The Texas Supreme Court’s recent opinion in In re Allstate Indemnity Company,¹ provides some needed and crucial clarification as to counteraffidavits under Texas Civil Practice and Remedies Code section 18.001(f).² With guidance from the state’s high court, every attorney handling personal injury cases will need to be familiar with the Supreme Court’s opinion and the ramifications it holds for personal injury practice moving forward.

Under Texas law, a party seeking to recover its past medical expenses must prove that the amounts paid or incurred are reasonable. Section 18.001 seeks to streamline proof of reasonableness and necessity of medical expenses, which must be proven by legally sufficient evidence. Section 18.001 provides an avenue for plaintiffs to submit to the jury the issue of the reasonableness of their medical expenses without bringing an expert to testify by serving a compliant affidavit made by the medical provider or the person in charge of records. In doing so, the initial affidavit is sufficient evidence to support a finding that the amount charged was reasonable.

A plaintiff who does not utilize section 18.001 must present expert testimony at trial as to the reasonableness of his medical expenses. Similarly, a defendant who serves a controverting affidavit under section 18.001(f) puts the reasonableness of the charges into question and requires the plaintiff to call experts live to prove up the reasonableness of the charges to the jury.

In the years since section 18.001 was enacted, debate has raged in the trial and appellate courts as to the proper qualifications of counteraffiants, the relationship between section 18.001 and an expert challenge under E.I. du Pont de Nemours & Co. v. Robinson, 923 S.W.2d 549 (Tex. 1995), and when a counteraffidavit is properly struck. Until now, the Supreme Court has not addressed the issue.

Background of Underlying Case

The plaintiff in a car accident case submitted initial affidavits pursuant to section 18.001 and the defense timely served a controverting affidavit from a registered nurse experienced in medical billing and coding. The counteraffidavit challenged the reasonableness of plaintiff’s medical providers’ charges. The plaintiff moved to strike the controverting affidavit and requested that Dickison be precluded from testifying about reasonableness of the medical charges. The trial court granted the motion to strike, finding that the counteraffiant lacked the proper expertise to provide a controverting affidavit, the counteraffidavit was unreliable, and the counteraffidavit failed to provide reasonable notice of the basis for controverting at trial. The trial court also prohibited the counteraffiant from testifying in the case and prohibited the defense “from questioning witnesses, offering evidence, or arguing to the jury the ‘reasonableness of the medical bills’ that [the plaintiff] has submitted by affidavit to date.”

The Supreme Court’s analysis focused on three key areas that the plaintiff argued the counteraffidavit was “wholly and fatally defective” before addressing whether mandamus relief was appropriate.

Counteraffiant Qualifications

The plaintiff argued that the counteraffiant was unqualified to testify in contravention of the initial affidavit, because she was not in the same field of medicine as the initial affiant. But the Supreme Court’s opinion makes clear that a counteraffiant need not be a M.D. or person in the same position as the medical provider who made the initial 18.001 affidavit.

The plaintiff argued that the counteraffiant lacked the proper expertise to controvert the reasonableness of the charges in Plaintiff’s affidavits. But the counteraffidavit noted the counteraffiant’s “extensive education and training,” including “twenty-one years of experience in healthcare, including twelve years reviewing medical bills, during which she further developed an understanding of medical documentation and medical billing practices.” The Supreme Court disagreed with the plaintiff’s position that reasonableness of charges “can be challenged only by someone who is in the same field of medicine.” The counteraffiant’s experience in the medical field, with billing and coding, and “using a nationwide database that compiles the amounts charged for the same medical services or devices identified in the initial affidavits through standardized codes” qualified her to testify as to the reasonableness of the medical expenses at issue. What is key is that the affiant demonstrate his qualifications to controvert expenses: “even non-doctors could provide expert testimony on a specific medical issue, provided that the offering party establishes the expert’s knowledge, skill, experience, training, or education regarding the specific issue.”

In a footnote, the Court noted that its opinion could also be applied to whether certain treatments or procedures were necessary. While the Court refrained from expansive detail, the Court did write that while “medical providers ‘ideally’ would be the ones to testify about . . . whether a particular course of treatment was necessary under the relevant standard of care, . . . ‘the ideal paradigm does not reflect today’s complex health care system,’ and the reality of our health care system does not require that testimony about the necessity of medical expenses be limited to medical providers.”

Reasonable Notice

What constitutes “reasonable notice” has been the subject of numerous motions to strike 18.001(f) counteraffidavits. In this case, the trial court found that the counteraffiant failed to provide reasonable notice of the basis for controverting at trial because (1) she did not show that she was familiar with or knowledgeable about the medical services at issue and (2) using the median charge for a particular service in a specified geographical area as the litmus test for opining whether an expense is reasonable was a conclusory opinion.

