When someone arrives at a hospital after a severe car accident, there is often no time to verify insurance coverage. Texas law requires hospitals to provide emergency care regardless of the patient’s insurance status. So what happens when medical expenses are incurred and the patient is uninsured or unable to pay out of pocket? In Texas, these situations are commonly addressed through hospital liens.
Understanding hospital liens
A hospital lien allows a medical provider to claim a portion of any compensation a patient receives from a personal injury lawsuit or insurance settlement. Under Chapter 55 of the Texas Property Code, a hospital can assert a lien against a claim for damages arising from injuries caused by another person’s negligence.
A lien attaches to:
- The injured person’s claim for damages against the person at fault
- A court judgment on that claim
- The proceeds of a settlement of that claim
It does not attach to a workers’ compensation claim, to a claim under the Longshore and Harbor Workers’ Compensation Act or the Federal Employers’ Liability Act, or, apart from liability coverage the injured person carries, to the proceeds of the injured person’s own insurance policy.
Lien requirements and restrictions
Texas law sets specific guidelines for a valid hospital lien:
- The injured person must be admitted to a hospital within 72 hours after the accident for a hospital lien to attach, and the lien extends to a hospital the person is transferred to for the same injury.
- A hospital lien covers charges for the first 100 days of hospitalization and may include an emergency physician’s reasonable and necessary charges for emergency hospital care during the first seven days. It is capped at the lesser of those charges, 50 percent of everything the injured person recovers, or, when a jury specifies the hospital charges it awards, that amount less a share of attorney’s fees and expenses.
- A separate lien for emergency medical services (ambulance) providers exists only in counties with a population of 800,000 or less, covers services provided within 72 hours after the accident, and is capped at $1,000. Hospital liens are not limited by county population.
- A lien does not cover charges that exceed a reasonable and regular rate for the services.
To be enforceable, a lien must:
- Name the patient and the patient’s address, the date of the accident, the hospital or provider claiming the lien, and, if known, the person alleged to be at fault.
- Be filed with the county clerk of the county where the services were provided, before any money is paid on the claim.
- Be followed by written notice mailed to the patient within five business days after the county clerk confirms the lien was recorded, stating that the lien attaches to the patient’s claim and not to the patient’s real property.
An improperly filed lien can be challenged and potentially invalidated, although the statute provides that a patient’s failure to receive the mailed notice does not by itself invalidate a lien.
Resolving hospital liens
Resolving hospital liens can be challenging because insurers often refuse to disburse settlement funds until the liens are settled. Hospitals prefer liens because they typically produce higher payments than standard insurance reimbursements, and many people mistakenly believe they must forfeit a significant portion of their settlement to a hospital lien.
A personal injury lawyer can help. Negotiating and resolving hospital liens is part of the work of closing a case, and how a lien is resolved affects what a client keeps.
If you or someone you know is dealing with a hospital lien after a car accident, tell the lawyers at Leatherwood & Schindler what happened. The firm describes elsewhere how a car accident claim is built.