August 23, 2022
Mitchell Williams attorneys Brytne Kitchin and Rachael Padgett obtained a reverse and render decision from the Second Court of Appeals in Dallas in a lawsuit brought against Aetna Life Insurance Company by an emergency room physician. The case originated in the 342nd District Court in Tarrant County, Texas, and was the first appellate decision involving an appeal of an arbitrator’s award in a proceeding to resolve a surprise billing dispute under Chapter 1467 of the Texas Insurance Code. This new dispute resolution procedure was implemented by Senate Bill 1264—the omnibus surprise billing legislation passed by the Texas Legislature in 2019.
On August 11, 2022, the Second Court of Appeals delivered a decision in favor of Aetna, finding that there was substantial evidence in the record to support the arbitrator’s decision. In its opinion, the Court confirmed that the traditional tenets of substantial evidence apply to judicial review of an arbitrator’s decision in a Chapter 1467 proceeding: (1) the decision need only be supported by more than a scintilla of evidence; and (2) the arbitrator alone can determine what weight to give the evidence.
The Court’s opinion went on to hold that “traditional rules of evidence” do not apply to the evidence submitted to an arbitrator in a Chapter 1467 proceeding. The Court explained:
[T]he informal evidentiary guidelines of a Chapter 1467 arbitration proceeding in which (1) discovery is explicitly prohibited and (2) parties simply submit ‘written information’ for consideration without an evidentiary hearing . . . does not show any regard for the traditional rules of evidence and creates a procedure whereby all information supplied to the arbitrator . . . would violate some evidentiary rule. To exclude a party’s information on evidentiary ground would leave the Chapter 1467 arbitrator with nothing to consider.
The Court then reversed the trial court’s decision and rendered judgment affirming the arbitrator’s decision, which had favored Aetna. The Court’s ruling preserved the intended purpose of Chapter 1467 arbitration—to provide an informal and efficient dispute resolution procedure for surprise medical bills.
Kitchin argued the case before the Second Court of Appeals, and Kitchin and Padgett wrote the brief on appeal.
About the Attorneys
Brytne Kitchin is engaged in an active insurance regulatory practice and has extensive experience engaging with state and federal agencies as well as handling complex administrative litigation matters in state and federal court. She counsels businesses and public companies on insurance regulatory issues and assists clients with a wide variety of corporate and insurance-related matters.
Rachael Padgett has a diverse health care and benefits practice representing institutional and individual clients in transactions, administrative proceedings and litigation as well as counseling on operational and regulatory issues. She focuses her practice on counseling managed care clients concerning regulatory matters, license applications, product filings and compliance with other health-related laws.
About Mitchell Williams
Mitchell, Williams, Selig, Gates & Woodyard, P.L.L.C. is a full-service corporate law firm providing strategic, comprehensive legal counsel for everything from day-to-day needs to the most complex, specialized business matters. The firm’s Insurance Regulatory team of lawyers handles regulatory issues for insurance industry clients in all 50 states and D.C. Established in 1954, the firm has offices in Little Rock, Rogers and Jonesboro, Arkansas and Austin, Texas. For more information, visit MitchellWilliamsLaw.com.