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Past and future medical expenses are major elements of damages in personal injury cases. In many cases they are by far the largest element of “hard” damages and are used as a reference point for jurors in awarding pain and suffering and other “soft” damages. While plaintiffs should be fairly compensated for their medical expenses, the expenses should not be unfairly inflated.
In a series of cases the Supreme Court of Texas (SCOT) has decided that a plaintiff is only entitled to recover the reasonable value of past medical expenses and that a practitioner or facility’s billed charges are not a reliable indicator of reasonable value. Instead, the reasonable value may be shown by the amount paid or incurred for the plaintiff’s expenses by a public or private health plan under a negotiated or regulated rate.
The reasonable value may be shown by the negotiated rates the provider has agreed to accept from health plans even if the plaintiff is not covered by those health plans. The SCOT has also held defendants have the right to reasonable discovery from the plaintiff’s medical providers to learn those rates.
In the absence of information on the negotiated rates of a specific provider, the defendant can rely on statistical data to determine the range of reasonable value. The upper end of the range of reasonable value is the 75th or 80th percentile of the usual, customary and reasonable charge (UCR75 or UCR80) for the services in the provider’s medical market because this is the rate at which some private health plans pay out of network providers. Besides its role in determining the reasonable value of medical services, defendants need to determine the reasonable charge to file counter affidavits in response to Section 18.001 affidavits from providers.
Plaintiffs also need to determine reasonable value in order to resolve medical liens and letters of protection to protect their clients from excessive charges. The SCOT has given plaintiffs the right to reasonable discovery from a plaintiff’s medical providers for this purpose.
Research & Planning Consultants (RPC) has been involved in the development of this body of law by filing amicus briefs with the SCOT in three of the cases that are on our web site here. We have prepared many Section 18.001 counter affidavits on reasonableness of charges that have been accepted by trial courts. We also helped plaintiffs resolve medical liens.
Recently we modified an actual report on reasonable charges and reasonable value for a defendant to create a sample report showing RPC’s data sources and methods of analysis for part medical expenses. The sample report is available to download here. Several of the attachments to the report are RPC white papers that are also available to download.
I hope you will download and review the sample report. If you see a need for this sort of report in your personal injury cases, we are happy to discuss how we might help you. Please contact Ron Luke, JD, PhD (5123718188; rluke@rpcconsulting.com) or RPC’s operations manager, Roy Bourne (5123718026; rbourne@rpcconsulting.com).