Authors
Past and future medical costs are often the largest element of economic damages in personal injury cases. In Texas cases, there is an important distinction between reasonable charges for medical services and the reasonable value of medical services.
An affidavit on the reasonableness of charges for past medical services filed by a plaintiff under the Texas Civil Practice and Remedies Code §18.001 is sufficient to support a jury finding unless the defendant serves a counter-affidavit by an expert. Regardless of whether the defendant serves a counter-affidavit or the trial court strikes the counter-affidavit, Section 18.001 does not affect the defendant’s ability to present expert testimony or other evidence at trial on the reasonable value or medical necessity of past medical services.
RPC usually determines the maximum reasonable charge for a medical service as the as the 75th or 80th percentile value of charges for the same services in the medical market. How we calculate the maximum reasonable charge is explained in the July 7, 2023, white paper Determining Usual, Customary and Reasonable Charges for Healthcare Services, available on the RPC website.
The language of §18.001 addresses the reasonableness of charges. The term “charges” is generally understood to refer to the amount billed by the practitioner and does not refer to the amount the practitioner receives as payment. This is different from the usual and customary rate (UCR) paid for a service. Even if the provider’s charge for a service is reasonable, the plaintiff is obligated to pay the provider only an amount equal to the reasonable value of the service, and the defendant, if liable, is obligated to pay the plaintiff only the reasonable value of the service. The plaintiff has the burden of proving the reasonable value of the services. A provider’s billed charges are not presumed to be the reasonable value.
A range rather than a single amount defines the reasonable value of specific services. RPC usually defines the upper end of the range as the maximum reasonable charge because this is the method some health plans use to set the allowed amount for out-of-network providers. RPC usually defines the lower end of the range as the allowed amount set by Medicare. Medicare rates are intended to cover the reasonable costs of a prudent provider to provide the service.
To determine the best estimate of the reasonable value of a specific service in a specific medical market, RPC usually looks to the negotiated rates of the plaintiff’s provider and those of other providers in the market. Relevant evidence is not limited to negotiated rates available to the plaintiff in a personal injury case. Several types of negotiated rates can be relevant:
- The negotiated rates available to an insured plaintiff for a specific provider, whether or not the plaintiff filed a claim with the insurer
- All negotiated rates the plaintiff’s provider had with health plans, whether or not the plaintiff had access to these rates
- All negotiated rates of health plans for the plaintiff’s specific service in the plaintiff’s medical market
The Texas Supreme Court has allowed defendants to discover provider contracts and negotiated rates from the plaintiff’s health plan as well as the plaintiff’s providers and the health plans with which they contract. Provider contract confidentiality and nondisclosure terms will not prevent discovery.
Texas court decisions on the reasonable value of medical services and information on the reasonable value defendants can obtain through discovery are discussed in our March 6, 2023, white paper, Damages for Past Medical Expenses in Texas Personal Injury Litigation.
RPC’s economists prepare §18.001 counter-affidavits and reasonable value reports that include comprehensive analysis of medical bills. We have databases and medical bill review software to apply coding edits efficiently and to reprice claims to UCR, Medicare, and workers’ compensation fee schedules. We help defense counsel draft discovery requests to the plaintiff’s medical providers and health plan to obtain data on negotiated rates.