§ 41.0105.Evidence Relating to Amount of Economic Damages

The paid-or-incurred rule, in a single sentence, and it changed the value of Texas personal injury cases more than its length suggests.

In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount "actually paid or incurred" by or on behalf of the claimant.

The provision addresses the gap between billed and paid. A hospital may bill $80,000 for a stay that an insurer settles for $22,000 under a negotiated rate, with the balance written off and never owed by anyone. Before this section, the larger figure was the one a jury heard.

"By or on behalf of the claimant" is the phrase that keeps the rule from cutting too far. Amounts paid by an insurer, by an employer's plan, or by a family member are paid on the claimant's behalf and are recoverable. What is not recoverable is the written-off balance nobody paid and nobody owes.

The consequence reaches beyond the damages figure. Because only the paid-or-incurred amount is recoverable, it is the amount that can be put before the jury — so the section shapes what medical bills are admissible, not merely what may be collected.

It also feeds the exemplary damages cap, whose formula doubles economic damages. A smaller medical figure produces a smaller cap.