in Re North Cypress Medical Center Operating Co., Ltd.

CourtTexas Supreme Court
DecidedNovember 16, 2018
Docket16-0851
StatusPublished

This text of in Re North Cypress Medical Center Operating Co., Ltd. (in Re North Cypress Medical Center Operating Co., Ltd.) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
in Re North Cypress Medical Center Operating Co., Ltd., (Tex. 2018).

Opinion

IN THE SUPREME COURT OF TEXAS ══════════ No. 16-0851 ══════════

IN RE NORTH CYPRESS MEDICAL CENTER OPERATING CO., LTD., RELATOR

══════════════════════════════════════════ ON PETITION FOR WRIT OF MANDAMUS ══════════════════════════════════════════

Argued November 9, 2017

JUSTICE LEHRMANN delivered the opinion of the Court, in which JUSTICE JOHNSON, JUSTICE BOYD, JUSTICE DEVINE, JUSTICE BROWN, and JUSTICE BLACKLOCK joined.

CHIEF JUSTICE HECHT filed a dissenting opinion, in which JUSTICE GREEN and JUSTICE GUZMAN joined.

Our procedural rules allow broad discovery of unprivileged information that is “relevant

to the subject matter of the pending action.” TEX. R. CIV. P. 192.3(a). This includes information

that may ultimately be inadmissible at trial so long as it “appears reasonably calculated to lead to

the discovery of admissible evidence.” Id. The “subject matter” of the underlying action, which

involves the enforceability of a hospital lien securing payment of charges for services rendered to

an uninsured patient, encompasses the reasonableness of those charges.

The trial court’s order at issue in this mandamus proceeding requires the defendant hospital

to produce information regarding its reimbursement rates from private insurers and public payers

for the services it provided to the plaintiff. The hospital argues those reimbursement rates are irrelevant to whether its charges to the uninsured plaintiff were reasonable and that the trial court

therefore abused its discretion in ordering production of that information. We disagree. The

reimbursement rates sought, taken together, reflect the amounts the hospital is willing to accept

from the vast majority of its patients as payment in full for such services. While not dispositive,

such amounts are at least relevant to what constitutes a reasonable charge. Accordingly, we deny

the hospital’s petition for writ of mandamus.

I. Background

Crystal Roberts was involved in an automobile accident on June 9, 2015, and was taken by

ambulance to the emergency room at North Cypress Medical Center. North Cypress released

Roberts approximately three hours later after performing a series of x-rays, CT scans, lab tests,

and other emergency services. Because Roberts was uninsured, North Cypress billed her for the

services at its full “chargemaster” prices, which totaled $11,037.35. North Cypress also filed a

hospital lien in the amount of the cost of its services, minus payments and adjustments credited to

Roberts’ account. See TEX. PROP. CODE § 55.002(a) (“A hospital has a lien on a cause of action

or claim of an individual who receives hospital services for injuries caused by an accident that is

attributed to the negligence of another person.”).

The liability insurer of the driver at fault offered to settle the case for $17,380, attributing

$9,404 to medical expenses stemming from North Cypress’s services. Roberts sought reduction

of North Cypress’s bill, and the parties negotiated but could not reach an agreement on the bill’s

amount.1 Roberts sued, seeking a declaratory judgment that North Cypress’s charges were

1 Roberts initially requested that the bill be reduced to $3,500, which she characterized as “the reasonable and necessary charges . . . for the treatment received based on the geographic area and similarly sized facilities.” North Cypress offered to reduce the bill to $8,278.31, and Roberts countered with $6,269.33. North Cypress declined.

2 unreasonable and its lien invalid to the extent it exceeds a reasonable and regular rate for services

rendered.2 North Cypress counterclaimed on a sworn account for $8,278.31, the amount to which

it had previously offered to reduce its bill.

Roberts served requests for production and interrogatories on North Cypress, including the

following:

 Please produce all contracts regarding negotiated or reduced rates for the hospital services provided to Plaintiff in which Defendant is a party, including those with Aetna, First Care, United Healthcare, Blue Cross Blue Shield, Medicare, and Medicaid.

....

 Please produce the annual cost report you are required to provide to a Medicare Administrative Contractor Medicare [sic], as a Medicare certified institutional provider for 2011, 2012, 2013, 2014 and 2015.

