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The Tyler Court of Appeals clarifies Texas Civil Practice and Remedies Code Section 18.001 and More

Author: Mark Craig and Kent Williamson, Head of the Insurance Defense Section

The Tyler Court of Appeals clarifies Texas Civil Practice and Remedies Code Section 18.001 and Controverting Medical Cost Affidavits

For decades, Texas defense attorneys have struggled with how to adequately challenge the “reasonableness” of medical expenses alleged by personal injury plaintiffs in litigated matters. This issue is the result of the 1985 Texas Legislature’s effort to streamline civil personal injury trials and pre-trial discovery, by enacting legislation which was codified as Civil Practice and Remedies Code, Chapter 18.001. Chapter 18.001 allows the plaintiff to prove-up the “reasonableness” of the medical expenses alleged by simply filing an affidavit with the court from “the person providing the services, or a person in charge of the records showing the services provided, and the charges made”. Essentially, the plaintiff can prove the reasonableness of hundreds of thousands of dollars in medical expenses with the affidavit of a records custodian. Conversely, if the defendant takes exception to the reasonableness of the expenses appearing in the affidavit, the defendant’s recourse is to file a counter-affidavit within 30 days of receipt of the plaintiff’s affidavit. However, Chapter 18.001 shifts the burden, and the defendant must demonstrate the affiant in the counter-affidavit is “qualified” by knowledge, skill, training and/or experience to testify in contravention of the amounts contained in the plaintiff’s affidavit.

The determination of who is “qualified” to testify by counter-affidavit has plagued defense counsel since the statute was enacted, as there has been a lack of uniformity of opinions by the various Texas appellate courts on this issue. However, a recent decision by the Tyler Court of Appeals may give counsel some comfort. In re Brown, involves a personal injury suit for damages sustained in a car accident. In the underlying proceeding, the defense counsel submitted counter-affidavits from a registered nurse under Chapter 18.001, regarding the reasonableness and necessity of the medical treatment received by the injured plaintiff. The plaintiff filed a Motion to Srike the counter-affidavits on the grounds that: (1) the nurse’s opinions lacked a reliable foundation or factual basis; (2) nurse was unqualified as an expert, was not a practicing nurse, and relied on opinions obtained from a database rather than her own training, expertise, or experience; (3) the nurse had been previously struck in other cases; and (4) the nurse offered no facts, treatises, or medical studies to show the reliability or acceptance by the medical community of the database upon which she relied. The trial court granted the motion to strike on the grounds the nurse was unqualified and, therefore, her opinions were unreliable. In turn, the defendant filed a mandamus proceeding.

The Tyler Court of Appeals held the trial court abused its discretion by striking the counter-affidavits. The appellate court specifically noted the nurse in question had been licensed since 1995; worked in case management and claims analysis for insurance companies beginning in 1999, which required her to maintain databases for medical costs; and was familiar with medical coding and billing practices. The appellate court, relying upon the Texas Supreme Court’s decision in Gunn v. McCoy, 554 S.W. 3d 645, 674-75 (Tex. 2018), which addressed the issue of whether insurance subrogation agents are qualified to use their databases to create 18.001 Affidavits, held that the nurse in question can rely on the information contained in her databases in arriving at the opinions which were contained in her affidavits; and her opinions as to the reasonableness of the medical expenses are reliable.

The defendants in the mandamus proceeding also argued they would be prevented from presenting evidence at trial “concerning the reasonableness of medical expenses when a counter-affidavit is struck.” Even though the court of appeals opinion stated, “we generally do not grant a petition for writ of mandamus based on the exclusion of evidence,” the appellate court agreed with the defendants and held that exclusion of the affidavits could result in the rendition of an improper judgment. The court also found that mandamus would prevent the trial from being a waste of time, money and resources. Accordingly, the court conditionally granted the writ of mandamus and directed the trial judge to vacate his original order striking the counter-affidavits.

This recent decision, coupled with the Texas Supreme Court ruling in Gunn, provides practitioners with guidance as to who is qualified to issue counter-affidavits under Chapter 18.001, and what evidence can be reasonably relied upon in forming the opinions contained in the affidavits. As mentioned above, section 18.001 (c)(2)(B) permits the plaintiff to utilize a records custodian (non-expert) to prove-up the reasonableness of the medical charges, Section 18.001 (f) requires that a counter-affidavit must be made by a person “qualified” to testify in contravention about the figures contained in the plaintiff’s affidavit. While these two opinions do not relieve the defendant of the higher burden of demonstrating the counter-affiant is “qualified” to testify in the counter-affidavits, they take a significant step in clarifying who may be deemed to be qualified to provide opinions on the reasonableness of medical expenses by counter-affidavit.