When you have been involved in a personal injury accident due to the negligence of another person or entity, you are entitled to file against that driver or entity for damages suffered in the accident. This compensation is meant to compensate you for the full extent of your losses as a direct result of the other driver’s negligence. In Texas, however, according to the Texas CPRC Sec. 41.0105, claimants are only allowed to recover what is “paid or incurred.” 

Paid or incurred damages refers to the amount already paid by you, your health insurance, or bills that remain due from medical treatment received because of the accident (such as outstanding medical bills that your health insurance did not cover). The flaw with this statute and case law is that it ignores the often astronomical hospital bills sent to you after you receive treatment from the car accident. The hospital bills may be enormous, but Texas law does not allow you to present that actual billed amount to the jury. And because hospitals and insurance companies have pre-negotiated contracts, the insurance company pays a reduced amount. And it is this reduced amount that you are allowed to show to a jury—not your actual bill.

To help you understand the difference between paid and incurred damages, how this affects your personal injury case, and what amounts you are entitled to after your accident, the knowledgeable attorneys at the Law Office of Shane McClelland, PLLC have put together this guide to help you understand this complex issue concerning medical damages. 

Understanding Paid or Incurred Medical Damages

Paid damages refer to the amount actually paid for your medical bills. In most cases, that amount is a significantly reduced hospital bill you or your insurance company paid. Incurred damages are those amounts of money that remain outstanding or unpaid. Because of this law, Texans can only recover the amount paid or incurred from their accident—not the amount hospitals or medical providers actually bill. The result is that Texans cannot recover the significant difference between a hospital’s billed rate for services and the discounted rate an insurance company pays to medical providers. Not only that, but a hospital may charge its full rate if a patient lacks health insurance instead of a discounted rate if private insurance coverage is involved​—for the same injuries and same services provided.

While paid medical expenses reflect the actual costs already settled for medical treatment, incurred medical expenses cover a wider range of costs. Incurred medical expenses include:Paid Expenses: As previously mentioned, paid medical expenses form a subset of the total incurred medical expenses.

To add insult to injury, because of something called subrogation (or perhaps a lien), your health insurance company is permitted to recover some of the money you receive in your car accident case. This means that not only does the insurance company get an incredible discount for what it pays for your medical treatment, but it also gets repaid for that amount. And different insurance companies have different agreements with different medical providers or governmental insurance providers. This can have significant negative affects on your personal injury recovery, and it is unjust. For example, two people with the exact same injuries go to the exact same hospital and receive the exact same treatment. But one of those people may only be able to present significantly less amount in medical payments to the jury because their insurance company has a “better deal” with the medical provider. And insurance companies try to use this fact against you in your personal injury case. In other words, they will try to offer less money to the injured person whose insurance company had a better deal with the medical provider and paid less money than the person whose insurance company paid more. Not only that, but it is important to point out and remember that it is fundamentally unjust that insurance companies measure someone’s pain and suffering based on the medical bills that were paid or incurred. The reverse logic is that, in the eyes of the insurance company settling your case, having bad health insurance may increase your settlement amount. At a base level, however, the way insurance companies determine the value of an injured person’s pain and suffering only based on the amount of money that was “paid or incurred” is flawed and unjust.

That is why hiring a lawyer is instrumental in navigating the complexities of your recoverable damages, including what is paid or incurred, in personal injury cases, and helping you to maximize your recovery based on your true pain and suffering damages. Our team is prepared to challenge the restrictive interpretations of this law, aiming for a more comprehensive and fair compensation for our client’s injuries and associated costs.

How an Attorney Can Help Your Unique Case

An attorney can help you navigate the aftermath of your claim and fight for the recovery you deserve, regardless of what has already been paid. While you rest and focus on your recovery, Shane McClelland will begin an immediate investigation into the facts and damages in your personal injury case.

From here, we will handle the filing of your lawsuit. We handle all aspects of the litigation process, including scheduling, negotiating, and all communications—again, so you can focus on your recovery. We understand how pivotal compensation can be for victims of a personal injury accident, which is why we fight so hard for you to recover the full amount of compensation you deserve. 

Injured in a Personal Injury Accident? Our Team Can Help Today

When it comes to recovering your damages from an accident cause by someone else’s negligence, having a skilled and committed attorney will greatly enhance your chances at getting the recovery you deserve. With extensive knowledge of Texas law, we are here to help advocate for you to recover the compensation you deserve after your accident.

Please do not hesitate. If you have been injured in an accident that someone else’s negligence caused, then reach out to us immediately so we can help start the process of getting you fair compensation for your injuries. For more details, schedule a free consultation by calling our office at (713) 987-7107 or by utilizing our online contact form.