What Are Plaintiffs to Do?

We are shocked to find that no one has commented on the introduction of Texas Senate Bill No. 1856 since it was filed on March 11, 2011.  This bill, if enacted would have appalling consequences for injured plaintiffs throughout Texas.

In essence, S.B. 1856 would rewrite Texas Civil Practice and Remedies Code Section 41.0105 such that injured plaintiffs can only recover what they actually paid to the hospital or physician that rendered services.  Based on the literal meaning of the bill, Plaintiffs who are too injured to earn a paycheck and pay off their outstanding balances are out of luck because those remaining bills are not recoverable.

Most litigating attorneys know all too well the long history behind Section 41.0105.  Initially, the statute was part of 2003's wave of tort reform.  The statute stated that plaintiffs' recovery for health care expenses was limited to the amount "actually paid or incurred."  This raised a number of legal questions.  One of the questions was whether plaintiffs could recover the gross medical charges when some of the charges were written off.  That is, many claimed that if plaintiff had a $1000 bill, of which $500 was written off, the plaintiff should still recover the full $1000.  Unfortunately several courts of appeal disagreed, holding that plaintiffs were limited to recovering the remaining $500.

In 2007, the Texas House tried to clear up the confusion with HB 3281, which would have overturned the court cases and make section 41.0105 applicable only to medical malpractice claims.  The House unanimously passed the bill, and only 2 Senators opposed it.  Unfortunately, the bill was promptly vetoed by Governor Perry, thus precluding plaintiffs from recovering medical bills that were adjusted out.

Now the text of the proposed bill is not abundantly clear, and we will have to see what the legislative intent is behind the text.  But, based on the bill's plain meaning, S.B. 1856 would apparently prohibit plaintiffs from recovering outstanding balances, or amounts actually "incurred" (hence, the bill strikes the word "incurred," which was previously part of 41.0105).  Instead, plaintiffs would be limited to recovering what they actually paid to a physician or health care provider as a full payment of their medical bills.  If this reading is correct, the results would be disastrous.  Plaintiffs who are so injured that they cannot return to work and therefore cannot pay their medical bills would be precluded from collecting for the outstanding balance (which they would need to pay that balance) If this is the intent behind S.B. 1856, what are plaintiffs to do?

It isn't hard to see the reasoning behind S.B. 1856.  Senator Deuell was himself a practicing physician and today is a vocal and ardent conservative.  Senator Deuell is also a strongly favored by the Texas Medical Association.  These ties make for a bad bill and bad public policy.  This bill would punish only the poorest and most injured people while rewarding medical facilities and negligent individuals throughout the state.  Hopefully, S.B. 1856 will not pass, but we will be paying close attention to later developments.