Hospital Liens – Can They Affect My Personal Injury Case?
A hospital lien is a right granted to hospitals and emergency services providers that permits them to receive payment for their services out of any money recovered by a person injured in an accident in a personal injury claim against someone who caused the injury.
In 2019, in an attempt to help hospitals recover payment for medical treatment and services rendered for emergency services, the Texas legislature created statutory hospital liens. Chapter 55 of the Texas Property Code gives hospitals the power to place liens on the settlement funds of accident victims who receive emergency hospital services within 72 hours of an accident. Under Texas Property Code 55.002(a), hospitals are granted a lien on ‘a cause of action or claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person.’
To secure the lien, the hospital must file written notice of the lien with the county clerk of the county where the medical services were provided and notify the victim of the lien before the settlement funds are paid. The lien applies only in emergency situations and to reasonable and necessary medical care provided as a result of an emergency.
In 2019, in an attempt to help hospitals recover payment for medical treatment and services rendered for emergency services, the Texas legislature created statutory hospital liens. Chapter 55 of the Texas Property Code gives hospitals the power to place liens on the settlement funds of accident victims who receive emergency hospital services within 72 hours of an accident.
The statute also makes liens valid for “emergency medical services providers,” under certain circumstances which includes emergency transportation companies and emergency room doctors. Generally, if the county in which you were treated has a population of 800,000 or less, emergency medical service providers can file a lien.
What is a valid lien?
In order to be valid, the hospital or emergency services company must meet the following requirements when filing a lien against an individual’s claim:
- The hospital or emergency services company filed the lien in writing BEFORE the claimant was paid the settlement;
- The hospital or emergency services company mailed the claimant (or their legal representative) a written notice of the lien; and
- The hospital or emergency services company filed the lien in the county where the claimant received their services.
By filing a lien in the County records and sending you written notice, they give notice to any lawyer representing you as well as any insurance company representing the person who caused your injury that failure to pay their claim will result in them suing those persons directly.
Why Did I Receive Notice of A Hospital Lien?
You most likely received a Notice of a Hospital Lien because you were recently involved in an accident that was caused by someone else’s negligence and treated at the hospital and/or received emergency medical services for injuries from that accident. When you are in an accident whether it is a truck accident, a car accident, a dog bite, a slip and fall or any other type of accident, if the treating hospital and emergency medical service provider suspects it was caused by someone else, they can file a Hospital Lien to prevent that person or his insurance carrier from settling your case without paying their respective bills.
When Does a Hospital Lien Attach?
A lien attaches immediately upon the lien-holder filing a notice of lien with the county clerk where the services were performed and sending written notice of the lien to the injured party as well as.
For the lien to attach, the patient must be admitted to the hospital for emergency medical services within 72 hours of the event necessitating the care. Emergency medical services are defined as “services used to respond to an individual’s perceived need for immediate medical care and to prevent death or aggravation of physiological or psychological illness or injury.” The lien extends to both the admitting hospital and a hospital to which the individual is transferred for treatment of the same injury. Under Texas Property Code 55.002(c), a similar emergency medical services lien is granted to providers of emergency services such as EMS or emergency doctors in counties with less than 800,000 residents. Once attached, the provider gives notice of the claim by filing it with the county records.
It should be noted, a hospital and/or emergency services lien filed after the case is settled but before the plaintiff’s attorney pays the client attaches. The injured party and/or their counsel will want to confirm there is no lien on file prior to negotiations and then condition settlement on the defense’s promise not to call the hospital to trigger a lien. In addition, if the lien is received by the clerk but not indexed before the carrier pays, the lien attaches even though a diligent search of records did not reveal the lien. “[T]he lien is secured on filing, and thus [the Hospital] is entitled to allocation of the settlement proceeds.” The statute only requires the hospital to file before the funds are paid.
What Does a Hospital Lien Attach to?
Under Texas Property Code 55.003, a hospital lien attaches to any cause of action for damages arising from an injury for which the injured individual is admitted to the hospital or receives medical services. In fact, it directly attaches to any settlement proceeds or judgment.
