Medical charges are critical to your case’s value. You may not only be reimbursed for what you paid but those charges are used to put a dollar figure on your pain and suffering recovery. Higher charges can potentially mean a bigger settlement or award. Insurance companies want to reduce them because they want to pay less. How these charges are interpreted may eventually be determined by a court.

Hospital charges vary depending on who’s paying them. There are different rates that insurance companies, Medicare, and Medicaid will pay. If you have none of these benefits and are paying out-of-pocket, you’re subject to the “chargemaster” rates which can be much higher and change frequently. 

Paid and Incurred Expenses May Be Recovered in an Insurance Claim or Lawsuit…

“Chargemaster” rates are not unlike airline charges. Depending on the day and time, a flight from Houston to Denver could be hundreds of dollars more or less expensive. A bill for a CT scan on March 5 could be hundreds or thousands of dollars more or less costly than one taken on June 5. They may have nothing to do with the hospital’s costs and may be based on how much money the hospital wants to make.

In 2003, Texas enacted its “paid and incurred” law concerning lawsuit recoveries. Later Texas court decisions ruled that what’s at issue is not the hospital’s full “chargemaster” rate but the costs already paid or incurred, as stated in the statute:

“In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.”

If your injuries and limitations are expected to continue, part of your damages would be the future costs of the treatment, surgeries, rehabilitation, and therapy. In addition to this state statute, there are court decisions stating the amount must be reasonable, even if the defendant doesn’t dispute them.

…As Long as They’re Reasonable

The state Supreme Court stated last year in IN RE K & L AUTO CRUSHERS, LLC, that hospital rates charged to private insurers and public programs weren’t automatically reasonable, but they’re relevant to deciding if “chargemaster” rates a plaintiff paid are appropriate.

The court also stated whether something was “actually paid or incurred” is just the start. The plaintiff must also show that the charges were reasonable when and where the service was provided. That was the standard in earlier cases involving medical liens. The court stated that the “any other limitation under law” language in the statute refers to those cases.

That could potentially mean:

  • If you’re uninsured and pay $5,000 for a treatment a court decides was unreasonably high, you might only be awarded what the court decides is reasonable, maybe $3,000
  • If you’re insured and your health coverage carrier paid $3,000, the defendant, with the help of medical billing experts, could argue that the insurance carrier paid an unreasonable amount. If the judge agrees, your emotional distress award may be based on what’s considered reasonable, perhaps $1,500

The court reasoned that a defendant is responsible only for losses caused by their conduct. Their holding ‘…ensures that the tortfeasor (the defendant) is held responsible only for losses naturally resulting from its wrongful act…If a claimant agrees or is required to pay a medical provider more than a reasonable amount, the difference between the amount paid and a reasonable amount is not a “necessary and usual result of the tortious (negligent) act” but of the claimant’s or provider’s conduct.’

What Does This Mean?

The court, when balancing whether plaintiffs may arguably be over-compensated or under-compensated, ruled in favor of defendants, making it harder and more complex for plaintiffs to be awarded medical costs. This also means that awards for pain, suffering, and mental distress are lower than if the court decided otherwise.

To overcome this, we use our own medical billing experts to tell your side of the story and show the court your costs are reasonable, and the defendants are just trying to limit their liability without sufficient facts backing them up. If the insurance company’s using unqualified experts to try to reduce your claim, we’ll let the court know about that too.

Schechter, Shaffer & Harris, LLP Helps Those Seriously Injured in Vehicle Accidents

Our attorneys have many years of legal experience helping car accident victims. Our Houston law office deals with major insurance providers, so you won’t have to. You can focus on your family and recovery while we work to get you the best outcome possible. Don’t worry about costs when you call us at 713-893-0971 – we work on contingency, and we’ll evaluate your case during a free consultation.