A federal court decision demonstrates why defendants are entitled to use medical billing experts to challenge the reasonableness of hospital and chiropractic bills in a personal injury case. The evidence was needed to counter a doctor’s opinion that medical bills were reasonable.
Jessica Perez alleged that she was driving with her children when a tractor-trailer changed lanes and crashed into her vehicle, injuring Perez and her children, She sued the driver and his employer for negligence. The case was removed to a federal district court in Texas.
In her complaint, Perez alleged that she suffered permanent physical injuries, including disfigurement, as well as continuing mental anguish. Her request for damages included past and future medical expenses, past and future pain, suffering, and mental anguish, lost wages and diminished earning capacity, loss of household services, and the cost of future medical monitoring.
Perez designated a treating neurosurgeon as a non-retained expert. Her summary of the neurosurgeon’s testimony included his “medical diagnosis, prognosis and the reasonable and necessary cost of hospital, doctor and medical bills for treatment of [Perez’s] injuries in the past and in the future.”
Treating Physician’s Testimony About Medical Bills
In his deposition, the neurosurgeon testified that the medical treatment he provided to Perez was necessary and that various charges were reasonable, including the hospital and surgical bill, a chiropractic bill, and a bill for post-surgery treatment provided by a medical center.
The defense made a strong showing that the neurosurgeon could not provide admissible testimony about the reasonableness of the medical bills. The neurosurgeon admitted that he did not review the bills line-by-line but based his reasonableness opinion on “the totality of the charges” and not their itemization. Many courts would regard the failure to scrutinize the bills as an unreasonable expert methodology.
The neurosurgeon also testified that he did not review the chiropractic or medical center treatment records and simply assumed that the care provided in the medical center was related to the accident. Many courts would reject the neurosurgeon’s opinion as to the reasonableness of charges when he made no effort to determine the nature of the care that was rendered.
The court accepted the neurosurgeon’s testimony that “in his role as a treating physician he regularly reviews and is familiar with charges for other treatment,” including chiropractic and medical center care. The court decided that a jury should determine whether the neurosurgeon’s testimony about reasonableness was credible. Other courts in similar situations have barred a physician’s testimony about the reasonableness of charges that are not based on specific data about usual, customary, and reasonable charges for specific services in the community where the services were provided.
Defendant’s Medical Billing Expert Witness
Faced with a court decision that allowed a treating physician to testify about the reasonableness of medical expenses, the defense turned to a medical billing expert to provide competing testimony. Perez filed a Daubert motion to exclude that testimony.
The medical billing expert explained that she reviewed medical and billing records from five of Perez’s medical providers. She compared the medical providers’ billing and coding with the medical documentation “to determine if the coding was properly applied” using standard CPT codes.
To determine whether the charges were reasonable within the zip code where services were provided on specific dates, she used a database. The database is one of many similar sources of information about actual charges that appear in billings by healthcare providers during specific timeframes and within specific zip codes.
The database allowed the billing expert to determine the median charge (or 50th
percentile) for the specific CPT code — that is, the median value “for that same service
in the same given area on the same date of service.” The expert also relied upon the
Texas Price Point website for inpatient usual and customary charges in 2017, using the median charge for hospitals in the county where the medical services were provided.
Perez moved to strike the medical billing expert as a witness on three grounds: her alleged lack of qualifications, the absence of foundation for her opinions, and the lack of relevance. The court rejected each of those arguments and admitted the billing expert’s testimony.
The court determined that the defense expert was qualified to give expert testimony. Her extensive training and experience evaluating medical charges satisfied the federal standard. In the words of Rule 702 of the Federal Rules of Evidence, the expert’s “skill, experience, training, or education” gave her “technical or other specialized knowledge” that would help the jury “understand the evidence” and “determine a fact in issue” — the reasonableness of Perez’s medical bills. Her training gave her knowledge of medical coding and medical billing audits that would help lay jurors, who typically lack that knowledge, return an informed verdict.
The court rejected the argument that the expert was not truly an expert because she was not a doctor. Her expertise was in medical bill coding and auditing, not in medicine. She did not need a degree in medicine to be a medical billing expert.
The court also rejected the argument that the medical billing expert had no specialized knowledge because she gathered her information from databases. Experts typically rely on data that they gather from reliable sources. To understand and select data from the database, a medical billing expert must be “proficient in the use of CPT codes, the use of CPT modifiers, billing interpretation, and the different medical fee schedules.” A medical billing expert’s methodology requires expertise that goes beyond procuring data from databases.
Reliability of Defendant’s Medical Billing Expert Opinions
The court rejected the contention that the expert did not establish her reliance on relevant data because she did not personally develop that database from which she extracted data. Experts routinely rely on databases to form opinions. Other experts in the field of medical billing analysis regard databases as reliable sources of information.
The court also disagreed with the argument that the medical billing expert did not use a reliable methodology. The expert explained that her methodology “requires her to evaluate Plaintiff’s medical billing records and compare them to nationwide CPT codes,
apply her expertise to determine whether medical documentation supports those
charges, and evaluate the manner of billing by those providers.” Because the billing expert based her opinions on a reliable methodology, her testimony was admissible.