Texas Supreme Court Clarifies Medical Billing Affidavit Procedure
Chapter 18 of the Texas Civil Practice and Remedies Code (“CPRC”), which creates a procedure for tort plaintiffs to prove past medical expenses by affidavit and without the need for live expert testimony at trial, has long been the focus of controversy as to its scope and effect. The statute, which the Texas Supreme Court describes as “a purely procedural statute that is designed to streamline proof of the reasonableness and necessity of medical expenses.”, has been turned into a weapon against defendants, with many intermediate courts holding that a defendant’s failure to satisfy the statute’s requirements for a counter-affidavit meant that a defendant could not contest the cost or necessity of treatment at trial. On May 7, 2021, the Texas Supreme Court put an end to this extreme court-created penalty for non-compliance with the statute’s procedural details.
In re Allstate is a mandamus proceeding challenging the trial court’s evidentiary ruling in an uninsured/underinsured motorist dispute between Allstate and its insured. The plaintiff/real party in interest, Norma Alaniz, served Allstate with a number of medical billing affidavits per CPRC § 18.001(c). Allstate, in turn, served counter-affidavits per CPRC § 18.001(e)-(f) challenging the reasonableness of the amounts charged by certain providers. The trial court, however, 1) determined that Allstate’s counter-affidavits failed to comply with the statute’s requirements; and 2) ruled that not only the affidavits but also any testimony by the affiant would be inadmissible at trial. The trial court further ruled that Allstate would be “prohibited from questioning witnesses, offering evidence, or arguing the ‘reasonableness of the medical bills’ that [Alaniz] has submitted by affidavit to date.”
The Texas Supreme Court’s opinion and order rejecting the trial court’s ruling will result in a significant shift in Texas tort litigation. Justice Rebeca Aizpuru Huddle, writing for a unanimous Court, saved the biggest news for last — after holding that the counter-affidavit satisfied the statute, the opinion concludes that even if it had not, a failure to do so was not fatal to the defendant’s ability to contest medical costs. Multiple intermediate appellate courts in Texas had previously held that failure to adequately controvert a Chapter 18 affidavit meant a defendant could not contest the substance of the affidavit at all. Emphasizing that the purpose of Chapter 18 was to enable a plaintiff to prove past costs by affidavit without the need for live testimony, the Court concluded that “[t]here is no textual support for the assertion that the absence of a proper counteraffidavit constitutes a basis to constrain the defendant’s ability to challenge — through evidence or argument — the claimant’s assertion that her medical expenses are reasonable and necessary.” The Court expressly overruled intermediate cases imposing an “exclusionary sanction” for utilizing a noncompliant counter-affidavit, holding that Chapter 18 was never intended to impose a “death penalty on the issue of past medical expenses.” Since many Texas plaintiffs’ attorneys use Chapter 18 as just such a device, this opinion is likely to be a sea change in Texas bodily injury litigation.
The Court’s unanimous opinion also clarified the requirements of counter-affidavits generally. Relying heavily on its 2018 opinion in Gunn v. McCoy, the Court concluded that the affiant in In re Allstate — a registered nurse with twenty-one years’ experience in health care of which twelve included review of medical bills, medical documentation, and medical billing practices — met the statutory standard of “qualifi[cation] as an expert by knowledge, skill, experience, training, education, or other expertise, to testify in contravention of all or part of any of the matters contained in the initial affidavit.” The Court expressly disagreed with Alaniz’s contention that the affiant was required to work in the same field of medicine as the plaintiff’s affiant, referencing Gunn’s holding that use of national and regional databases to compare prices is a valid basis for an opinion as to past medical costs. The Court’s reliance on Gunn, however, is instructive going forward, in that Gunn held that health insurance subrogation agents without specific medical training were qualified to render reasonableness-of-cost opinions for purposes of Chapter 18. Accordingly, even though the affiant in In re Allstate was a twenty-year RN, the opinion suggests a much broader scope of potential controverting affiants would satisfy the statute.
