There are certain factual details in most cases that are vital to expert opinions. This includes what law applies to the case. The court decides what law applies, however the experts should know the standard against their opinions will be judged. A case in which I was recently involved highlights why that is important.
The case concerned an accident that happened in Texas between two commercial motor vehicles. To make an exceedingly long story short, the lawsuit was filed in Nevada and jurisdiction was proper. However, Nevada choice of law rules required that Texas law apply. This was one of the first rulings I obtained from the court for a reason, but opposing counsel did not seem to grasp the significance of that ruling until years later. In the end, getting your opponent out of their comfort zone (like by applying Texas law, not Nevada’s) can be advantageous.
Life Care Planning: Texas Style
As humans, we all have routines. However, if the rules of the game change (Texas law, not Nevada), then our routines must also change. If they do not, difficulties may arise, like motions to completely exclude a life care plan.
In this case, I had already changed the rules of the game because Texas law varies significantly from Nevada’s concerning the damages recoverable in a personal injury case. Texas Civil Practice and Remedies Code § 41.0105 states “recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.” The Supreme Court of Texas interpreted this statute in Haygood v. De Escabedo, concluding “this statute limits recovery, and consequently the evidence at trial, to expenses that the provider has a legal right to be paid.”
In Haygood the plaintiff received medical treatment for which his medical providers submitted bills that totaled “$110,069.12, but he was covered by Medicare Part B, which generally ‘pays no more for … medical and other health services than the ‘reasonable charge’ for such service.’” “Criteria for determining reasonable charges include customary charges for similar services and prevailing charges in the same locality for similar services.” Importantly, “[f]ederal law prohibits health care providers who agree to treat Medicare patients from charging more than Medicare has determined to be reasonable.” Of the $110,069.12 billed, plaintiff’s medical providers accepted just $27,739.43 as payment in full.
The Supreme Court concluded the plaintiff could not recover the list value of the medical charges billed. “To impose liability for medical expenses that a health care provider is not entitled to charge does not prevent a windfall to a tortfeasor; it creates one for a claimant….” Haygood concluded § 41.0105’s “actually paid and incurred” language “means expenses that have been or will be paid, and excludes the difference between such amount and charges the service provider bills but has no right to be paid.” Applied to the case, $27,739.43 was the total amount of past medical expenses that the plaintiff could recover.
Haygood also addressed an evidentiary question concerning those bills. The plaintiff “argues that even if section 41.0105 precludes recovery of expenses a provider has no right to be paid, evidence of such expenses is nonetheless admissible at trial.” However, like Nevada, irrelevant evidence is inadmissible. “This includes evidence of a claim of damages that are not compensable. Since a claimant is not entitled to recover medical charges that a provider is not entitled to be paid, evidence of such charges is irrelevant to the issue of damages.” It also concluded the evidence’s minimal probative value was outweighed by the danger of confusion. “[W]e think that any relevance of such evidence is substantially outweighed by the confusion it is likely to generate, and therefore the evidence must be excluded.” For practical purposes at trial “the jury should not be told that [the medical damages] will be covered in whole or in part by insurance. Nor should the jury be told that a health care provider adjusted its charges because of insurance.”
Haygood also noted this same logic had been previously applied to situations involving medical treatment paid by workers’ compensation insurance. In a prior case, the plaintiffs sought to recover “the full amount of their hospital expenses. The hospital was reimbursed part of those expenses by workers’ compensation insurance and was precluded from seeking payment of the unpaid balance from its patients by the Workers’ Compensation Act.” The court had concluded neither the hospital, nor the plaintiffs, could recover the full amount. “[A] recovery of medical expenses in that amount would be a windfall; as the hospital had no claim for these amounts against the patients, they in turn had no claim for them against” the defendant.”
In my case, the plaintiff’s past medical treatment had been in part covered by workers’ compensation insurance. Because the plaintiff was Medicare eligible, the other part had been paid by Medicare and it would also pay for the future treatment. The plaintiff disclosed an expert witness to provide opinion testimony about a life care plan projecting the cost of future medical treatment Plaintiff may require. The expert was deposed and conceded Plaintiff was Medicare eligible. However, the expert expressly refused to consider Medicare reimbursement rates in projecting the cost of the future medical treatment. She explained that the costs she projected were based upon a “usual and customary” standard, not the Medicare reimbursement rates. When asked why, she launched into a canned and incorrect explanation about how Medicare is a collateral source under Nevada law. Oops.
In Texas, Haygood concluded § 41.0105’s “actually paid and incurred” language “means expenses that have been or will be paid, and excludes the difference between such amount and charges the service provider bills but has no right to be paid.” By contrast, plaintiff’s life care planner in my case projected only expenses that would never have been paid because she refused (or was not told) to follow Texas law and project the Medicare reimbursement rates applicable to the medical treatment projected in her plan. As a result, the costs projected in the life care plan were unreliable because they were not a reflection of the expenses that would have been paid.
I moved to exclude the entire life care plan. I presume the life care planner never previously was told Texas law applied because, after my motion was filed, she miraculously produced a report that purportedly applied Medicare rates. This report was received less than two weeks before the anticipated trial date though, leading to another discussion about improper supplemental reports.
 356 S.W.3d 390, 391 (Tex. 2011).
 Id. at 392 (quoting 42 C.F.R. § 405.501(a)).
 Id. (citing 42 C.F.R. § 405.502(a)).
 Id. at 395.
 Id. at 396-97.
 Id. at 398.
 Id. at 400.
 Id. at 395 (citing Daughters of Charity Health Services of Waco v. Linnstaedter, 226 S.W.3d 409, 412 (Tex. 2007)).
 Id. (citing Daughters of Charity Health Services of Waco, 226 S.W.3d at 412).
 Id. at 396-97 (emphasis added).
 As an aside, by applying Texas law the past medical damages dropped from several hundred thousand to approximately $168,000. The future damages dropped from an average of approximately $400,000 to less than $200,000. Plaintiff apparently did not realize this until the very end of the case.