However, it does not attach to the injured party’s own insurance policy, including uninsured/under-insured motorist insurance policies, and does not attach to worker’s compensation benefits.
What Treatment Does a Hospital Lien Cover?
A hospital lien covers the following:
Health care services provided in a hospital to evaluate, stabilize, and treat a serious medical problem of recent onset or severity, including severe pain that would lead a prudent layperson possessing an average knowledge of medicine and health to believe that the condition, illness, or injury is of such a nature that failure to obtain immediate medical care would in all reasonable probability:
- seriously jeopardize the patient’s health;
- seriously impair one or more bodily functions;
- seriously harm an organ or other part of the body;
- cause serious disfigurement; or
- in the case of a pregnant woman, seriously jeopardize the health of the fetus.
A hospital lien also covers the first 100 days of emergency medical care provided by the initial hospital or a hospital to which the patient is transferred for care. The amount covered is only the reasonable and necessary charges for the services–it cannot exceed a reasonable rate.
It is extremely important to note, that under Texas Property Code 55.004 (b), the amount of a hospital lien is limited to the lessor of:
(1) the amount of the hospital’s charges for services provided to the injured individual during the first 100 days of the injured individual’s hospitalization; or
(2) 50 percent of all amounts recovered by the injured individual through a cause of action, judgment, or settlement.
For example, if you settle a claim for $30,000 and the claimant has a hospital lien in the amount of $50,000, the hospital is not entitled to more than $15,000 of the settlement. This statute plays a significant role in cases with high damages, but low policy limits.
Who is Affected by a Hospital Lien?
Once a lien filed in the county clerk where the services were performed, for purposes of the law everyone automatically has notice of it. This means that all parties, including insurance companies paying settlements and lawyers collecting and distributing settlement funds for injured victims, must check with the county clerk to see if any notice of a hospital lien has been filed. If they fail to locate and honor a perfected lien, the hospital and/or emergency services provider now has a direct cause of action against them for paying out funds without satisfying the lien first.
Thus, if we, as your attorneys, have notice of a hospital lien, we must negotiate it and work to satisfy the lien with a portion of the settlement proceeds, or we could be sued directly by the hospital and/or emergency services provider. The hospital and/or emergency services provider also has the right to sue the injured party as well.
Do You Have to Pay the Hospital if There is No Lien Filed?
Whether there is a lien or not, you still have a legal obligation to pay the hospital’s bills. If you choose not to do so, the hospital and/or emergency services provider has four years from the date the services were provided to sue you to collect on the bills.
Texas Property Code Chapter 55, Hospital and Emergency Medical Services Liens basically extends the hospital’s and/or medical services provider’s ability to recover payment for medical services rendered for emergency services from the liable party’s insurance company, the injured party, and/or their attorneys, if any of them fail to honor the lien after notice of the lien is filed.
Never, settle your claim against the negligent person without conducting a diligent search for any hospital and emergency medical services liens. If a lien is not filed while negotiating settlement, you can continue to negotiate the settlement, but you will want to confirm there is, in fact, no lien, and condition settlement on there being no lien and/or defense’s promise not to call the hospital to trigger a lien. It is imperative that prior to settling a claim, you must check the county records to see if a lien has been filed. If there is no lien, have the attorney/recipient of the check sign and date a receipt (with time) upon receipt of the check. If a hospital lien is filed after the date and time the settlement check was disbursed to the injured party, the parties will need to be able to prove there was no lien on file at the time the settlement was funded.
What Should I Do With the Notice of a Hospital Lien?
If you already have a personal injury attorney handling your case, you should immediately turn the hospital lien notice over to your attorney. If you do not have an attorney and another person is at fault for your injuries, you should consult our experienced attorneys at Chandler | Ross, PLLC.
CONTACT US TODAY
The injury attorneys at Chandler | Ross, PLLC are here to help you. With offices in Denton, Dallas, Southlake, Keller and Fort Worth, Texas, we are well positioned to help protect you. Don’t wait, and don’t compromise – contact us today to see how we can help. The consultation is free, and you owe nothing unless we recover for you. Contact us now at (940)-800-2500 or Support@ChandlerRossLaw.com .
