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Texas Hospital Liens

Texas Hospital Liens

Texas hospital liens are governed by Chapter 55 of the Texas Property Code.   Texas hospital liens are legal claims that hospitals place on the settlement proceeds.  These liens are intended to ensure that hospitals and emergency services providers receive compensation for the medical care they provide to patients who have been injured in accidents, particularly those involving motor vehicles.

If you’ve recently been involved in a personal injury case in Texas, you may be surprised to learn that more than 40% of settlements in the state are impacted by hospital liens. Texas has specific laws and regulations regarding hospital liens, which can significantly affect the amount of compensation you receive.

How Do Texas Hospital Liens Affect Personal Injury Settlements?

Texas hospital liens can have a significant impact on the outcome of a personal injury settlement in several ways.  Valid Texas Hospital Liens will have to be paid or resolved from any settlement proceeds.  Here are some of the ways that a valid hospital lien can affect a personal injury settlement:

Decrease in Settlement Amount: The hospital lien can diminish the final amount an injured individual receives from their settlement. This is because the lien needs to be settled using the settlement funds, which may result in the injured party receiving less money than they initially expected.

Delay in Receiving Settlement Funds: The distribution of settlement funds can be postponed as the involved parties discuss the legitimacy and the sum of the hospital lien.

Negotiating the Lien: Often, there is room to negotiate the hospital lien to a reduced figure. However, this process can be intricate and lengthy, potentially causing a delay in finalizing the settlement.

Ongoing Responsibility for Hospital Bills After Settlement: If the lien is not resolved, the injured party might still be liable for hospital expenses, even after they have received their settlement. An injury lawyer can work to negotiate a smaller payment in exchange for a complete discharge of any future debts.

Risk of Legal Action: Should the lien not be adequately addressed and paid from the settlement funds, the hospital might initiate legal proceedings against the injured party and/or their lawyer to reclaim the owed amount.

What Is a VALID Texas Hospital Lien?

A lien must be valid before a hospital can enforce it.  In Texas, the validity and enforceability of a hospital lien are contingent upon meeting several specific criteria outlined in the Texas Property Code Section 55, also known as the Texas Hospital Lien Statute. Failure to comply with these stipulations can lead to the lien being considered invalid.

Precise Identification of Involved Parties: The lien must clearly detail information about the involved parties. This includes 1) the injured person’s name and address, 2) the accident date, 3) the hospital’s name and address, and 4) the name of the responsible party, if it is known.

Filing Location: The lien must be filed in the county clerk’s office of the county where the patient was treated. A lien filed in a different county may be invalidated as per the Texas hospital lien statute.

Admission Timing: According to Section 55.002 of the Texas Property Code, for a hospital lien to be valid, the injured individual must have been admitted to the hospital or emergency room within 72 hours of the accident. This requirement links the lien directly to the injuries from the specific incident.

Charges Must Be Usual, Customary, and Reasonable: As per Section 55.004 of the Texas Property Code, the lien’s charges should only include the usual, customary, and reasonable (UCR) charges for the provided services. In determining UCR charges, Texas courts have looked at various factors, including: Accepted payments historically from self-paying patients, Negotiated rates with private health insurers Rates paid by public insurance programs like Medicare and Medicaid.

Filing of Lien Prior to Settlement Payment: The hospital lien is enforceable only if filed before any settlement payments are received by the injured party or their legal representative. A lien filed post-disbursement of settlement funds is considered invalid under the Texas hospital lien statute.

Limitation to First 100 Days of Hospitalization: The hospital lien is applicable only to charges incurred during the first 100 days of the injured party’s hospital stay. Charges beyond this period cannot be included in the lien, as per the Texas hospital lien statute. 

Limitations on Hospital Lien Amount from Injury Settlements: Texas hospitals historically aggressively pursued reimbursement from personal injury settlements, often leaving little for the patients. However, the 2019 amendments to the hospital lien statute by the Texas Legislature imposed restrictions on hospitals, especially when the lien amount is substantial relative to the total settlement. Section 55.004 now states that the hospital can recover the lesser of: The total of the hospital’s charges for services during the first 100 days of hospitalization, or Fifty percent (50%) of the total amount recovered by the injured person

Can A Hospital File A Lien and Still Pursue Collection?

Yes, a hospital can still try to collect on its claimed charges even after it has filed a hospital lien.  A hospital may refer a bill to a collection agency even after it has filed a lien in the County records.  The hospital lien protects the hospital’s right to secure payment from a personal injury recovery.  However, the hospital can still try other collection measures.  At Molina Law Firm, we work to verify that any alleged liens are valid.  Also, we work with hospitals on all valid liens to make sure that the liens are successfully reduced and resolved. 

What Happens If A Valid Texas Hospital Lien Is Not Paid?

Texas lawyers have specific duties regarding hospital liens, particularly when they are representing a client who has been awarded a personal injury settlement. It’s important to note the following critical aspects:

Obligations and Risks for Attorneys in Non-Payment Situations: If a lawyer does not pay a valid Texas Hospital Lien, then the lawyer also has risks.  In the state of Texas, a lawyer handling a personal injury case is legally bound to ensure the settlement of any hospital lien from the awarded funds.  If a lawyer recovers on a case without paying a valid lien, the hospital holds the right to initiate legal action against the attorney for the outstanding lien amount. Additionally, the attorney risks facing disciplinary measures for neglecting their fiduciary responsibilities to both their client and the hospital.

Consequences for Clients When Liens Are Unsettled: On the client’s end, failure to settle the lien can lead the hospital to actively seek the owed amount. This could involve transferring the debt to a collection agency or filing a legal suit against the client. Such actions can adversely affect the client’s credit rating and lead to further legal entanglements.

Therefore, it is important for lawyers to exercise meticulous care in handling hospital liens and for clients to be aware of their lawyer’s role in this process. Proper management of hospital liens in Texas by attorneys is essential not only for ensuring that their clients obtain the fullest possible settlement but also for fulfilling all legal and financial responsibilities.

What Benefits Are Not Covered By Hospital Liens?

Hospitals cannot establish valid liens in some circumstances.  However, these circumstances do not erase the bill that may be owed.  The lack of a lien simply means that the lawyers and the individuals are not obligated to resolve the lien from any personal injury recovery. 

Hospital liens do not apply to any recovery from your own policy such as personal injury protection (PIP) or uninsured/underinsured (UIM) policies.  

Also, hospitals cannot have valid liens in wrongful death claims.  However, hospitals can have valid liens in survival claims, which are brought by the Estate of the deceased.  

Hospital liens also cannot be established against any workers’ compensation benefits that you receive. 

How Molina Law Firm Can Help

The law regarding Texas Hospital Liens can be quite complex.  In addition to starting your accident investigation as soon as possible, it is also recommended to start investigating any liens that may affect your personal injury recovery. 

If you or a loved one has suffered a personal injury and need guidance, contact the Molina Law Firm at (713) 529-4357 or (713) Law-Help for more information or to schedule a consultation. Their team of dedicated professionals is ready to provide expert advice and representation to help you seek the fair compensation you deserve.


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