rehab-alliance-of-texas-inc-dba-steeplechase-family-heathcare-and ( 2011 )

Affirmed and Opinion filed November 3, 2011.
In The
Fourteenth Court of Appeals
___________________
NO. 14-10-01126-CV
NO. 14-10-01147-CV
NO. 14-10-01148-CV
___________________
IHSAN SHANTI, M.D., LARRY LIKOVER, M.D., REHAB ALLIANCE OF
TEXAS, INC., D/B/A STEEPLECHASE FAMILY HEALTHCARE AND
STEEPLECHASE PAIN MANAGEMENT & SURGICAL ASSOCIATES, SHEILA
SMITH, F/N/A SHEILA GOYER, DENNIS SMITH, D.C., AND KARL
COVINGTON, M.D., Appellants
V.
ALLSTATE INSURANCE COMPANY, ALLSTATE INDEMNITY COMPANY,
ALLSTATE PROPERTY & CASUALTY INSURANCE COMPANY, ALLSTATE
COUNTY MUTUAL INSURANCE COMPANY, AND ALLSTATE FIRE &
CASUALTY INSURANCE COMPANY, Appellees
On Appeal from the 11th Judicial District Court
Harris County, Texas
Trial Court Cause No. 2009-81354
OPINION
In this accelerated interlocutory appeal, appellants challenge the trial court’s denial
of their motion to dismiss under section 74.351 of the Texas Medical Liability Act
(―TMLA‖). See Tex. Civ. Prac. & Rem. Code Ann. § 74.351(b) (West 2011); see also id.
§ 51.014(a)(9) (permitting interlocutory appeals from a trial court’s ruling under Section
74.351). Finding no error, we affirm.
BACKGROUND
This case arises from a suit between a group of insurance companies on one side,
and a group of health care providers and physicians on the other. In their live pleading,
appellees Allstate Insurance Company, Allstate Indemnity Company, Allstate Property &
Casualty Insurance Company, Allstate County Mutual Insurance Company, and Allstate
Fire & Casualty Insurance Company (collectively ―Allstate‖) asserted a cause of action for
fraud, conspiracy, and unjust enrichment against appellants Rehab Alliance of Texas, Inc.,
d/b/a Steeplechase Family Healthcare and Steeplechase Pain Management & Surgical
Associates; Sheila Smith, f/n/a Sheila Goyer; Dennis Smith, D.C.; Karl Covington, M.D.;
Ihsan Shanti, M.D.; and Larry Likover, M.D. Sheila Smith is the owner and president of
Rehab Alliance, a clinic specializing in the treatment of persons injured in automobile
collisions. Sheila’s husband, Dennis, serves as a chiropractor in one of Rehab Alliance’s
two Houston-area locations. Doctors Covington, Shanti, and Likover are all alleged to have
had some external relationship with Rehab Alliance.
As a provider of automobile insurance, Allstate paid a number of settlement claims
to persons who were purportedly involved in car accidents and later treated by appellants.
Allstate alleges that it was damaged because these settlement sums were paid in reliance on
false material representations reflected in documents, bills, and other records prepared by
appellants. Allstate also alleges that appellants willfully conspired together, through
referrals and other fee-splitting schemes, to defraud the insurance companies and to obtain
funds to which they were not justly entitled.
2
Allstate alleges an elaborate set of facts in support of its three legal theories. Briefly
summarized, those facts suggest that: (1) appellants solicited referrals from personal injury
attorneys, offering to provide their clients with all of the medical services and
documentation needed to support a personal injury claim; (2) in exchange for those
services, appellants demanded a portion of any settlement or judgment obtained in their
patients’ litigation; (3) in an effort to maximize their financial gain, appellants conspired
together and charged their patients for expensive and unnecessary medical procedures; and
(4) through falsified records and other materials, appellants misrepresented to various
insurance companies, including Allstate, that all of the services they performed were
executed in honest and independent clinical judgment. The more precise details of
Allstate’s allegations are described in the following paragraphs.
When they first arrive at Rehab Alliance, patients are required to sign an assignment
of benefits acknowledging their personal liability for the clinic’s bills. This document is
forwarded to the patient’s attorney, who either includes it in demand packages or submits it
directly to Allstate. Patients are also given a letter of protection, in which Rehab Alliance
agrees to release the patient of all financial obligations incurred during treatment. The
release comes with two conditions: (1) the patient must maintain his or her attorney
representation, and (2) the patient must complete the treatment plan provided by Rehab
Alliance. These letters of protection are never disclosed to insurers such as Allstate.
