HOW DOES TORT REFORM REDUCE THE DAMAGES YOU CAN RECOVER
In 2010, the money damages a victim of an auto accident can recover is much less than a few years ago because of so called “Tort Reform.”
In the past, victims could recover that amount of money that was the usual and customary charges for all expenses for medical treatment that was necessary to treat the injuries. You simply obtained all the billing statements from the hospitals and doctors and added them all up to get a total amount.
Today, the victim can only recover that amount of money that was actually paid or incurred for such medical treatment. Most total bills are paid at reduced rates and the hospital of physician cannot come to the victim for the balance once the hospital or physician accepts the lesser amount. As an example, if the total charges for all medical treatment were $60,000.00 and $30,000.00 was paid by an insurance company, Medicare, or Medicaid, then the amount incurred would by $30,000.00 plus whatever additional amounts the victim paid out of pocket.
If the bills were paid by an insurance company, Medicare, or Medicaid, then the insurance company, Medicare, or Medicaid has subrogation, meaning that they get repaid out of the victim’s settlement money. In the past an insurance company could not get repaid until the victim was “made whole” by the recovery. The “made whole” doctrine was thrown out by the Texas Supreme Court, giving insurance companies first rights to the victim’s damage recovery.