The Impact of Texas Hospital Liens on Personal Injury Cases

A Texas hospital lien is a legal claim that hospitals can place against the settlement of a personal injury case per the Texas hospital lien statute. This lien is intended to ensure that the hospital recuperates costs for the medical care provided to the injured party.

The hospital can claim a portion or most of a personal injury settlement, which can significantly influence the net amount the injured party receives. Therefore, understanding and navigating the Texas hospital lien statute is crucial in the context of personal injury cases.

Requirements for a Hospital Lien to be Valid:  The Texas Hospital Lien Statute

In Texas, for a hospital lien to be valid and enforceable, it must adhere to several specific requirements stipulated under the Texas Property Code Section 55 (i.e., the Texas hospital lien statute). Non-compliance with any of these requirements could render the lien invalid.

  • Accurate Identification of Parties:  The lien must state explicit details about the parties involved, including: 1) the name and address of the injured individual, 2) the date of the accident, 3) the hospital’s name and address, and 4) the name of the at-fault party, if known.
  • Filed in the County Where Services were Rendered:  The lien must be filed with the county clerk’s office in the county where the patient received treatment. If it’s filed in a different county, the hospital lien may be deemed invalid per Texas hospital lien statute.
  • Admission Within 72 Hours of the Accident:  Section 55.002 of the Texas Property Code states that the injured party must have been admitted to a hospital or emergency room within 72 hours of the accident for the hospital lien to be valid. This provision ensures that the lien is directly related to the injury sustained in the accident in question.
  • Usual, Customary, and Reasonable Charges:  Section 55.004 of the Texas Property Code states that the charges claimed in the lien should consist of only the usual, customary, and reasonable (UCR) charges for the services provided. In defining what qualifies as UCR charges, Texas courts have considered multiple factors, such as:
    • Historically accepted payments from self-pay patients
    • Negotiated rates with private health insurance carriers
    • Public insurance payment rates, such as with Medicare and Medicaid
  • Lien Filed Before Money is Paid on the Claim:  The hospital’s lien is only enforceable if it is filed before the injured party or their legal representative receives any payments from the settlement. If the lien is filed after the settlement funds have been disbursed, per Texas hospital lien statute it will be considered invalid.
  • Applicable Only to the First 100 Days of Hospitalization:  A hospital lien may only apply to the first 100 days of the injured party’s hospitalization. Any charges incurred beyond this 100-day period may not be included in the hospital lien under Texas hospital lien statute.
  • Restrictions on Amount a Hospital Lien Can Take from an Injury Settlement:  Historically, hospitals in Texas had been assertive in recouping their charges from personal injury settlements, often leaving patients with little to nothing. However, changes to the hospital lien statute in 2019 by the Texas Legislature curtailed this practice and placed some restrictions on hospitals, particularly when the lien is high compared to the total settlement. Section 55.004 was amended to state that the hospital can only recover the lesser of:
    • The total amount of the hospital’s charges for services during the first 100 days of the injury victim’s hospitalization, or
    • fifty percent (50%) of the total amount recovered by the injured person.

The word LIEN on wooden cubes against the background of the judge's gavel and stand. The Texas hospital lien statute's impact on personal injury cases

How Does a Hospital Lien Affect a Personal Injury Settlement?

A hospital lien can significantly influence the outcome of a personal injury settlement in various ways. Here are some of the primary effects:

  • Reduction of Settlement Proceeds:  The hospital lien can reduce the net proceeds an injured party receives from their settlement, as the lien must be resolved from the settlement funds, potentially leaving the injured party with less money than anticipated.
  • Delay in Settlement Disbursement:  Settlement disbursements may be delayed as the parties negotiate the validity and the amount of the hospital lien.
  • Negotiation of Lien Amounts:  Typically, the hospital lien can be negotiated down to a lower amount, though this process can be complex and time-consuming, potentially delaying the settlement.
  • Potential Responsibility for Hospital Charges Post-Settlement:  Notably, an unresolved lien could leave the injured party responsible for the hospital charges, even after receiving their settlement. An injury attorney can negotiate a lower payment in exchange for a full release of any future monies owed.
  • Potential for Litigation:  If a lien is not properly addressed and paid from the settlement funds, the hospital may sue the injured party and/or their attorney to recover the amount owed.