Dennis Smith is the sole chiropractor for Rehab Alliance, and Dr. Covington is its
Medical Director. Despite the title, Dr. Covington maintains his own practice at a separate
location, and he is rarely seen on the premises of either Rehab Alliance clinic. Pursuant to
an oral agreement, Rehab Alliance pays Dr. Covington a flat quarterly fee for public use of
his name.
Although Dr. Covington hardly ever visits Rehab Alliance, his name appears on
many medical records signifying that he examined and provided services to clinic patients.
These examinations are actually provided by nurse practitioners employed by Rehab
3
Alliance on a contract basis. Dr. Covington neither supervises the nurse practitioners, nor
provides them with any written protocols or instructions. The nurse practitioners prescribe
and refill medications, including narcotics such as Vicodin, under Dr. Covington’s
auspices.
Following examinations, patients are often treated in uniform, ―cookie cutter‖
fashion. They receive hot and cold packs and electric stimulation modalities. Rehab
Alliance bills these modalities under a code for ―attended‖ procedures, even though they
are not attended. At the request of their attorneys, patients are also referred for MRI scans
at a facility managed by U.S. Imaging, Inc. Radiologists at this facility falsely identify
vertebral disc bulges and herniations and report these findings in medical narratives. Rehab
Alliance has an agreement with U.S. Imaging, in which Sheila Smith has the authority to
reduce or compromise the fees billed.
After the MRIs, patients are also referred for orthopedic and pain management
consultations. Over the years, a number of physicians have conducted these consults,
including Doctors Shanti and Likover. These doctors conduct cursory consultations, even
though billing records show the patients are charged for ―comprehensive examinations,‖
which typically involve sixty minutes of face-to-face time with the patient. Pursuant to
agreements between Rehab Alliance and these physicians, billing for the consultations is
managed exclusively by Rehab Alliance. As with the MRI procedures, Sheila Smith has
the authority to reduce or compromise the physician’s fees, collect the fees, and split the
recovery with the treating physician. Because recovery depends upon the patient’s
successful collection of settlement or judgment, the doctors effectively work on a
contingency basis.1
1
According to Allstate, Rehab Alliance also has a written contract with Dr. Shanti. Under the
terms of this contract, if the consultation results in additional procedures with the patient, Dr. Shanti is
supposed to receive twenty-five percent of the amount collected, with a minimum of $650, in the event the
patient recovers by way of settlement or judgment.
4
Patients may also be referred for epidural steroid injections (―ESIs‖). These
procedures are costly and often performed at the behest of the patient’s attorney. Billing for
ESIs is managed by Steeplechase Pain Management & Surgical Associates, which is
merely an assumed name of Rehab Alliance. The ESIs are performed in the same facility
managed by U.S. Imaging where the MRIs are conducted. Dr. Shanti performs some of the
procedures here himself.2 As with the MRIs, Sheila Smith has the authority to set the
charge and reduce or compromise the billing. The billing represents all charges associated
with the ESI, including the administering physician’s fee.3 When Rehab Alliance collects
the fee, it is split evenly with U.S. Imaging.
In addition to the letters of protection, appellants also conceal other documents,
such as ―patient update‖ notes. These notes reflect that medications are being prescribed by
lay persons using Dr. Covington’s name, that attorneys are making determinations as to
whether MRIs and ESIs should be performed, and that attorneys are also requesting
revisions in certain medical narrative reports. These documents are neither disclosed in the
claims process, nor produced in response to subpoenas for clinic records.
Based on these factual allegations, Allstate seeks recovery of damages resulting
from a number of misrepresentations, including: (1) that certain services charged by Rehab
Alliance were provided by a medical doctor, or at least a properly supervised nurse
practitioner; (2) that patients remained liable for their own medical bills; and (3) that
certain referrals and procedures charged to the patients were medically necessary and a
product of independent clinical judgment. Allstate also alleges that appellants specifically
failed to disclose: (1) that doctors performing consultations and other procedures were
effectively paid on a contingency basis; (2) that personal injury attorneys dictated whether
2
Under his contract, if Dr. Shanti performs the procedure at a separate facility, Dr. Shanti is
obligated to pay Rehab Alliance a kickback.
