AUSTIN – Senate Bill 207 will help put an end to “enterprising” trial lawyers who collude with “unscrupulous” medical providers to inflate medical bills in hopes of greater jury awards, says the bill’s author.
This morning, the Senate State Affairs committee began hearing testimony on SB 207, which was introduced by Sen. Charles Schwertner (R-Georgetown).
The bill seeks to address the abuse of the paid or incurred statute and the process of proving up the reasonableness of medical charges.
“Quite frankly, this is a money bill,” Schwertner said, adding that he believes the bill he spent the past three years working on will help end “runaway civil lawsuits in Texas” and the “cottage industry” that has sprung up because of the paid or incurred statute.
Schwertner said “enterprising” trial lawyers are colluding with “unscrupulous” medical providers in order to “juice up” medical damages in civil suits, which can result in overall higher damage awards.
In 2003, the Texas Legislature added section 41.0105 to the Civil Practice and Remedies Code (the paid or incurred statute), which requires a plaintiff seeking to recover healthcare expenses in a civil case to present to the jury the amount actually paid or still owing.
Proponents of SB 207 argue plaintiff lawyers avoid the requirement by sending clients to healthcare providers who agree not to submit medical bills to a third party for payment (insurance and Medicaid).
By skirting the requirement, trial lawyers and their clients avoid a discounted price that would normally be negotiated by insurers, allowing the attorney to present the higher, billed rate to the jury as damages when, in fact, that amount has not actually been paid and is not owed.
Opponents of the bill argue the legislation will result in medical professionals spending less time with their patients and more time defending their billing charges in court.
“There are abuses in … medical damages and it needs to be addressed,” Schwertner said. “(SB 207) is a bill that goes after … inappropriate medical costs … and those that doing it will never agree.
“The only ones who need to worry about this (bill) are the ones who are overbilling.”
SB 207 aims to give juries better information about medical billing. For instance, instead of hearing only of the provider’s billed charges, the jury may be presented with other evidence that tends to prove the actual market value of medical services.
Lee Parsley, general counsel for Texans for Lawsuit Reform, testified that trial lawyers send their clients to same medical providers regularly – providers that get a cut of the recovery.
“The potential exists for the lawyer and the health care provider to make money (from the civil suit) and we find that distasteful,” Parsley said.
The committee also heard testimony from insurance experts who insisted inflated medical bills are driving up insurance costs and forcing small businesses, especially trucking companies, to shut down or relocate out of the state.
Adam Blanchard, president of the Texas Trucking Association, said the state will see the “largest exodus of trucking companies” if overbilling continues.
“If we don’t fix this, we are going to die a death of a thousand razor blades,” Blanchard said.