Farmers Texas County Mutual Insurance Co. v Beasley, 18-0469 (Tex. March 27, 2020)
While not a governmental entity case, this case involves standing to sue under a personal injury protection policy (PIP) and the distinction made with incurred rates vs. list rates of the medical providers. This can affect not only litigation but also those entities which are self-insured.
Beasley was injured in a car accident and his treatment displayed in the medical provider’s invoices totaled $2,662.54. Beasly had health coverage with BlueCross Blue Shield (BCBS) which negotiated a provider rate of $1,068.90. The medical providers did not attempt to recover or hold him liable for the difference. Beasley also had a PIP policy through Farmers Texas County Mutual Insurance Company (Farmers). The policy stated it would pay benefits because of bodily injury, including reasonable medical expenses. Beasley made a claim but sought the list/invoiced rates. Farmers paid Beasley $1,068.90. He sued for the difference alleging breach of contract and asserting the policy covers reasonable medical costs, regardless of any reductions the providers agreed to accept later. Farmers asserted the policy was for medical expenses incurred. The trial court granted Farmers’ plea to the jurisdiction but the court of appeals reversed holding the breach of contract claim was sufficient to confer jurisdiction. Farmers appealed.
Standing is a requirement of jurisdiction and Beasley must establish an injury. Beasley was not harmed as the medical providers did not attempt to charge him for the difference. He was not able to claim any unreimbursed, out-of-pocket medical expenses. Nor does Beasley assert that any of his medical providers withheld treatment as a result of the adjusted bills. The fact Beasley felt personally aggrieved by the lack of payment does not mean he suffered an injury. [Comment: yes, he actually made that argument.] Beasley also asserts Farmers impermissibly considered a collateral source in determining how much to reimburse: BCBS’s payments to Beasley’s medical providers. But a health insurer’s negotiated discounts do not constitute a collateral source of benefits to the insured in this context. Adjustments in the amount of charges to arrive at the amount owed is a benefit to the insurer, one it obtains from the provider for itself, not for the insured. As a result, the collateral source rule is inapplicable in Beasley’s case. Beasley, therefore, was not able to establish standing to bring suit.