Medical Bill Write-offs Are Not Recoverable in Texas - Texas Supreme Court analyzes "paid or incurred" statute

Most medical billing records today list the healthcare providers' charges as well as the amounts actually paid to the providers after insurance adjustments and provider write-offs. In 2003, the Texas Legislature enacted a statute (Tx Civil Practice & Remedies Code § 41.0105) that purported to prevent civil plaintiffs from recovering these medical expenses that were not "actually paid or incurred". Since that time, there have been many debates in trial and appellate courts across Texas about the meaning and effect of the statute. Until today.

The Supreme Court of Texas issued an opinion today holding that this "paid or incurred" statute limits a plaintiff's recovery to only those sums actually paid or actually incurred. Consequently, a plaintiff cannot recover or even present evidence of the initial medical charges that are later written off or adjusted. This definitive interpretation of the statute by the Texas Supreme Court should have a significant impact on the amounts plaintiffs are able to seek and recover for medical expenses when their medical bills are substantially reduced by such insurance adjustments or write-offs.

Obtaining Social Security Numbers for MMSEA Section 111 Reporting

Insurance adjusters throughout the country should already be aware of MMSEA Section 111, which mandates that insurance companies submit electronic reports with information about payments made to Medicare beneficiaries by liability insurers, no-fault insurers, workers' compensation insurers, and even self-insurers.

These reporting requirements only apply to payments to Medicare beneficiaries. But the new rules affect all claims because a threshold question for each and every liability or no-fault claim will be: Is the claimant a Medicare beneficiary?

Some claimants may admit that they are Medicare beneficiaries. But for any claimants that deny they are Medicare beneficiaries, insurers have a duty to investigate whether those claimants actually are Medicare beneficiaries. And for any claimants who admit to Medicare beneficiary status but provide inaccurate Medicare Health Insurance Claim Numbers (HICNs), the insurer must determine the correct number.

CMS (Centers for Medicare and Medicaid Services) has created an electronic query program for insurance companies to use to determine the Medicare status of beneficiaries. For a successful query, the insurer needs:

(1) the claimant's Social Security Number

(or preferably the claimant's HICN),

(2) the claimant's date of birth,

(3) the claimant's name, and

(4) the claimant's gender.

It is therefore important for adjusters to obtain this information from all claimants.

What happens if a claimant (or claimant's attorney) refuses to give out the SSN or HICN? This information is critical for the query. CMS has issued this Alert to help inform those unwilling to provide such information of why the information is necessary. CMS issued this Alert indicating that those claimants who refuse to provide the information should be required to sign a document with this Model Language in order for the insurer to be compliant with the reporting requirements. Otherwise, it is best for the adjusters to make every attempt to obtain the SSN or HICN information from all claimants. For claimants who have instituted litigation against an insured, the attorneys handling the insured's defense should obtain this information in discovery.

Why run checks on all claimants if the reporting rules only apply to Medicare-eligible claimants? Because it is too difficult to determine whether the claimants are, in fact, Medicare eligible. Persons under age 65 can be eligible for Medicare if they have End Stage Renal Disease or certain disabilities. While you make assume that a 30-year-old claimant is simply too young to be eligible for Medicare, that claimant may be a Medicare beneficiary because he is on Social Security Disability or suffering from End Stage Renal Disease. Because age is not the only factor for Medicare eligibility, it is important to run the query for every claimant that doesn't admit to Medicare eligibility to avoid inadvertently violating the reporting rules.

5 Things Every Adjuster Should Know About Summary Judgments in Texas

1. Trial judges in Texas do not like to grant motions for summary judgment because they don't want to take away the plaintiff's day in court. And judges cannot be reversed on appeal for denying a motion for summary judgment, only for granting one.

2. Plaintiffs can defeat motions for summary judgment by convincing the trial judge that a question of fact exists for the jury to decide, and it never takes much to convince the judge.

3. A denial of a summary judgment is generally not appealable in Texas, but the granting of a summary judgment is appealable. (In other words, the trial judge can only be reversed by granting the summary judgment.)

4. Plaintiffs can easily defeat motions for summary judgment just by amending their pleadings.

5. Despite the difficulty of obtaining summary judgment in Texas, they are still worthwhile. Sometimes a defendant is entitled to judgment as a matter of law on an issue that can never be decided by the jury. Sometimes the plaintiff has absolutely no evidence to give to the jury to prove his or her case. Sometimes they can give a defendant an advantage in settlement negotiations. And sometimes they even get granted.

