In recent years, one of the most contentious issues in personal injury cases has revolved around proof of medical expenses related to the plaintiff’s injuries.  The common law requires a plaintiff prove that the medical expenses he or she incurred are reasonable and necessary.  Many times, the proof is routine.  For that reason, the legislature passed legislation that allows proof of such expenses to be presented by affidavit, rather than by live testimony, thereby relieving parties of the need to bring medical providers to the courthouse and thus take the health care providers away from their patients.  The rising costs of healthcare have contributed to more and more challenges to plaintiffs’ evidence of reasonableness of their medical costs.  The procedures the legislature adopted to facilitate challenges to a plaintiff’s affidavit proof have become a tool for gamesmanship used to prevent defendants from challenging the plaintiff’s proof.  Fortunately, the Texas Supreme Court has brought clarity and sanity to the practice in this area.

 

Reasonable Discovery is Allowed from Third-party Medical Providers

Medical providers typically charge their patients different rates, depending upon whether the patient has insurance or not, the type of insurance, and other factors.  How these providers arrive at their rates and what is charged one patient versus another, is relevant to the question of what a reasonable fee is for the service in question.  But medical providers, who are not parties to the personal injury suit, see such discovery as invasive and burdensome.

In 2018, the Texas Supreme Court held in In re N. Cypress Med. Ctr. Operating Co., 559 S.W.3d 128, 129 (Tex. 2018), held that a hospital’s negotiated payment agreements with insurers and federal healthcare providers were relevant and discoverable on the issue of reasonableness of medical expenses in a case involving an uninsured patient.

In May of this year, the Texas Supreme Court again addressed similar discovery requests submitted to third-party health-care providers in In re K & L Auto Crushers, LLC, No. 19-1022, 2021 Tex. LEXIS 427 (May 28, 2021).  K& L Auto Crushers had submitted discovery requests to third-party medical providers that essentially mirrored the requests from the North Cypress Medical Center case.  The medical providers objected on a number of grounds, including relevance, burdensomeness, and invasiveness.  The trial court sustained the objections without considering whether the requests were burdensome or invasive.  The Texas Supreme Court held that the trial court had abused its discretion in sustaining the objection, citing its North Cypress Medical Center opinion.  While the court held that the requests were relevant, the court emphasized that the amount of information obtainable could be subject to a reasonable proportionality limit, particularly when the burden of the proposed discovery outweighs the benefit.  However, the court also noted that a medical provider’s cost of complying with the discovery requests is borne by the party seeking the information.  The court held that the requests in this case were not burdensome.  Finally, with respect to the medical providers’ objections to trade secrets and confidential information, the supreme court  held that the trial court abused its discretion by failing to consider whether a protective order would adequately address the medical providers’ concerns.

 

The Affidavit Wars

Another prominent area for dispute on this issue involves defendants’ use of a counter-affidavit to challenge certain medical expenses that plaintiffs seek to prove up by affidavit.  When a defendant desires to question the reasonableness and necessity of a plaintiff’s expenses, the defendant must file a counter-affidavit that “give[s] reasonable notice of the basis on which the party serving it intends at trial to controvert the claim reflected by the [plaintiff’s] initial affidavit.”  Tex. Civ. Prac. & Rem. Code § 18.001(f).  Many plaintiffs routinely move to strike counter-affidavits for reasons such as inadequate notice of the grounds for the challenge, or because the defendant’s medical expert lacks qualifications needed to attest to the reasonableness and necessity of the medical expenses at issue.

In In re Allstate Indemnity Company, No. 20-0071, 2021 Tex. LEXIS 375 (May 7, 2021), the Texas Supreme Court helped bring some sanity to these affidavit wars.  In its opinion, the court held that a counter-affidavit should be measured by a “fair notice” standard.  As long as the affiant itemizes the charge being controverted and explains the basis for the challenge, this standard is met.  The court also rejected the trial court’s application of a reliability standard to the affiant’s testimony, concluding that the legislature had not imposed such a threshold standard.  The court also held that the trial court abused its discretion by precluding the defendant from questioning the plaintiff’s witnesses, offering evidence, or arguing to the jury about the reasonableness at trial.  The court observed that the counter-affidavit procedure is purely procedural and designed to streamline a plaintiff’s proof at trial, but the statutory procedure does not impact a defendant’s ability to challenge the reasonableness and necessity of the plaintiff’s expenses at trial. 

 

By Published On: July 7, 2021Categories: Tort LawTags: , ,

About the Author: Mike Northrup

Mike Northrup is a Shareholder and Section Head of the Cowles and Thompson Appellate Practice Group.