3
Allstate also alleges that the administering physician may receive an ―up front‖ payment in the
amount of $1500, from either the patient or the patient’s attorney. These initial payments are not reflected in
documentation submitted to Allstate. All additional payments are contingent upon the receipt of settlement.
5
certain procedures would be performed; (3) that partial payments were made for some
surgical procedures; (4) that medications were prescribed and refilled by nurse
practitioners, rather than licensed physicians; and (5) that appellants were interested parties
in their patients’ litigation. Allstate contends that appellants knew their representations to
be false, that they conspired together to create these false and misleading statements, and
that they ultimately caused Allstate to act upon these misrepresentations by paying sums in
settlement.
The focus of this appeal is whether the suit below qualifies as a ―health care liability
claim,‖ which would require Allstate to serve appellants with a timely filed medical expert
report under Section 74.351 of the TMLA. Of the opinion that this suit did not constitute a
health care liability claim, Allstate made no attempt to produce the expert report. Based on
their belief that the suit against them was a health care liability claim, appellants moved for
mandatory dismissal under Section 74.351(b). The trial court denied the motion, and this
appeal followed.
ANALYSIS
We normally apply an abuse of discretion standard when considering a trial court’s
ruling on a motion to dismiss. Bowie Mem’l Hosp. v. Wright, 79 S.W.3d 48, 52 (Tex.
2002); Appell v. Muguerza, 329 S.W.3d 104, 109 (Tex. App.—Houston [14th Dist.] 2010,
pet. filed). When the issue involves Section 74.351 and a determination of whether the
TMLA applies, however, we must engage in statutory interpretation, which involves a
question of law we consider de novo. Buck v. Blum, 130 S.W.3d 285, 290 (Tex.
App.—Houston [14th Dist.] 2004, no pet.).
When interpreting a statute, our primary goal is to ascertain and give effect to the
intent of the legislature. F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683
(Tex. 2007). Where the statutory text is clear, we presume that the words chosen are the
surest guide to legislative intent. Presidio Indep. Sch. Dist. v. Scott, 309 S.W.3d 927, 930
(Tex. 2010). We rely upon the definitions prescribed by the legislature and any technical or
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particular meaning the words have acquired. Tex. Gov’t Code Ann. § 311.011(b) (West
2005). Otherwise, we apply the words’ plain and common meaning, unless the legislature’s
contrary intention is apparent from the context or such a construction would lead to absurd
results. City of Rockwall v. Hughes, 246 S.W.3d 621, 625–26 (Tex. 2008).
The duty to serve an expert report applies only to those plaintiffs seeking recovery
in a ―health care liability claim.‖ Tex. Civ. Prac. & Rem. Code Ann. § 74.351(a). The
legislature has defined that term as follows:
―Health care liability claim‖ means a cause of action against a health care
provider or physician for treatment, lack of treatment, or other claimed
departure from accepted standards of medical care, or health care, or safety
or professional or administrative services directly related to health care,
which proximately results in injury to or death of a claimant, whether the
claimant’s claim or cause of action sounds in tort or contract.
Id. § 74.001(a)(13). As suggested by the Texas Supreme Court, this definition consists of
three component parts: (1) a physician or health care provider must be named as the
defendant; (2) the cause of action must refer to a patient’s treatment, lack of treatment, or
some other departure from accepted and specialized standards of care; and (3) the
defendant’s act, omission, or other departure must proximately cause injury or death to the
claimant. Marks v. St. Luke’s Episcopal Hosp., 319 S.W.3d 658, 662 (Tex. 2010) (plurality
opinion). The parties do not dispute that appellants qualify individually as either physicians
or health care providers. Our discussion will accordingly focus on the two remaining
components.
Under the second component, we examine the allegations that form the ―cause of
action,‖ a term not expressly defined under the TMLA. The supreme court has observed
that a ―cause of action‖ may be regarded ―as a fact or facts entitling one to institute and
maintain an action, which must be alleged and proved in order to obtain relief,‖ or a ―group
of operative facts giving rise to one or more bases for suing.‖ In re Jorden, 249 S.W.3d
416, 421 (Tex. 2008) (orig. proceeding) (quoting A.H. Belo Corp. v. Blanton, 129 S.W.2d
7
619, 621 (Tex. 1939) and Black’s Law Dictionary 235 (8th ed. 2004)). Consistent with this
understanding, when determining whether a cause of action constitutes a health care
liability claim, we look to the facts upon which relief is sought, rather than the manner in
which the cause of action is pleaded. See Yamada v. Friend, 335 S.W.3d 192, 196–97 (Tex.
