On July 1, 2011,the Supreme Court of Texas modified long existing common law known as the collateral source rule in such a manner as to inhibit the victims of car wrecks, truck wrecks, defective products and bad drugs from getting a fair recovery from a jury in Texas. In the case of Haygood v. Escobedo, Tex. Sup. Ct. No. 09-0377, July 1, 2011, the Court concluded that health care providers make it a practice to set their full charges as high as possible in order to attempt to influence private insurers and medicare to increase reimbursement rates. As a result, the Court concluded that juries should ignore these charges by health care providers in determining the award of reasonable and necessary medical expenses and only consider what the health insurance carrier or Medicare actually paid under its reimbursement agreement. While innocuous on its face, the Court well knows that the amount of medical expenses presented to the jury during trial impacts the award of other elements of damages such as pain and suffering. By refusing to allow the jury to consider the full charge of the health insurance carrier in determining damages and only allowing the amount paid under a reimbursement agreement with the private health insurance carrier or Medicare, it can be concluded that jury verdicts in cases where the victim of personal injury has private insurance will be smaller.
The collateral source rule was intended to prevent the wrongdoer to benefit from a person having insurance independently purchased from a third party. In my opinion, what is wrong with this opinion is that a person who did not purchase private health insurance will continue to be able to submit the full amount of the bill charged by the health insurance provider and as a result will in all probability have disparately higher jury awards when compared to the victim with the good judgment to purchase such coverage. As a result, in my opinion, the Haygood opinion accomplishes exactly what the collateral source rule was designed to prevent. It has the effect, whether unintended or not, to influence jury verdicts against wrongdoers lower in cases where the personal injury plaintiff did the prudent thing by purchasing health insurance.
Mike McGartland