Medical Billing Expert Witness Testimony Allowed

Medical billing experts are important witnesses for both plaintiffs and defendants. Courts routinely recognize that medical billing experts can give relevant testimony that satisfies the Daubert standard of admissibility. A recent case before a federal judge in Texas illustrates why the testimony of medical billing experts is admissible.

In Cornejo v. EMJB, Inc. , Richard Cornejo and his wife sued the driver of a tractor-trailer and the company that owed the vehicle. The Cornejos alleged that the truck driver was in the middle lane of a freeway when he made an unsafe lane change, striking the car that Richard Cornejo was driving. Richard’s wife was a passenger in that car. Both plaintiffs alleged that they sustained severe injuries because of the truck driver’s negligence.

The Cornejos contended that the truck driver committed gross negligence by operating a cellphone at the time of the collision. Phone records established that a 39-minute call coincided with the time of the accident. The court decided that the evidence of gross negligence was sufficient to present a jury issue. The more significant question before the court was whether to admit the testimony of the defendants’ medical billing expert.

Texas law includes a unique procedure that governs the proof of reasonableness of medical bills. That procedure requires a plaintiff to submit proof of medical billings by affidavit. If the defense challenges the reasonableness of the billings, it must do so by counter-affidavit. That procedure, however, does not apply when the lawsuit is brought in federal court. Presumably for that reason, the Cornejos did not submit an affidavit regarding their medical expenses.

During discovery, the Cornejos disclosed the past and future medical expenses that they incurred as a result of the collision. They obtained chiropractic and pain management treatment from TriCity Pain Associates. They proposed to enter into evidence a billing for those services rendered in the amount of $68,000. The defendants’ medical billing expert submitted a report explaining that the reasonable value of the services rendered should not exceed $3,000.

The Cornejos also intended to introduce evidence of their need for future spinal surgeries. They intended to offer evidence that they would be billed about $300,000 for all costs associated with the surgeries. The defendants’ medical billing expert testified that the reasonable cost of the surgeries is less than $22,000.

The Cornejos did not submit any of their billings to an insurance company for payment. Given their self-pay status, their liability for payment of the bills is evidence that the bills are reasonable under Texas law. However, defendants are entitled to challenge the reasonableness of the bills.

The Cornejos filed a Daubert motion to exclude the testimony of the defendants’ medical billing expert. Federal Rule of Evidence 702 requires judges to determine whether proposed expert testimony is both relevant and reliable. The Daubert standard of reliability requires an expert to be qualified to give an opinion in a specialized area of knowledge and to base that opinion on a reliable methodology that the expert reliably applies to sufficient facts.

The court had little difficulty concluding that the expert was qualified to testify. He had a master’s degrees in healthcare administration (MHA), health services (MHS), and business administration (MBA). He conducts medical billing reviews as part of his work with the Texas Medical Foundation. 

The Cornejos objected that the witness has no expertise in pain management or orthopedic medicine. The Cornejos confused the question whether treatment is necessary with whether fees charged for that treatment are reasonable. The necessity of treatment is usually established through the testimony of the plaintiff’s treating physician. The defense is free to call medical witnesses to challenge that testimony, but their medical billing expert did not speak to the issue of necessity. He was retained solely to testify about the reasonableness of the fees charged.

A medical billing expert need not be a physician who practices in the same field of medicine as the providers of the billed services. In fact, the court recognized that a medical billing expert need not be a physician at all. The court noted that “nonphysicians can provide expert testimony on medical costs, so long as they have access to and experience with billing databases that provide the basis for their opinions.” The court noted that medical billing experts are often in a better position to testify about the reasonableness of costs than physicians, who typically focus on their own practice and are unfamiliar with the fees charged by other physicians for similar services.

The court determined that the defense expert’s methodology was reliable. The billing expert consulted reimbursement rates paid by several insurance companies, as well as reimbursement rates paid by Medicare, for the services that were or will be provided to the Cornejos. The expert also consulted a billing database to determine the average fees paid to providers for services that were identified by the same CPT code as services for which the Cornejos seek damages.

The most relevant objection advanced by the Cornejos was that the expert drew data from his own database of fees charged in the San Antonio area, while the services were or will be provided in the Dallas-Fort Worth area. Since both geographic areas are within Texas, the court held that the discrepancy went to the credibility of the testimony rather than its admissibility. Most medical billing experts, however, avoid that problem by relying on commercial databases that allow them to pinpoint the cost of services with the zip code where the services were delivered.

The court concluded that Daubert factors applicable to scientific research — whether the results of a methodology have been replicated, whether the results have been peer reviewed, whether there is a known error rate — do not apply to the “straightforward” methodology used by medical billing experts. The court concluded that the comparison of fees charged to a database of fees is a reliable way to determine reasonableness of medical charges. Whether the database is adequate might implicate the sufficiency of the data upon which the expert relies, but the court concluded that arguments about the adequacy of the database could be addressed on cross-examination. The court therefore admitted the testimony of the medical billing expert.