Skip to content
Mar 19, 2018

Houston First Court of Appeals Rejects Attempts to Limit Future Damages in Health Care Liability Claims

By: Diana Faust

Recently, the First Court of Appeals examined two issues of first impression and, through its holdings, rejected the defendants’ attempt to limit recovery of future medical expenses in a health care liability claim under Texas law.  The court also followed the Second Court of Appeals’ interpretation of the emergency medical care provision to preclude application of the willful and wanton standard of proof for an unforeseen obstetrical emergency.  While the Supreme Court of Texas just granted review of the Second Court of Appeals’ interpretation last week, the future medical expenses holdings also provide more than a sufficient basis for review by the Texas Supreme Court.

Glenn v. Leal, ___ S.W.3d ___, 2018 WL 1095184 (Tex. App.—Houston [1st Dist.] Mar. 1, 2018, no pet. h.), involved appeal following an adverse verdict on claims alleging obstetrical negligence in response to shoulder dystocia during labor and delivery.  Trial evidence revealed the shoulder dystocia was unforeseeable.  The patient received prenatal care from the defendant obstetrician, who also delivered the child.  The child claimed permanent brachial plexus injury as a result of the obstetrician’s care and treatment during delivery. 

The court first addressed whether the obstetrical emergency arising during the course of labor and delivery should have been governed by the willful and wanton negligence standard of proof, pursuant to section 74.153 of the Civil Practice and Remedies Code, where the patient was induced in the obstetrical unit of the hospital without first having been evaluated or treated in the emergency department.  The provision provides a heightened standard of proof for claims arising out of:

emergency medical care in a hospital emergency department or obstetrical unit or in a surgical suite immediately following the evaluation or treatment of a patient in a hospital emergency department. . .

The defendants argued that “immediately following the evaluation or treatment of a patient in a hospital emergency department” modified only “in a surgical suite.”  Without any interpretation of its own, the First Court merely followed the interpretation of section 74.153 given by the Second Court of Appeals in D.A. v. Texas Health Presbyterian Hosp. of Denton, 514 S.W.3d 431, 432 (Tex. App.—Fort Worth 2017, pet. filed).  Notably, as mentioned, the Supreme Court of Texas granted review of the Texas Health case on Friday, March 16, 2018. 

The First Court’s interpretation was that the statute requires that, “before treatment in either a hospital emergency department, an obstetrical unit, or a surgical suite would trigger application of the statute [section 74.153], there first must be ‘evaluation or treatment of a patient in a hospital emergency department.’”  Thus, the court applied the phrase to each location in the statute: a hospital emergency department, an obstetrical unit, and a surgical suite.  

While the defendants argued such an interpretation was erroneous under the rules of interpretation, and that its application effectively gutted the Legislature’s intent for hospital emergency department claims (because all initial evaluation and treatment in the hospital emergency department – such as triage – would no longer be covered under the emergency medical care provision), the court failed to address these arguments.  Instead, the court concluded that, when the patient’s treatment began as an elective induction in the obstetrical unit by her treating physician and then developed into an emergency during the course of the delivery, section 74.153 and its heightened requirement of willful and wanton negligence does not apply.  All these issues will be addressed by the Supreme Court of Texas through the Texas Health matter. 

Other issues addressed by the First Court have not yet been considered by the Supreme Court of Texas.  First, the court also held that a claimant was not required to address the impact of section 41.0105 on the recovery of future medical expenses.  Section 41.0105 provides,

In addition to any other limitation under law, recovery of medical or health care expenses incurred is limited to the amount actually paid or incurred by or on behalf of the claimant.

Tex. Civ. Prac. & Rem. Code Ann. § 41.0105.  Recall that the Texas Supreme Court has explained that “actually paid and incurred” 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.  Haygood v. De Escabedo, 356 S.W.3d 390, 396-97 (Tex. 2012).  Haygood made clear that, 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.  Id. at 398.

Relying on this interpretation, defendants argued that the award of future damages was supported by legally insufficient evidence that failed to address the expenses that will be paid in the future, considering what providers might be entitled to recover if there are discounts or agreements limiting what they can charge.  Rather, the Leals presented evidence of future damages based on what providers charged for the services at issue at the time of trial.  In rejecting the argument, the First Court first explained that there was no evidence of any applicable law or contractual agreement limiting the amount providers could charge for medical expenses in the future, and to assume the amounts were beyond the amount of future medical bills would be speculative.  The court also found it important that the jury was asked to fairly and reasonably compensate for those expenses. 

The First Court further explained that, because services for future medical expenses have not yet been rendered, “without evidence of future discounts, whether there will laws in place limiting what the providers can charge when the services are, in fact, rendered, or whether the Leals will have insurance coverage at all,” the defendants failed to demonstrate that the evidence supporting the jury’s award for future medical damages is legally insufficient. 

And finally, the First Court rejected the defendants’ argument that the evidence of future medical expenses should have addressed the impact of the Patient Protection and Affordable Care Act (ACA).  The court concluded that, because the ACA does not require an individual to purchase insurance, there can be no assumption that a claimant will have insurance coverage in the future, and, in particular, coverage for the specific items included in the future medical expenses awarded.  Thus, there can be no requirement that a claimant show the amount that will be incurred with such required insurance.

In this author’s opinion, while it did not expressly state it, the First Court of Appeals improperly placed the burden on the defendants to present evidence of the amount of medical expenses that will be paid or incurred in the future, through evidence of contract or law limiting the amount of recovery in the future.  The court rejected application of section 41.0105 to recovery of future medical expenses, despite Haygood’s pronouncement that a claimant is not entitled to recover medical charges that a provider is not entitled to be paid and that evidence of such charges is irrelevant to the issue of damages.  While section 41.0105’s requirements undoubtedly apply to past medical expenses, the Glenn court determined it made no difference in the recovery of future medical expenses—or, if it did, defendants were required to demonstrate that difference by developing the evidence when the plaintiffs did not.  And, the same is true for any impact under the ACA. 

The defendants have the opportunity to seek rehearing in the First Court of Appeals or to request that the Supreme Court of Texas review these damages issues.  Stay tuned.