2010); Garland Cmty. Hosp. v. Rose, 156 S.W.3d 541, 543–44 (Tex. 2004). Plaintiffs may
not avoid the requirements of the TMLA by splitting and splicing a claim into multiple
causes of action if the underlying facts would also give rise to a health care liability claim.
Yamada, 335 S.W.3d at 197. If the facts complain of an act or omission that is ―an
inseparable part of the rendition of medical services,‖ then the cause of action is a health
care liability claim. Diversicare Gen. Partner, Inc. v. Rubio, 185 S.W.3d 842, 848 (Tex.
2005).
In deciding whether an act or omission is inseparable from the rendition of medical
services, we may consider such factors as (1) whether a specialized standard in the health
care community applies to the circumstances in question; (2) whether the alleged facts or
omissions involve medical judgment related to the patient’s care or treatment; and
(3) whether medical expert testimony would be needed to prove the cause of action. Id. at
847–52; Cardwell v. McDonald, — S.W.3d —, No. 03-10-00086-CV, 2011 WL 3890397,
at *6 (Tex. App.—Austin Aug. 31, 2011, no pet. h.); Tex. W. Oaks Hosp., LP v. Williams,
322 S.W.3d 349, 352 (Tex. App.—Houston [14th Dist.] 2010, pet. granted).
In its live pleading, Allstate complains of specific factual circumstances regarding
appellants’ manner of billing, their relationship among each other, and their connection
with unnamed personal injury attorneys. Allstate claims that Rehab Alliance failed to
disclose that patients were required to sign letters of protection releasing them from
financial responsibility incurred during their course of treatment. Once these letters of
protection were collected, Allstate alleges that Rehab Alliance proceeded to charge the
patient with various services, some of which were never performed as billed, and others
that were performed upon the direction of an attorney, rather than a licensed medical
8
professional. The allegations also state that Rehab Alliance maintained illicit relationships
with the other named appellants pursuant to a conspiratorial ―kickback‖ scheme. Under
this scheme, appellants inflated the charges of their patients’ medical histories, concealed
their interest in their patients’ litigation, and depended upon their patients’ successful
receipt of settlement for the collection of their own fees. Allstate argues that these are
claims sounding in fraud, and that they are not health care liability claims.
Appellants argue that Allstate’s claims are health care liability claims, improperly
recast as a suit for fraud, conspiracy, and unjust enrichment. Appellants specifically rely on
Allstate’s allegations that they falsely represented certain aspects of their medical
treatment, including: (1) ―That referrals for MRIs were medically necessary‖; (2) ―That
MRIs showed the patient had incurred spinal injury, such as disc herniations, due to the
accidents at issue‖; (3) ―That referrals for medical consultations, including orthopedic and
pain management consultations, were medically necessary‖; (4) ―That the medical
consultation examinations conducted were comprehensive examinations‖; (5) ―That
surgical injection procedures were medically necessary, due to alleged herniations; and
(6) ―that referrals and prescriptions for medication were reasonable and necessary and
made [by] physicians exercising independent clinical judgment.‖ Appellants insist that
these allegations demonstrate health care liability claims because they involve deviations
from the appropriate standard of care. Therefore, they insist that the testimony of medical
experts is required.