Understanding the Texas hospital lien statute and its requirements can ensure that these liens are handled correctly and that the injured party receives their fair share of the settlement.

Can Emergency Medical Services File Liens on Injury Settlements in Texas?

In Texas, Emergency Medical Services (EMS) providers, such as ambulance services, can also place a lien on a personal injury settlement under certain conditions:

  • Population Limit: The county where the EMS provider is located must have a population of 800,000 or fewer. As of 2020, the only counties with over 800,000 residents are: Harris, Dallas, Tarrant, Bexar, Travis, Collin, Denton, Hidalgo, El Paso, and Fort Bend Counties.
  • Time Limit: The EMS services must have been rendered within 72 hours of the accident to help tie the services directly to the incident that led to the personal injury claim.
  • Amount Limit: The maximum amount that can be claimed through an EMS lien is limited to $1,000 to help balance the needs of the EMS provider to recoup costs with the financial realities faced by the injured party.

Can Emergency Room Physicians File Liens on Injury Settlements?

In Texas, emergency room physicians cannot directly file liens on injury settlements. While hospitals employ emergency room physicians, these healthcare providers are typically not directly involved in the lien process. However, the charges for the services they provide can be included in the hospital lien.

Every situation is unique, and the specific details of a medical provider’s agreement with a hospital can impact how services are billed and paid. Therefore, it’s crucial for injured parties to carefully review all medical bills related to their injury and to consult with a knowledgeable attorney.

Can a Hospital File a Lien and Still Pursue Payment During an Injury Case?

Yes, in Texas, a hospital can file a lien and still pursue payment during a personal injury case per Texas hospital lien statute. The hospital lien secures the hospital’s right to be paid once a settlement or lawsuit concludes, but it does not prevent the hospital from seeking payment during the course of a case. If hospital bills are unpaid, the hospital may refer the account to debt collectors or even file a lawsuit to recover the cost of the medical care.

If you find yourself in this situation, consult with a personal injury attorney who understands Texas hospital lien statute. They can potentially negotiate with the hospital and guide your discussions with debt collectors, working to reduce the amount of money you owe. They can also provide advice on how to handle any lawsuits filed by the hospital or how to handle debt collectors during personal injury claims.

Man in hospital paying medical bills - concerns regarding the hospital lien statute in Texas

Does My Attorney Have to Pay a Hospital Lien in Texas?

Under Texas law, attorneys have certain responsibilities towards hospital liens, especially when they represent a client who has received a personal injury settlement. Here are some key points to consider:

  • Consequences for Non-Payment by the Attorney:  In Texas, an attorney representing a personal injury claimant has a legal obligation to ensure that a hospital lien is paid from the settlement funds. If a hospital lien is not paid, the hospital can sue the attorney for the unpaid portion of the lien. Furthermore, the attorney may also face professional disciplinary action for failing to honor their fiduciary duty to their client and to the hospital.
  • Consequences for Non-Payment by the Client:  For the client, if the lien is not paid, the hospital may choose to pursue the unpaid debt. This could mean turning the debt over to collections or filing a lawsuit against the client. This can have a negative impact on the client’s credit score and result in additional legal complications.

Therefore, it is crucial for attorneys to be diligent in managing hospital liens and for clients to understand their attorney’s role in this process. By properly addressing Texas hospital liens, attorneys can help ensure their clients receive the maximum settlement, and that all legal and financial obligations are addressed.

How Can You Avoid a Hospital Lien in Texas?

