Firm Newsletter - March 2016

Photo by Maudib/iStock / Getty Images

Photo by Maudib/iStock / Getty Images

Are You Still on the Hook?

In 2015, the Fourteenth Court of Appeals ruled on a worker’s compensation nonsubscriber case, finding that the evidence was sufficient to support the jury’s verdict. There were multiple issues that the court discussed. One of the issues was whether the trial court erred on the admission of the full amounts of the Plaintiff’s medical bills rather than the actual amounts received by the medical providers.

Favalora was working on a manufacturing line. During his shift, he was hit in the chest with large gauge wire which caused him to fall. The wire was manufactured by Katy Springs. As a result of the fall, Favalora began to feel pain in his chest and neck. He presented to an urgent care facility and then was transferred to a hospital where he was diagnosed with a chest contusion, neck sprain, and cervical radiculopathy. Favalora endured long term issues as a result of the accident. He had chronic neck pain and numbness in his arm. Eventually, a doctor recommended that he have surgery. After failed conservative treatments including injections and prescriptions, Favalora had the cervical surgery.

Favalora sued Katy Springs for negligence. The jury found in favor of Favalora and awarded him past medical expenses, loss of earning capacity, and past and future physical pain, impairment and mental anguish. Katy Springs then challenged the trial court’s ruling on a number of issues one of which was the admission of medical billing affidavits. They allege that the trial court admitted the affidavits with the full amounts charged by the medical providers rather than the discounted amounts that the provider actually received. Katy Springs explains that Favalora’s medical providers had sold the accounts receivable at a discounted rate to MedStar Funding. Katy Springs argues that Favalora can only recover the amount that the medical providers “have a right to be paid” which they claim is the amount for which MedStar purchased the accounts not the full amount of expenses billed.

However, the Court of Appeals disagrees. The court explains that there is no evidence of any contract that prohibits the medical providers or MedStar from charging Favalora the full value of the medical services that were rendered. Thus, the evidence suggests that Favalora remained on the hook for the full value of services provided to him. The court explained further that Med- Star is the contractual assignee of the medical providers and as such “An assignee un-der Texas common law stands in the shoes of his assignor.” See Sw. Bell Tel. Co. v. Marketing on Hold Inc., 308 S.W. 3d 909, 920 (Tex. 2010). As a result, the assignee obtains the full rights of the assignor. Be-cause MedStar has valid contractual assignments, they “have the same ability to pursue the claims” of the medical providers under Texas law. The court of appeals held that when the claimant remains liable for the amounts originally billed by the medical provider, those amounts are recoverable medical expenses under section 41.0105 and thus the evidence showing the total billed amounts were admissible at trial.

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