In Pallares v. Magic Valley Electric Cooperative, Inc., the Thirteenth Court of
Appeals held that a plaintiff did not assert a health care liability claim when it sought
damages resulting from a physician’s fraudulent billing and unnecessary course of
treatment. Pallares v. Magic Valley Elec. Coop., Inc., 267 S.W.3d 67 (Tex. App.—Corpus
Christi 2008, pet. denied). The plaintiff in that case was the employer of a patient
participating under the employer’s self-insured health plan. Id. at 69. After the patient
sought medical treatment, her physician submitted a bill to the employer for more than a
9
half million dollars. Id. The employer never maintained that the physician was negligent in
his diagnosis and treatment. Instead, in a suit for fraud, the employer alleged that the
physician knowingly misrepresented the extent of the patient’s condition, with the intent of
inducing payment for expensive and inappropriate procedures. Id. at 69, 72. In deciding
that the cause of action did not constitute a health care liability claim, the court of appeals
recognized that the employer’s damages were ―merely tangential‖ to the medical services
provided by the physician. Id. at 72. Relying on the text of the TMLA, the court held that it
could not ―expand health care liability to peripheral claims not directly related to health
care.‖ Id. at 73 (citing Tex. Civ. Prac. & Rem. Code Ann. § 74.001(a)(13)) (emphasis
added).
Consistent with Pallares, we find that Allstate’s cause of action does not rely on
factual allegations directly relating to an act, omission, or other claimed departure from the
specialized and professional duty of care required of appellants. In other words, the
allegations only refer to facts ―tangential‖ to the rendition of medical services.
In deciding whether the case presents a health care liability claim, we are not bound
by either party’s characterization of the claims. Hector v. Christus Health Gulf Coast, 175
S.W.3d 832, 835 (Tex. App.—Houston [14th Dist.] 2005, pet. denied). The supreme court
has consistently stated that the characterization of the claim must turn upon its ―underlying
nature‖ or ―essence‖ or ―gravamen.‖ Omaha Healthcare Ctr., LLC v. Johnson, 344 S.W.3d
392, 394 (Tex. 2011); Yamada, 335 S.W.3d at 196–97; Marks, 319 S.W.3d at 664;
Diversicare, 185 S.W.3d at 854; Rose, 156 S.W.3d at 543. After examining the factual
allegations that form the basis of Allstate’s complaint, we are convinced that the essence of
Allstate’s claim is not one of health care liability. From what we can discern, Allstate has
not alleged, or artfully pleaded around, any failure to meet the standard of care. Allstate
does not allege, for instance, that appellants were negligent in their diagnoses, or that
Allstate (or the patients it insured) suffered injury or death as a result of their negligence.
10
To the contrary, Allstate merely alleges that it was damaged by false material
representations perpetrated by appellants. Though some of these misrepresentations
concern the medical necessity of certain referrals or procedures, the underlying nature of
Allstate’s claim is a complicated, multi-level scheme to defraud the insurance companies.
That scheme begins with appellants’ concealing the aspect of their billing that releases
patients from financial responsibility. It proceeds to a concerted effort between appellants
and personal injury attorneys to have appellants perform certain procedures upon the
attorneys’ request, rather than through appellants’ own clinical judgment. Finally, it
concludes with appellants’ charging their patients for these unnecessary procedures, with
the full expectation that Allstate would rely upon their medical records when deciding on a
settlement. This scheme does not involve any deviation from a medical standard of care.
Medical expert testimony would not be required to establish that appellants were willing
participants in a conspiracy to commit fraud, or that they were engaging in a particular
course of business as a means of extorting larger fees from insurers such as Allstate. Even
though Allstate’s petition involves some allegations of medical necessity, the essence of
the cause of action does not implicate an inseparable part of the rendition of medical
services. See Pallares, 267 S.W.3d at 72; Shannon v. Law-Yone, 950 S.W.2d 429, 434,
437–38 (Tex. App.—Fort Worth 1997, pet. denied) (holding cause of action was not a
health care liability claim where plaintiff alleged that physicians ―created false records as a
basis for lengthening patients’ stays to increase census and revenue‖).
Turning to the third component of a health care liability claim, we also determine
that Allstate has not alleged that appellants’ act, omission, or claimed departure
proximately caused the injury or death of a ―claimant.‖ The TMLA defines a ―claimant‖ as
―a person, including a decedent’s estate, seeking or who has sought recovery of damages in
a health care liability claim. All persons claiming to have sustained damages as the result of
the bodily injury or death of a single person are considered a single claimant.‖ Tex. Civ.
Prac. & Rem. Code Ann. § 74.001(a)(2). Allstate does not fit neatly into this definition. No
part of its cause of action is derivative from an injury or death of another person. Allstate is
11
not a subrogation claimant, seeking relief on behalf of appellants’ patients. In fact, none of
its damages relates to a physical injury sustained.4 Because we determine that Allstate has
not asserted a health care liability claim, we hold that Allstate cannot be a ―claimant‖ under
the TMLA.
