Texas Legal Glossary · Personal Injury

Paid or Incurred

Written and reviewed by Shane M. Boasberg, founder of SMB Law, PC · Licensed in Texas since 2003 · Updated October 2026

Definition: Paid or incurred is the Texas rule in Civil Practice and Remedies Code § 41.0105 limiting recoverable medical expenses to amounts actually paid or still owed for the injured person. Charges written off by insurance cannot be recovered or shown to the jury.

Also called: paid-or-incurred rule, Section 41.0105, Haygood rule

What paid or incurred means in Texas

Paid or incurred is shorthand for § 41.0105 of the Civil Practice and Remedies Code: recovery of medical or health care expenses is limited to the amount actually paid or incurred by or on behalf of the claimant. A hospital may bill $50,000, but if your health plan settled the account for $12,000 and the hospital wrote off the rest, the written-off $38,000 was never paid and is no longer owed. It is not recoverable.

The Texas Supreme Court confirmed this in Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011). The Court also held that evidence of the written-off amounts is irrelevant and inadmissible, so the jury sees only the adjusted figures.

How it works in practice

Medical damages are usually proved with Section 18.001 affidavits from each provider’s records custodian stating that the charges were reasonable and the services necessary. After Haygood, those affidavits must reflect paid-or-incurred amounts rather than gross billed charges. Defendants respond with counter-affidavits challenging reasonableness.

The rule treats different patients differently. An insured patient’s recoverable medicals are the discounted amounts the insurer paid plus any deductible or copay still owed. An uninsured patient who treats under a letter of protection has incurred the full bill, because nothing has been written off, so the full amount is in play, subject to a reasonableness fight. Medicare and Medicaid payments count at the amounts those programs actually paid.

Why it matters in your case

Medical expenses are the anchor for most of the other numbers in an injury claim. Adjusters often use medicals as a reference point when valuing pain and suffering, so a smaller paid-or-incurred figure tends to pull the whole offer down. It also shapes the subrogation math, since the plan that paid the discounted amount is the one asking to be repaid. Knowing what will actually be recoverable at trial is the starting point for any serious settlement discussion.

Example

Marcus is injured in a crash at Parmer Lane and billed $42,000 by the hospital. His health insurer pays $11,000 under its contract rate, Marcus pays a $1,500 deductible, and the hospital writes off the remaining $29,500. Under § 41.0105 his recoverable past medical expenses are $12,500. The jury never hears the $42,000 figure.

This entry explains Texas law in general terms and is not legal advice for any specific situation. Statutes and case law change; the date above reflects the last review.