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In recent years the Supreme Court of Texas has issued a series of decisions that affect damages for past medical expenses in personal injury and hospital lien cases. These decisions affect the evidence plaintiffs and defendants need to offer on past medical expenses. This blog post is intended to briefly summarize my understanding of the state of the law, and is not intended as a formal legal article. Here are the main points:
- A healthcare provider is only entitled to recover the reasonable value of its services.
- A healthcare provider’s billed charges are often not a reliable indicator of the reasonable value of the services.
- The rates a provider has negotiated with health plans are a more reliable indicator of the reasonable value of the services in certain conditions.
- The amount a patient or one acting for the patient has paid or agreed to pay and the provider has agreed to accept as payment in full is a more reliable indicator of the reasonable value of the services in certain conditions.
- A party asked to pay medical expenses as damages or as a lien to a healthcare provider has the right to discovery of that provider’s contracts and the payments it actually accepts for its services, to establish the reasonable value of the services.
The Court has also clarified the rights of defendants relative to Section 18.001. Most importantly:
- The plaintiff in a personal injury case or a healthcare provider seeking payment for a medical lien has the burden to prove the reasonable value of services.
- The Court decided, in the absence of a counter-affidavit, the defendant may put on evidence on the reasonable value and the medical necessity of services.
- Since Section 18.001 addresses the reasonableness of billed charges and the ultimate question is reasonable value and billed charges are not a reasonable indicator of reasonable value, the affidavit/counter affidavit process is less important.
- The Court indicated the reasonable value of healthcare services is an economic and financial question and not primarily a matter of medical opinion.
If I am correct, both plaintiffs and defendants will focus less on Section 18.001 and more on having economic and financial experts prepare expert reports that analyze all past medical expenses and present opinions on the reasonable value of the services. These reports may rely on physician opinions on the medical necessity and appropriateness of the overall course of past treatment. Such a report for the plaintiff can avoid the need to bring healthcare providers to court to testify on the reasonable value of their services. Such a report for the defendant can substantially reduce the exposure for past medical expenses.
RPC can prepare expert reports on reasonable charges and reasonable value of medical services for plaintiffs and defendants. We have the data and software to determine 80th percentile UCR charges. We can also reprice medical bills to Medicare, workers’ compensation, or commercial rates when the “paid or incurred” principle applies. State courts and administrative agencies have accepted RPC’s economic consultants as experts on reasonable value of medical services.
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