The Court also compared the “reasonable notice” language in Chapter 18 to the “fair notice” pleading standard under the Texas Rules of Civil Procedure, which requires that the opposing party be able to “ascertain from the pleading the nature and basic issues in controversy and what testimony can be relevant.” And the Court refused to apply a Daubert-type reliability standard to Chapter 18 affidavits, holding that opinions expressed in counter-affidavits need not meet admissibility standards in order to satisfy the statute. Overall, the opinion suggests that on the merits, motions to strike counter-affidavits should be sparingly granted, and that forensic medical billing experts will continue to be effective assets for the defense bar in responding to plaintiffs’ providers’ billing affidavits.
While overall, In re Allstate can be expected to defuse what had been a major defense-side land mine in bodily injury cases, Chapter 18 affidavits and counter-affidavits will remain an important part of Texas pre-trial procedure. The Texas Supreme Court did not change the requirement that a doctor or other medical provider opine as to necessity of treatment, and did not change that causation is never a subject for Chapter 18 affidavits. On a case-by-case basis Defendants will still need to determine whether to invest in controverting affidavits related to cost of treatment, necessity of treatment, or both, thereby forcing the plaintiff to bring live witnesses at trial. In a case where causation is the sole issue in dispute, for example, counter-affidavits would not be necessary. Or, a defendant might controvert cost but not necessity of treatment in a case where the plaintiff’s damages model is founded on inflated charges from otherwise typical post-accident treatment. The case-by-case analysis changes, however, in that In re Allstate confirms that defendants need not serve counter-affidavits in order to preserve the right to challenge reasonableness and necessity at trial, and that defendants may use one multidisciplinary expert to controvert cost of treatment.
 In re Allstate Indem. Co., No. 20-0071, 2021 Tex. LEXIS 375 at *20 (Tex. May 7, 2021) (internal quotations omitted) (citing Haygood v. De Escabedo, 356 S.W.3d 390, 397 (Tex. 2011)).
 Id. at *6-*7 (quoting trial court order).
 Id. at *19-*25.
 Id. at *21 (citing Beauchamp v. Hambrick, 901 S.W.2d 747 (Tex. App.—Eastland 1995, no writ) and its progeny).
 Id. at *20.
 Id. at *22-*23.
 554 S.W.3d 645 (Tex. 2018)
 In re Allstate Indem. Co., 2021 Tex. LEXIS 375 at *11 (quoting Tex. Ins. Code § 18.001(f)).
 Id. at *11-*12.
 Id. at *12; Gunn, 554 S.W.3d at 673.
 Id. at *15-*17.
 Id. at *17-*19.
 Id. at *12, n. 5 (citing Gunn for proposition that “medical providers are in the best position to determine what treatments or procedures, and resulting expenses, are necessary”); Tex. Civ. Prac. & Rem. Code § 18.001(b) (“The affidavit is not evidence of and does not support a finding of the causation element of the cause of action that is the basis for the civil action.”).
- Finally! Discovery Harassment of Top-Level Corporate Officers is Curtailed
- Limitations for Policyholders Seeking Coverage in Employment-Related BIPA Cases
- Vaccine Mandates in the Workplace Are Spreading
- The Death of Impartiality - "Dr. Death," Reptilian Tactics, and Fighting Juror Bias
- Considerations That Employers Should be Mindful of as Employees Return to the Office
- A Win for Policyholders Seeking Coverage in a BIPA Class Action Suit
- Reasonable Disagreement or Fraud? Competing Estimates of Property Damage in First Party Claims
- Malpractice Mayhem: An Insurer's Standing to Sue Counsel Retained to Defend Its Insured
- Prejudgment Interest Now a Reality in Illinois
- Florida NIL Legislation: What to Expect in the Coming Weeks
- Professional Liability
- Class Action
- Insurance & Reinsurance Litigation & Counseling
- Insurance Coverage
- Complex Commercial Litigation
- Cyber Risk & Liability
- Toxic Tort
- Professional Development
- Medical Negligence & Healthcare Liability
- Pharmaceutical & Medical Device Litigation
- Product Liability
- Social Media & Privacy
- Construction Litigation & Counseling
- Workers' Compensation
- Discrimination, Harassment & Hostile Workplace Claims
- Employment Litigation & Counseling