What Is Paid and Incurred in a Texas Personal Injury Case?

Short answer: In Texas, you can only recover medical expenses that are actually paid or incurred under the law. Understanding what this means is crucial when calculating damages in a personal injury case, because the amount on a hospital bill is rarely the amount you are entitled to recover.

Under the Texas Civil Practice and Remedies Code, past medical expenses are limited to what has been paid out of pocket or incurred by you or your insurance. This distinction is important because most people assume that the total billed amount at a hospital or medical facility is automatically recoverable—but that’s not the case.

For example, imagine you go to the hospital and receive a bill of $30,000. Your health insurance negotiates a contractual adjustment, reducing the bill to $1,500. If your insurance pays $1,000 and you pay $500 out of pocket, the total “paid and incurred” amount is $1,500—not the original $30,000 bill. The law only recognizes what was actually paid or legally obligated to be paid, not the inflated amount originally billed by the hospital.

On the other hand, if someone does not use health insurance and is billed the full $30,000, then they have incurred the full amount. In that scenario, they could potentially recover the entire $30,000 in their personal injury case because the full amount represents what was actually incurred for medical treatment.

It’s also important to remember that past medical bills are just one component of a personal injury case. You may also be entitled to recover for pain and suffering, lost wages, emotional distress, and future medical care. This is why having an experienced attorney is essential—they can properly document your medical expenses, calculate the actual paid and incurred amounts, and ensure that your claim includes all recoverable damages.

An attorney can also help navigate situations where health insurance and medical liens come into play. Hospitals often place liens on settlements when they have treated you, and understanding how these affect your recoverable amounts is critical. Properly calculating paid and incurred amounts ensures you receive fair compensation while complying with legal requirements.