You’ve just been injured in an accident and were taken to a hospital emergency room for treatment. Now, you owe the hospital for their services. Assuming you have no health insurance, the hospital may file a hospital lien. Therefore, it is important that you know how hospital liens work in Texas.
What is a Hospital Lien?
In Texas, hospital liens are governed by Chapter 55 of the Texas Property Code. A hospital may have a lien if it provided medical treatment to a patient for injuries sustained in an accident. If you make a personal injury claim for your injuries, the hospital may then recover their charges from the settlement proceeds or your case.
Requirements of a Valid Hospital Lien in Texas.
1. Filed in the County Where the Services were Rendered.
In order for a lien to be valid, it must be in writing. It must also be filed in the county where the services were rendered. For instance, if you went to the hospital in Dallas County, even though your accident happened in Fort Worth or Plano, the hospital lien must still be filed in Dallas County.
2. Filed Prior to Money Being Paid on the Claim.
The lien must be filed prior to money being paid on the claim. If money is paid before the lien is filed, then the lien does not attach to those funds. So, if the insurance company pays your some money up front, then the lien does not apply to those funds if they were paid before the hospital lien was filed.
3. Must Visit Hospital Within 72 hours of the Accident.
There are other requirements for a valid hospital lien. For instance, the patient must be admitted to the hospital with 72 hours of the accident. If the patient is transferred to another hospital, the second hospital may also file a lien if the first hospital had the right to do so. In other words, the second hospital gets the benefit of the first hospital’s rights to file a lien even if you go to the second hospital more than 72 hours later.
4. Certain Information must be Included in the Hospital Lien.
The lien itself must contain certain information. It must state the name and address of the injured person and the date of the accident. It must also state the name and address of the hospital as well as the name of the at-fault party (if known).
Once the lien is filed, the hospital must also mail notice of the lien to the injured person or their legal representative.
5. Usual, Customary, and Reasonable (“UCR”) Charges Only.
Legally, a hospital may only recovery the usual, customary, and reasonable (“UCR”) charges for their services. Rarely is the UCR amount the same as the gross charges reflected in the billing statement. In fact, the legally allowable rate is typically much less.
Texas courts have considered several factors in determining the UCR rate for medical charges including:
What the hospital has historically accepted from self-pay patients;
The negotiated rates with private health insurance carriers for the same services;
The amount that public insurance pays, such as Medicare and Medicaid.
You can imagine that these amounts tend to be a fraction of what the hospital charges. Therefore, this can be an effective tool when trying to negotiate a hospital lien.
6. 2019 Amendments Change the Amount a Hospital Lien can Take.
Although a hospital lien attaches to the reasonable charges only, that amount can still be a significant depending on the severity of the injury. Prior to 2019, hospitalS have been getting very aggressive about recovering their charges from a personal injury settlement even if it leaves the patient with very little of nothing.
In 2019 , the Texas Legislature put an end to that practice. Section 55.004 was amended to provide that the hospital may only recovery the lesser of:
the total amount of the recoverable charges; or, fifty percent (50%) of the total amount recovered by the injured person.
At least this amendment provides some limitations on the hospital where the lien amount is relatively high when compared to the total settlement.
Effects of Hospital Liens.
Once a hospital secures a valid lien, the hospital’s right to recovery is superior to the patient’s right of recovery. So, if you reach a settlement, the hospital has the right to get paid first.
Insurance companies and personal injury lawyers get very nervous about hospital liens. Ignoring a lien may result in the insurance company or lawyer paying out of pocket for the lien. That is why most insurance companies and attorneys search the county records before settling a case.
Emergency Medical Services (Ambulance) Lien.
If you were transported to the hospital by ambulance, then an emergency medical services (EMS) provider may also file a lien. However, an EMS provider can only assert a lien in a county with a population of 800,000 or less. The ambulance services have to be rendered within 72 hours of the accident. Also, the amount of an EMS lien is limited to $1,000.
Emergency Physicians Lien.
An emergency room physician may also have a lien. However, the hospital must assert those charges on the physician’s behalf as part of the lien. The statute does not appear to permit the physician to assert a lien independently of the lien.
How to Handle a Hospital Lien.
Hospital liens can be tricky. If a lien is filed, your lawyer should contact the hospital and try to settle the lien. Some hospitals are more willing to negotiate a lien than others. But if the lien takes to much of the settlement funds, then there is no incentive for you or your lawyer to settle the case. Likewise, no one gets paid. Not even the hospital. Therefore, as a practical matter, hospital may be willing to negotiate their lien.
One other thing to keep in mind. Just because the hospital files a lien does not mean the hospital cannot seek collection from you in other ways. The hospital lien is there to protect the hospital only if there is any recovery in your personal injury case. But the hospital doesn’t have to wait. The hospital can seek to collect their bill in other ways. They can refer it to a collection agency or even file a lawsuit if they wish.
How to Avoid a Hospital Lien.
Easy! Don’t go to the hospital. Many people think that you are required to go to the hospital after being in an accident. But you are not. You can always refuse transport to the hospital even if the paramedics or police tell you to go. Unless you had serious injuries such as fractures, loss of consciousness, or severe lacerations, you can get adequate treatment at a minor emergency clinic. Those facilities are not considered “hospitals” and are not permitted to file liens.
Another way to avoid a hospital lien is to wait 72 hours. If the patient is admitted more than 72 hours of the accident, a hospital may not file a valid lien.
This does not mean that you should not seek medical attention at a hospital emergency room if you feel it is necessary. If you want to go to the hospital, then, by all means, GO! But do not go just for the purposes of bolstering your personal injury case.
Insurance Benefits to which a Hospital Liens Do Not Attach.
Uninsured (UM) or Under-Insured Motorist (UIM) Benefits.
Hospital liens do not attach to proceeds of your UM or UIM coverage. This is true even if the insurance proceeds relate to the same injuries.
Personal Injury Protection (PIP) and Med-Pay coverage.
A hospital lien does not apply to the proceeds of your PIP or Med-Pay, even if the benefits are paid for the actual hospital treatment.
Workers Compensation Benefits.
A hospital lien does not attach to the proceeds of a workers compensation policy. However, the policy must qualify as a “workers compensation” policy under the Texas Labor Code. If not, then a lien may attach.
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