On one end, some states hold either by judicial ruling or by statute that a plaintiff cannot recover more than her healthcare provider(s) accepted in full satisfaction of the bills. See, e.g., Stayton v. Delaware Health Corp., 117 A.3d 521, 530 (De. 2015) (common law ruling that the amount paid by Medicare or Medicaid is dispositive of the reasonable value of healthcare services, and collateral source rule does not require otherwise); Howell v. Hamilton Meats and Provisions, Inc., 52 Cal.4th 541 (2011) (same); Hanif v. Housing Authority, 200 Cal.App.3d 635 (1988) (same); Iowa Code §§ 622.4, 668.14A (new statute limiting plaintiff’s recover to amount actually paid); Tex. Civ. Prac. & Rem. Code § 41.0105; Haygood v. Garza de Escabedo, 356 S.W.3d 390 (Tex. 2011) (confirming that Texas statute limits plaintiff’s recovery to only the discounted amount, and limits evidence of medical expenses to the amount paid). On the other end, some states hold that a plaintiff can recover the full “face amount” of her bills and a defendant cannot introduce evidence of the “amount actually paid.”

Establishing the usual inflation in medical billing and that those amounts are rarely actually recovered can be powerful evidence in demonstrating the appropriate measure of past medical damages.[1] Tex. Civ. Prac. & Rem. Code § 41.0105 (“recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.”)[2] George A. Nation III, Obscene Contracts: The Doctrine of Unconscionability and Hospital Billing of theUninsured, 94 Ky. L.J. 101, 103-04 & n.16 (2006).

The Collateral Source Rule Texas, like many states, enforces the collateral source rule, which precludes any reduction in a tortfeasor’s liability because of benefits received by the plaintiff from someone else − a collateral source. The Texas Supreme Court has held that Texas Civil Practice and Remedies Code § 41.0105 limits a plaintiff’s past medical damages to those amounts actually paid or incurred (and prevents plaintiffs from recovering amounts initially charged but subsequently written off by a health care provider, that neither the claimant nor anyone on claimant’s behalf will ultimately be liable for paying). See Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2010) (“To impose liability for medical expenses that a health care provider is not entitled to charge does not prevent a windfall to a tortfeasor; it creates one for a claimant….”).