The Supreme Court noted that neither of the trial court’s two grounds for striking the counteraffidavit was proper grounds for striking the counteraffidavit. The Supreme Court wrote in no uncertain terms: “section 18.001 does not charge trial courts with determining the admissibility of an affiant’s opinions, and a trial court’s doubts about admissibility are not a proper basis for striking a section 18.001 counteraffidavit.” (emphasis added).

In determining how to assess what constitutes “reasonable notice,” the Court looked to the “fair notice” pleading standard of Rule 47: a counteraffidavit provides reasonable notice if the opposing party can ascertain from the counteraffidavit “the nature and basic issues in controversy and what testimony will be relevant,” or in other words, if the opposing party is given “sufficient information to enable that party to prepare a defense or a response.”

The counteraffidavit in question “unquestionably” satisfied the reasonable notice requirement because it itemized each controverted charge and explained in detail the basis for the challenge to each charge. The counteraffidavit’s “comparison of the charges set forth in the initial affidavits with the median charges for those same services during the same timeframe and in the same zip code” using a national database met the reasonable notice requirement.

Reliability

Plaintiffs seeking to strike 18.001 counteraffidavits frequently assert challenges to the reliability of the counteraffiant’s opinions similar to a motion to strike an expert witness. The Supreme Court soundly rejected the notion that a counteraffiant’s opinion must rise to the level of admissibility under E.I. du Pont de Nemours & Co. v. Robinson: “Nothing in the text of section 18.001(f) requires that an opinion expressed in a counteraffidavit must meet the admissibility requirements for expert testimony.” The plain text of section 18.001 “focuses not on the substance of the testimony, but only on the qualifications of the affiant.” The Court further clarified that a witness’ qualifications to provide expert testimony is a distinctly different inquiry from whether such testimony is reliable. Similarly, the “reasonable-notice standard does not require a court to assess reliability of the expert’s opinions under Rule 702 or Robinson.” It was error for the trial court to import a reliability requirement into a section 18.001 analysis.

Lessons if no Counteraffidavit or if Counteraffidavit is Properly Struck

One of the main issues with the trial court’s decision was regardless of the above-described errors, the trial court “overcorrect[ed]” in prohibiting the counteraffiant from testifying at trial and prohibiting the defense from “questioning witnesses, offering evidence, or arguing to the jury the ‘reasonableness of the medical bills’” in the plaintiff’s initial affidavits. The reason is simple enough: “section 18.001 is a ‘purely procedural’ statute.” Even if a section 18.001 affidavit goes uncontroverted, “nothing in section 18.001 even suggests an uncontroverted affidavit may be conclusive on reasonableness and necessity.” (emphasis in original). Regardless of whether a controverting affidavit is served (of if a counteraffidavit is struck), the defense is still able to challenge reasonableness and necessity at trial.

The Court distinguished and overruled previous opinions of several Texas intermediate appellate courts that construed section 18.001 as an “exclusionary” and “death penalty” statute. These intermediate courts had previously held that when a section 18.001 counteraffidavit was struck for not complying with section 18.001(f), the party serving the counteraffidavit was precluded from presenting any other evidence at trial to oppose the reasonableness or necessity of the medical expenses in the initial affidavit. It was an abuse of discretion for the trial court to prevent the defense from introducing its own evidence to contradict the reasonableness of the plaintiff’s medical expenses or from questioning witnesses or arguing to the jury about the reasonableness of the plaintiff’s medical specials.

Availability of Mandamus Relief

The trial court’s order in this case was not a “routine evidentiary ruling” because it precluded the defense “from engaging in meaningful adversarial adjudication” of the plaintiff’s claim for payment of her medical expenses. The fact that the defense could still challenge liability or other elements of the plaintiff’s claims, or “present different, possibly less compelling, arguments,” according to the Supreme Court, “does not minimize the crippling effect” of the trial court’s restrictive order on the defense’s ability to challenge the reasonableness of the medical expense charges. Reasonableness is “a central component of [a plaintiff’s] claimed damages,” so mandamus was appropriate.

The Supreme Court cautioned that mandamus may not be the appropriate vehicle in every case where a trial court mistakenly strikes a section 18.001 counteraffidavit. In a footnote, the Court left the door open for later proceedings to draw the line as to when mandamus relief is and is not appropriate. The Court noted mandamus was proper here “given the expansive relief granted by the trial court’s order.” However, it remains to be seen how appellate courts will assess less detailed orders, or orders that simply strike counteraffidavits in contradiction of the qualification, reliability, and reasonable notice standards articulated by the Supreme Court in this case.

Endnotes