Preserving Evidence - Surveillance Videos

When slip and falls are caught on surveillance video, some premises owners recognize the need to preserve the surveillance video in the event of potential claims or lawsuits. But how much of the video should be preserved, and what are the consequences of failing to preserve enough of the video?

At least two recent cases in Texas have held that premises owners have duties to preserve more than just the 10 minute period up to and including the slip and fall incident. See, Brookshire Bros., Ltd. v. Aldridge, No. 12-08-00368-CV, 2010 WL 2982902 (Tex.App. -- Tyler 2010, no pet. h.) (for opinion, click here); Clark v. Randalls Food, No. 01-08-00732-CV, ___ S.W.3d ____, 2010 WL 670554 (Tex.App. -- Houston[1st Dist] 2010, pet. denied)(for opinion, click here). The amount of time between the creation of the dangerous condition (i.e., spill, puddle, fallen object) and the accident is important to whether a plaintiff can prove that the premises owner knew or should have known about the danger, which is an essential element of the premises liability claim. Therefore surveillance videos may capture relevant temporal evidence about the danger or whether the owner was on notice of the danger.

If a store owner decides to preserve a portion of the surveillance video related to a slip and fall, it would be prudent to preserve enough video to show what happened immediately before, during and after the incident. In Clark v. Randalls Food, for example, the court held that the store had a duty to preserve the footage starting at least one hour prior to the slip and fall incident, rather than just the 6 minute period up to and including the slip and fall. Under different circumstances, even one hour may not be sufficient; each set of circumstances requires an inquiry into how much of the evidence would be relevant to the claim. If a store preserves some but not enough of the video, should the claim turn into a lawsuit, the plaintiff may be able to convince the trial judge that he or she is entitled to some remedy based on spoliation, which is the intentional or negligent failure to preserve relevant evidence. One such remedy is to instruct the jury that they may presume that the missing evidence was not good for the store, a presumption that will be difficult to overcome without the missing evidence.

From a practical standpoint, therefore, if a premises owner is on notice that surveillance video needs to be preserved or voluntarily decides to preserve surveillance video related to any accident on his premises, the premises owner should be aware that the footage of the actual accident is likely not the only footage he needs to preserve.

Naturally-Accumulating Ice is NOT an Unreasonably Dangerous Condition

The Texas Supreme Court issued a new opinion today in a premises liability case involving a slip and fall on ice after a rare Texas snow storm. The Texas Supreme Court held that ice that accumulates naturally outside a business due to a winter storm does not pose an unreasonable risk of harm. The Court also noted that the business owner's application of a deicer does not create a substantially more dangerous condition than the ice in its natural state. Even if the owner uses a deicer to melt the ice, the owner does not create an unnatural condition if the ice refreezes after melting, because ice that melts and then refreezes is still considered natural accumulation. See, Scott and White Mem. Hosp. and Scott, Sherwood and Brindley Foundation v. Fair, No. 08-0970, (Tex.May 7, 2010).

Immigration Status not a factor in Negligent Entrustment/Hiring

In a negligent entrustment/negligent hiring case against a company whose driver causes an auto accident, the driver’s immigration status is not admissible at trial to prove these causes of action against the company. TXI Transp. Co. v. Hughes, No. 07-0541 (Tex.2010). The Texas Supreme Court has held:

We have said a claim for negligent hiring or entrustment cannot lie if “[t]he risk that caused the entrustment to be negligent did not cause the collision,” and if a “defendant’s negligence did no more than furnish a condition which made the injury possible.” Here, Rodriguez’s immigration status did not cause the collision, and was not relevant to the negligent entrustment or hiring claims—even if TXI’s failure to screen, and thus its failure to discover his inability to work in the United States, “furnished [the] condition” that made the accident possible. We agree with the court of appeals “that neither Rodriguez’s status as an illegal alien or his use of a fake Social Security number to obtain a commercial driver’s license created a foreseeable risk that Rodriguez would negligently drive the gravel truck.”

(citations omitted).

New Rules for Insurers - Child Support Liens

Insurers now have a duty to cooperate with the Texas Attorney General to identify insurance claimants with past-due child support arrearages. In 2009, the Texas Legislature amended Section 231.015 of the Texas Family Code to make it mandatory for insurers doing business in Texas to participate in an insurance intercept program. The Office of the Attorney General has adopted new rules in the Texas Administrative Code implementing these changes, and the new rules take effect March 16, 2010. Insurance companies doing business in Texas should coordinate with the Insurance Service Office (ISO) or the Child Support Lien Network (CSLN) to participate in the program, which entails performing either automated data matches or interactive look-ups of almost all personal injury claimants prior to payment of their claims.