Although we conclude that Allstate has not alleged a health care liability claim, we
address appellants’ remaining arguments to the contrary. These arguments were raised in
separate appellate cause numbers, and are not shared among all appellants together. We
examine these arguments as they have been raised, according to appellants’ individual
briefing.
Additional Arguments by Dr. Shanti
In one of his separately raised arguments, Dr. Shanti contends that Allstate qualifies
as a ―claimant,‖ despite Allstate’s observance that it never received treatment as a patient.
For authority, Dr. Shanti relies on Marine Transport Corp. v. Methodist Hospital, 221
S.W.3d 138 (Tex. App.—Houston [1st Dist.] 2006, no pet.), and Smith v. Financial
Insurance Co. of America, 229 S.W.3d 405 (Tex. App.—Eastland 2007, no pet.), two cases
holding that non-patients may qualify as claimants. These cases are distinguishable
because the plaintiffs in each expressly alleged departures from the appropriate standard of
care. See Marine Transport, 221 S.W.3d at 150; Smith, 229 S.W.3d at 406. The petition in
this case involves no similar allegation.
In another argument, Dr. Shanti attempts to distinguish Pallares. He observes that
in Pallares, ―the defendants were the ones directly billing‖ the self-insured employer,
whereas in the present case, Rehab Alliance managed the billing and he ―only provided
treatment.‖ Dr. Shanti reads Pallares too narrowly. The cause of action involved more than
4
We do not suggest that the TMLA cannot apply to claims involving non-physical injuries. See,
e.g., Murphy v. Russell, 167 S.W.3d 835, 837(Tex. 2005) (per curiam) (holding claim that anesthesiologist
sedated patient against her instruction was a health care liability claim); see also TTHR, L.P. v. Coffman,
338 S.W.3d 103, 111 (Tex. App.—Fort Worth 2011, no pet.) (discussing additional cases where
non-physical injuries have resulted in health care liability claims).
12
mere fraudulent billing. As with this case, Pallares turned upon alleged misrepresentations
regarding the necessity of certain procedures provided by the physician. See Pallares, 267
S.W.3d at 72. We accordingly reject his attempt to differentiate this case.
Additional Arguments by Dr. Likover
Proceeding pro se, Dr. Likover insists that Allstate has raised a health care liability
claim because an allegation that a procedure was unnecessary ―is clearly a claim of
malpractice.‖ We have already addressed this argument, and similar ones by the remaining
appellants. The underlying nature of such allegations is not that appellants departed from
an accepted standard of care; rather, it is that appellants represented their procedures to be
clinically necessary when, in fact, they were being performed in ―cookie cutter‖ fashion
and at the behest of personal injury attorneys.
Dr. Likover also argues that Allstate has alleged an ―injury‖ within the meaning of
the TMLA. He observes that Allstate’s cause of action involves allegations that
unnecessary surgeries were performed, and in any surgery, a patient necessarily suffers ―a
controlled injury.‖ Dr. Likover does not cite any authority for this argument. In fact, the
only authority in his brief is a recitation of the standard of review. We have determined that
this argument has been waived. See Tex. R. App. P. 38.1(i).
Additional Arguments by Rehab Alliance, Sheila Smith, Dennis Smith, and Dr. Covington
(the “Rehab Alliance appellants”)
In their brief, the Rehab Alliance appellants argue that Allstate’s cause of action
constitutes a health care liability claim because ―misrepresentations regarding treatment
fall under the TMLA.‖ For this proposition, they rely on some eleven cases.5 Discussion of
5
The cases cited were Binur v. Jacobo, 135 S.W.3d 646 (Tex. 2004); Victoria Gardens of Frisco v.
Walrath, 257 S.W.3d 284 (Tex. App.—Dallas 2008, pet. denied); Vaughan v. Nielson, 274 S.W.3d 732
(Tex. App.—San Antonio 2008, no pet.); Strom v. Mem’l Hermann Hosp. Sys., 110 S.W.3d 216 (Tex.
