Paid and Incurred as it relates to Injury accidents

What is Paid and Incurred?


Imagine for a brief moment that you are in a horrible car accident. You are badly hurt, and you are rushed to the hospital. The good news is that you are okay and you were lucky enough to walk away with your life. The bad news is that now you are stuck with an enormous medical bill that you have to pay.


Let’s say that you incurred a $100,000  hospital bill; which is on top of  the future medical bills you will incur and the mental trauma that you have suffered as a result of the car accident. Time goes by and your Austin Injury lawyer fights tooth and nail, like we do at Funk and Associates. He presents the bill to the insurance company, but at that point the hospital dropped the medical bill from $100,000 to $20,000; or in the alternative, your  Health Insurance company paid a discounted amount of $20,000 for a $100,000 bill.  What does this mean for your case?


Well, this can be a double edged sword. On the one hand its great news because the high medical bill that you were worried about isn’t that high anymore. It’s still a great deal of money, but it’s not $100,000 anymore. The bad news is that your Austin Injury lawyer can no longer present the $100,000 bill to the insurance company. Injury lawyers in Texas can only present bills that have been “paid or  incurred.” Because the $100,000 bill is now $20,000, the $20,000 bill is now the bill that will be paid and incurred” and hence, the bill that must be presented.


This came about through a famous case , Haygood v. De Escabedo. In this case the Supreme court of Texas finally clarified the “Paid or Incurred” Statute. Before the ruling, it was unclear as to how exactly the “Paid or Incurred” statute actually worked. Before the ruling some lawyers would present the $100,000 bill to the insurance company. This is no longer the case.


Austin Injury lawyers can only present medical bills that are entitled to be paid; anything else is irrelevant and inadmissible. This basically means that before a jury even gets to hear or see evidence of the full medical bills, the “Paid or Incurred” statute must be applied. This caused a lot of strong opinions among the Austin Injury Lawyer community. Here at Funk & Associates nothing has changed. We fought hard before the “paid and incurred” statute  and we continue to fight hard now. If you were injured, give us a call; we pride ourselves in helping injured people like you.