What You Need To Know About Texas Hospital Liens

Written by greg on April 19, 2018

Questions about hospital liens in Texas

You have been injured in an accident in Texas and find out the settlement proceeds are covered by a hospital lien- what do you do?

 

This article will explain Texas hospital liens and offer some practical tips for dealing with the lien.

 

 

What is a Hospital Lien?

 

Hospitals are given rights under a law in Texas which protects the hospital payment out of personal injury claims.

 

For better or worse, Texas politicians have granted Texas hospitals a “super lien” that attaches to the following:

 

  1. Damages actions from a personal injury claim when the person received treatment at the hospital.

 

  1. A judgment relating to damages from an injury for which the hospital treated, and

 

  1. Settlement proceeds from an injury claim where the injured party sought treatment from the hospital after the accident.

 

 

What are the Requirements for the Lien to Attach to Settlements?

 

For a hospital lien to attach to the proceeds of any personal injury claim, the injury victim must have sought medical treatment at the hospital within 72 hours of the accident. Only the first 100 days of hospital treatment are to be covered by the lien.

 

If you are transferred to a new hospital, and the original hospital’s treatment was under the lien statute, the new hospital should also be entitled to benefit from the lien.

 

Hospitals are required to file written notice of the lien and in today’s environment on almost every accident you can imagine, the hospital does in fact file a lien. The Hospital lien must be recorded before funds are received by the injured party for the lien to be effective.

 

Practice tip: Conduct an online search for any liens before you agree to a settlement.

 

Why Didn’t the Hospital Bill My Health Insurance Company?

 

One trick that hospitals are using now to increase their bottom line is to refrain from billing the health insurance company after an automobile accident. Hospitals uniformly have rate agreements with the major health insurance companies which put limits on the amount they can charge for services. The honey hole so to speak for hospital profitability is personal injury claims. Texas law does not require the hospitals to bill the health insurance company and recent case law has been favorable to the hospitals in that regard.

 

Practice tip:  Contact your health insurance company and submit the hospital bills directly to your health insurance company.

 

 

Where Can I Find the Hospital Lien Law in Texas?

 

The hospital lien law is codified in Texas Property Code Section 55.

 

 

 Why Didn’t the Hospital Bill the Other Driver’s Insurance?

 

Hospitals are not required to and do not bill the person that hit you. They will, however, provide a notice of their hospital lien to the insurance company for the other driver if they can. In that case, the settlement proceeds will have the hospital’s name on the check.

 

How to Deal with a Hospital Lien?

 

The hospital rates can be 2 to 3 times what a health insurance company would pay, thus overcharging an uninsured personal injury victim who happens to be injured in an accident and has no health insurance. Early discussions with the person handling the bill can be helpful.

 

Attorneys frequently deal with hospital liens and are in a much better position to recognize excessive billing.  While the hospital lien law gives hospitals super priority, the ability to refuse a settlement without proceeds to the injury victim can be useful in obtaining reductions from the hospital. It is better to have an attorney handle a hospital lien reduction.

 

Practice tip: Always attempt to negotiate the lien to a reasonable amount given available funds.

 

Do I need a Personal Injury Lawyer?

 

The hospital collection departments understand the need for an attorney to help with obtaining and distributing funds and usually prefer an attorney involved. For this reason, the hospital often will consider the fees as a factor in what the injured will net.  Personal injury attorneys are also in a position to determine the validity of the lien and compare and argue the billing rates of other providers.

 

Practice tip: Talking with a personal injury attorney is always a good idea. You may end up with more money net by letting the attorney do the work.

 

 

 Are Changes Needed in Texas Regarding Hospital Liens?

 

Yes, Texas needs changes to the hospital lien law that both protects the hospital for payment and protects Texas families from being gouged for excessive payment.  Defendants in personal injury cases usually contest the amounts charged on medical bills even though the treatment was necessary for the victim and the hospital has filed a lien giving them priority over settlement proceeds.  This situation is patently unfair to Texas families in that awards for medical expense can be limited to reasonable amounts, but the hospitals have liens on the full costs.

 

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