In Texas, there are certain strategies you can employ to avoid a hospital lien in the aftermath of an accident. Here are a few crucial points to consider:

  • Refusing Hospital Transport:  Unless you have severe injuries, you have the right to refuse hospital transport, even if advised otherwise by paramedics or the police. In less severe cases, treatment at a minor emergency clinic can be a suitable alternative. These facilities, not classified as “hospitals,” lack the legal authority to file liens.
  • Waiting Beyond The 72-Hour Window:  By law, a hospital in Texas is not permitted to file a valid lien if the patient is admitted more than 72 hours post-accident, per the hospital lien statute.
  • Using Your Own Health Insurance:  Passing bills through your health insurance prevents the hospital from filing a lien, as they are being paid directly by your insurer. However, your health insurance company may then file a lien to recover the costs from your personal injury settlement. Still, health insurance liens are often easier to negotiate down than hospital liens. Some health insurance policies, especially those governed by certain laws, may not have a right to reimbursement.
  • Finalizing the Settlement Before the Hospital Files a Lien:  The hospital can only assert a lien if a third party is liable for your injuries, so if you settle before the hospital files a lien, it may not be able to recoup its costs from your settlement. You can check hospital liens in Texas here for most counties in Texas.
  • Contact Our Injury Attorneys: We may be able to assist you in finding medical aid after an accident through a deferred payment agreement, which avoids a hospital lien, health insurance lien, and debt collectors. Such agreements can allow you to get the medical care you need without the immediate financial burden.

However, these strategies should not be executed at the expense of your health. If you feel that visiting a hospital emergency room is necessary, do not hesitate to do so.

What Insurance Benefits Do Not Attach to Hospital Liens?

In Texas, not all insurance benefits are subject to hospital liens. This means that certain benefits can’t be taken from your personal injury settlement to satisfy the lien. Here are some types of insurance benefits that typically remain unaffected under Texas hospital lien statute:

  • Personal Injury Protection (PIP) Benefits: These benefits are designed to cover medical expenses and lost wages, regardless of who is at fault in an accident. Under Texas law, hospitals cannot place a lien on these benefits.
  • Uninsured/Underinsured Motorist (UM/UIM) Coverage: This type of coverage kicks in when the at-fault party does not have sufficient insurance to cover your damages. Generally, hospital liens do not attach to UM/UIM benefits.
  • Life Insurance Benefits: In the event of a fatal accident, life insurance proceeds are generally not subject to hospital liens.
  • Worker’s Compensation Benefits: If your injury occurred during the course of your employment, any benefits you receive from worker’s compensation are typically exempt from hospital liens.
  • Survival Action Benefits:  Survival actions compensate the estate of a deceased person for losses the decedent suffered prior to death. Damages may include medical bills, lost wages, and pain and suffering experienced by the decedent from the time of injury until their death. Hospital liens typically do not attach to wrongful death benefits by precedent (Tarrant County Hospital Dist. v. Jones, 664 S.W.2d 191) in Texas. However, hospital liens do attach to survival action benefits in Texas.

It’s important to have a skilled attorney by your side to navigate these legal intricacies of the Texas hospital lien statute and secure the maximum compensation to which you are entitled.

How Can an Injury Lawyer Help With a Hospital Lien?

A Texas personal injury lawyer plays a crucial role in navigating the complexities of the Texas hospital lien statute. They can assist in several ways:

  • Identifying Liens: An experienced attorney can help identify any hospital liens that may impact a personal injury settlement, ensuring they are handled properly and timely to avoid legal complications.
  • Negotiating Liens: Attorneys can negotiate the amount of the lien with the hospital or medical provider, aiming to reduce the lien amount, thus increasing the net settlement proceeds for their client. Some hospitals are more reasonable in negotiating liens than others. However, if a hospital lien consumes too much of a personal injury settlement, it deters the injured party and their attorney from proceeding with the settlement.
  • Resolving Liens: A personal injury lawyer will ensure that the lien is resolved before the settlement funds are disbursed. This involves paying the agreed-upon amount to the medical provider and obtaining a release of the lien.
  • Advising Clients: Throughout the process, the attorney will provide advice based on their extensive knowledge and experience with hospital liens, helping clients make informed decisions.
  • Protecting Client Interests: Most importantly, a personal injury lawyer will work to protect the financial interests of their client in the settlement process, ensuring that the impact of the hospital lien is minimized and the client receives the maximum possible compensation.

If you’ve been injured in an accident and want help understanding Texas hospital liens, contact Thompson Law today for a FREE CONSULTATION. We charge NO FEE unless we win for you.

No Win No Fee sign - A Guide to Texas Hospital Liens and Their Impact on Personal Injury Cases

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