In re N. Cypress Med. Ctr. Operating Co., 559 S.W.3d 128

Background

Plaintiff Roberts received emergency hospital services from North Cypress and the hospital filed a lien for the full amount of its charges. Roberts sued asserting DTPA, Texas Debt Collection Act, and Fraudulent Lien Act claims and sought damages, fees, and declaratory relief.
Central contested discovery: Roberts sought information about the hospital's billing, including adjustments (amounts actually accepted from insurers) and documents bearing on reasonableness of charges. North Cypress argued many discovery requests were overbroad and irrelevant.
The parties dispute whether a hospital's listed charges or its net accepted amounts (after insurer adjustments) are discoverable and whether such adjustments constitute a benefit to insurers rather than to patients. Haygood v. De Escabedo is key precedent on adjustments as insurer benefits.
The Hospital Lien Act allows liens for a hospital's charges but includes language about "reasonable and regular rate," and Texas precedent recognizes a right to question reasonableness of lien charges. Cases note hospitals' list prices often exceed amounts accepted from insurers.
The court also considered discovery proportionality and fishing-expedition limits under Texas discovery rules; prior writ decisions (In re Nat'l Lloyds, In re State Farm Lloyds, In re Alford) emphasize proportionality and limits on overbroad discovery.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Discoverability of insurer adjustments to hospital charges	Roberts: adjustments and contracts showing what insurers actually paid are relevant to reasonableness of charges and liability under consumer-protection and lien statutes	North Cypress: adjustments are confidential, reflect insurer-provider bargains and are not directly relevant to Roberts' liability or the lien amount; production would be a fishing expedition	Court applied proportionality and precedent (Haygood): adjustments can be relevant but discovery must be limited and proportional; prior decisions limit broad requests for insurer-provider contracts and adjustments
Whether adjustments are a benefit to insurer (Haygood issue)	Roberts: adjustments show hospital's inflated list prices and bear on reasonableness; should be discoverable	North Cypress: adjustments are part of insurer-provider bargains and not benefits to patient; hospital may properly assert its charges were reasonable	Court cited Haygood: adjustments are typically a benefit obtained by insurers; that observation informs but does not automatically bar discovery—context and proportionality control
Reasonableness of lien amount under Hospital Lien Act	Roberts: lien may be invalid or subject to reduction because charges may be unreasonable and not reflective of amounts hospitals accept	North Cypress: lien amount reflects reasonable charges and statute allows recovery of hospital's charges subject to right to challenge reasonableness	Court acknowledged statute language and precedents (Daughters of Charity, Bashara) recognizing right to contest reasonableness; dispute over admissible evidence remains subject to discovery limits
Scope of permissible discovery (proportionality/fishing expedition)	Roberts: broad discovery needed to prove statutory and tort claims about billing practices	North Cypress: broad discovery imposes undue burden and seeks irrelevant insurer-provider commercial agreements	Court relied on proportionality principles from In re Nat'l Lloyds and related writ cases: discovery cannot be a fishing expedition; requests must be reasonably tailored and proportional to claims

Key Cases Cited

Haygood v. De Escabedo, 356 S.W.3d 390 (Tex. 2011) (adjustments to provider charges are a benefit to insurers and inform discoverability questions)
In re Nat'l Lloyds Ins. Co., 532 S.W.3d 794 (Tex. 2017) (orig. proceeding) (emphasizing proportionality and limits on overbroad discovery)
In re Nat'l Lloyds Ins. Co., 449 S.W.3d 486 (Tex. 2014) (per curiam) (orig. proceeding) (writ relief where discovery exceeded permissible scope)
In re State Farm Lloyds, 520 S.W.3d 595 (Tex. 2017) (orig. proceeding) (proportionality is the polestar in discovery disputes)
In re Alford Chevrolet-Geo, 997 S.W.2d 173 (Tex. 1999) (orig. proceeding) (discovery may not be used as a fishing expedition)
Daughters of Charity Health Servs. v. Linnstaedter, 226 S.W.3d 409 (Tex. 2007) (statutory language limits lien recovery by reference to reasonable and regular rates)
Bashara v. Baptist Mem'l Hosp. Sys., 685 S.W.2d 307 (Tex. 1985) (statute permits recovery of lien amount but reasonableness of charges may be questioned)
Texaco, Inc. v. Sanderson, 898 S.W.2d 813 (Tex. 1995) (per curiam) (orig. proceeding) (writ standard and limits on discovery abuse)