 Please state the Medicare reimbursement rate for x-rays, CT scans, lab tests and emergency room services, as you performed on the Plaintiff on June 9, 2015.

 Please state the Medicaid reimbursement rate for x-rays, CT scans, lab tests and emergency room services, as you performed on the Plaintiff on June 9, 2015.

North Cypress objected to these discovery requests and moved for a protective order, asserting

that they sought irrelevant information and were overly broad. Roberts filed a corresponding

motion to compel. In an oral ruling on the record, the trial court ordered North Cypress to produce

2 Roberts also asserted claims for fraudulent lien filing and for violations of the Texas Deceptive Trade Practices Act and the Texas Debt Collection Act. She further claimed that the lien is invalid because she was never formally admitted to the hospital. These claims are not relevant to the instant discovery dispute.

3 the requested information, though the court narrowed the scope to include only contracts “that

cover the [time] period at issue in this case.”

North Cypress moved for reconsideration, reiterating its relevance objection and adding

that it would “suffer irreparable harm” from the disclosure of its “confidential and proprietary”

negotiated insurance contracts. The trial court denied the motion, prompting North Cypress to file

a petition for writ of mandamus in the court of appeals. The court of appeals denied the petition,

and North Cypress now seeks mandamus relief in this Court.

II. Analysis

Mandamus is an extraordinary remedy granted only when the relator shows that the trial

court abused its discretion and that no adequate appellate remedy exists. In re Prudential Ins. Co.

of Am., 148 S.W.3d 124, 135–36 (Tex. 2004). “The trial court abuses its discretion by ordering

discovery that exceeds that permitted by the rules of procedure.” In re CSX Corp., 124 S.W.3d

149, 152 (Tex. 2003). We address North Cypress’s two challenges to the discovery order in turn.

A. Relevance

North Cypress first argues that information about reimbursement rates from insurers and

government payers is not relevant to Roberts’ claims about the enforceability of its hospital lien.

See TEX. R. CIV. P. 192.3(a) (parties may obtain discovery of information that is “relevant to the

subject matter of the pending action”). Evidence is “relevant” if “it has any tendency to make a

fact [of consequence to the action] more or less probable than it would be without the evidence.”

TEX. R. EVID. 401. And as noted, evidence need not be admissible to be discoverable so long as

it “appears reasonably calculated to lead to the discovery of admissible evidence.” TEX. R. CIV.

P. 192.3(a).

4 Because the subject matter of this action involves a dispute over a hospital lien, in

evaluating the relevance of the requested information we must begin with a discussion of Texas’s

hospital-lien statute, codified in Texas Property Code chapter 55. This statute provides hospitals

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In Re CSX Corp.
124 S.W.3d 149 (Texas Supreme Court, 2003)
In Re Prudential Insurance Co. of America
148 S.W.3d 124 (Texas Supreme Court, 2004)
Daughters of Charity Health Services of Waco v. Linnstaedter
226 S.W.3d 409 (Texas Supreme Court, 2007)
Bashara v. Baptist Memorial Hospital System
685 S.W.2d 307 (Texas Supreme Court, 1985)
Parnell v. Madonna Rehabilitation Hospital, Inc.
602 N.W.2d 461 (Nebraska Supreme Court, 1999)
Colomar v. Mercy Hospital, Inc.
461 F. Supp. 2d 1265 (S.D. Florida, 2006)
Children's Hospital Central California v. Blue Cross of California
226 Cal. App. 4th 1260 (California Court of Appeal, 2014)
in Re National Lloyds Insurance Company
449 S.W.3d 486 (Texas Supreme Court, 2014)
Bowden v. the Medical Center, Inc.
773 S.E.2d 692 (Supreme Court of Georgia, 2015)
Aaron Glenn Haygood v. Margarita Garza De Escabedo
356 S.W.3d 390 (Texas Supreme Court, 2011)
Temple University Hospital, Inc. v. Healthcare Management Alternatives, Inc.
832 A.2d 501 (Superior Court of Pennsylvania, 2003)

Cite This Page — Counsel Stack

Bluebook (online)
in Re North Cypress Medical Center Operating Co., Ltd., Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-north-cypress-medical-center-operating-co-ltd-tex-2018.