App.—Houston [1st Dist.] 2003, pet. denied); De Leon v. Vela, 70 S.W.3d 194 (Tex. App.—San Antonio
2001, pet. denied); Savage v. Psychiatric Inst. of Bedford, Inc., 965 S.W.2d 745 (Tex. App.—Fort Worth
1998, pet. denied); Winkle v. Tullos, 917 S.W.2d 304 (Tex. App.—Houston [14th Dist.] 1995, writ denied);
Ranelle v. Beavers, No. 02-08-437-CV, 2009 WL 1176445 (Tex. App.—Fort Worth Apr. 30, 2009, no pet.)
13
those cases is almost entirely cursory in the briefs. Many of the authorities do not involve
claims of intentional misrepresentations, and others plainly allege medical malpractice
claims for unnecessary procedures. The Rehab Alliance appellants have not demonstrated
that the allegations of fraud in this case are analogous to any case in which a court has
determined a cause of action to be a health care liability claim.
The Rehab Alliance appellants also attempt to distinguish Pallares on the basis that
―Pallares involved fraudulent representations by a health care provider of symptoms, not
whether certain treatment and prescriptions were medically necessary.‖ The Rehab
Alliance appellants misstate the facts of that case. The employer in Pallares did allege that
certain procedures were medically unnecessary. In its live pleading before the court, the
employer noted the following:
Ms. Merett [the patient–employee] was diagnosed with chronic and severe
pain and the defendant undertook a course of treat[ment] which has resulted
in costs in the amount of $631,850.99, which were unnecessary and
inappropriate. The employee received no significant relief, other th[a]n
temporary, and has resulted in the charges which are in contention herein.
4.3 The defendants’ [Pallares’s] representation that Ms. Merett, Plaintiff’s
[Magic Valley’s] employee and insured, had had chronic pain was false, and
at the time the representation was made, the defendant Pallares knew it to be
false. The defendant Pallares made the false representation with the intent of
inducing the plaintiff to pay for such unnecessary treatment.
Pallares, 267 S.W.3d at 72 (emphasis added).
Additionally, the Rehab Alliance appellants contend that Allstate alleged a health
care liability claim because Allstate designated two medical experts four months after the
TMLA’s deadline for serving an expert report. Courts have previously recognized that the
necessity for medical expert testimony may indicate that a claim is a health care liability
(mem. op.); Merritt v. Williamson, No. 01-08-00293-CV, 2008 WL 2548128 (Tex. App.—Houston [1st
Dist.] June 26, 2008, no pet.) (mem. op.); Holleman v. Vadas, No. 04-05-00875-CV, 2007 WL 1059035
(Tex. App.—San Antonio Apr. 11, 2007, pet. denied) (mem. op.); and Erickson v. Cigarroa, No.
04-04-00075-CV, 2005 WL 1397115 (Tex. App.—San Antonio June 15, 2005, no pet.) (mem. op.).
14
claim. Diversicare, 185 S.W.3d at 848; Rose, 156 S.W.3d at 544. However, ―the need for
expert testimony is not dispositive as to whether a claim is a health care liability claim.‖
Tex. W. Oaks Hosp., 322 S.W.3d at 353; see also Pallares, 267 S.W.3d at 74–75 (holding
that cause of action was not a health care liability claim even if medical expert testimony
might be needed). In this case, Allstate’s medical experts were designated to opine on such
matters as (1) the propriety of the relationships existing between physician and
non-physician defendants; (2) whether a physician may be employed by, or split fees with,
a chiropractor or chiropractic clinic; (3) whether the documentation regarding the
consultation examinations justified their designations as ―comprehensive examinations‖;
and (4) whether a chiropractor or chiropractic clinic employee may prescribe medication.
This testimony speaks directly to Allstate’s causes of action for fraud and conspiracy.
There is no indication that the experts would have testified about a departure from the
standard of care that proximately caused injury or death to a claimant.
CONCLUSION
Courts must be careful not to expand the TMLA beyond its stated bounds. Theroux
v. Vick, 163 S.W.3d 111, 113 (Tex. App.—San Antonio 2005, pet. denied). Not all claims
amount to health care liability claims merely because they arise in a health care setting. See
Diversicare, 185 S.W.3d at 854. As with Pallares, the facts alleged in this case do not state
a cause of action for health care liability.
The trial court’s denial of appellants’ motion to dismiss is therefore affirmed.
/s/ Adele Hedges
Chief Justice
Panel consists of Chief Justice Hedges and Justices Anderson and Christopher.
15