits evidence only to recoverable medical expenses. Since a claimant is not entitled to recover medical charges that a medical provider is not entitled to be paid (usually due to health insurance discounts), evidence of such charges is irrelevant to the issue of damages.  This long awaited holding will change how many trial courts handle evidence of medical expenses and should greatly reduce claimants’ recoveries since claimants’ attorneys and juries often look to the medical expenses in valuing damages.

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