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The Definitive Guide to Hospital Liens in Personal Injury Cases

May 14, 2019 - Personal Injury by

If you go to the hospital after an accident, the hospital may have the right to be paid back with the personal injury settlement that you receive. In this article, we will explain the key things to know about hospital liens.

We’ll also discuss how to legally lower the amount of a hospital lien so that the lien takes away less of your personal injury settlement. It’s important to note that “lien resolution” (reducing the amount of your liens) is something that your personal injury lawyer should handle for you.

Hospital Liens in a Personal Injury Case

What is a hospital lien?

So what is a hospital lien exactly? A “lien” is simply a right to claim some of the money you receive in a personal injury case. In the context of a personal injury case, the hospital that treats you after an accident may be allowed to recover some of the money that you’re paid in a personal injury settlement.

This makes sense when you think about it from the hospital’s perspective. The hospital provided you treatment, and it knows that an insurance company may compensate you to cover, in part, your medical expenses.

It’s only fair, then, that your personal injury settlement should help pay back the hospital’s expenses that it incurred in treating you. This helps ensure that our hospital systems remain financially sound and incentivizes them to adequately treat you for your injuries.

What allows the hospital to secure a lien against my settlement?

The short answer is that the Texas Legislature has decided that hospitals should have the right to claim some of your personal injury settlement. The Texas law (or statute) that allows hospitals to claim part of the proceeds in your case is Texas Property Code Section 55.002(a). This state law says:

“A hospital has 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. For the lien to attach, the individual must be admitted to a hospital not later than 72 hours after the accident.”

What about my particular case – does the hospital have the right to place a lien on my settlement?

The short answer is that we can’t give you an answer without hearing more about your particular case. But generally, the hospital can only place a lien on your settlement if you sought treatment from a hospital within 72 hours after the accident.

This lien follows you if you are transferred to another hospital. More specifically, under the Texas law cited above, both the admitting facility and the hospital to which you are transferred are entitled to lien, so long as both hospitals are treating you for the same injury.

What if I accidentally don’t pay or otherwise ignore the lien?

Given the staggering cost of medical care, some individuals are frustrated by having to pay back the hospital out of their personal injury settlement. Nevertheless, there are serious consequences for failing to pay back the lien.

To put it plainly, if you inadvertently or purposefully fail to pay back the hospital lien, the hospital can sue you to recover its charges. Moreover, if the hospital must sue you to recover its lien, it can also charge you for the expenses it incurred in hiring an attorney to sue you.

That’s one of the reasons we encourage you to hire an attorney for your personal injury case. Your attorney, as well as the attorney for the other side of the case, are required to make sure that any hospital liens are paid back in full.

What steps does the hospital have to take in order to have a valid lien?

The hospital does not automatically have a lien against the settlement in your personal injury case. The hospital must take certain steps first in order to secure the lien. These steps include filing the proper notice of the lien in the Texas county in which the hospital services were rendered to you.

A critical requirement is that the hospital must file the lien before the distribution of settlement funds. If the hospital fails to do so, the lien is unenforceable against your settlement.

My hospital bills are very high. What does that mean for me in my case?

These days, it’s unfortunately common to receive large medical bills after a visit to the hospital. And everyone knows that, for various reasons, a hospital’s charges are often inflated.

Nevertheless, the law does set a limit on how high your lien can be. A hospital can only charge you for “reasonable and regular” charges for its services.

You can also negotiate the lien down. In fact, part of our job as personal injury attorneys is to negotiate down any liens in your case. We have tremendous experience in doing this, so we know how to approach the specific challenges in your case.

If you think that certain hospital charges are fraudulent, the law also allows you to fight these charges. Chapter 12 of the Texas Civil Practice & Remedies Code contains the fraudulent lien statute in Texas. This law is quite helpful to consumers, as it does a decent job punishing fraudulent behavior.

In fact, under Chapter 12, if a lien is found to be fraudulent due to unreasonable and irregular charges, the hospital must pay the patient $10,000 or more, in addition to court costs, attorney’s fees, and punitive damages, as determined by the court.

The hospital did not charge my health insurance. Why is that the case?

Unfortunately, this is a common tactic. Some hospitals realize that they will recover more from their lien than they would by seeking reimbursement from your health insurance. Simply put, the hospital realizes that the insurance company will fight to reduce the amount that it pays the hospital for the treatment.

That’s where it’s important for a personal injury lawyer to help negotiate down your lien. In other words, our job is to attempt to do essentially the same thing your health insurer does: argue against unreasonable hospital charges to help lower them and therefore lessen your financial burden.

Are there any types of cases where a hospital lien does not apply?

Yes. There are several types of monies that you might collect under an insurance policy after an accident, and some of these monies are not subject to a hospital lien. Specifically, a hospital lien cannot attach to monies collected under your “Personal Injury Protection” (PIP) policy or your Uninsured/Underinsured Motorist (UIM) policy.

In cases involving a tragic death, there are also specific claims to which a hospital lien will not attach. For instance, it is common after a fatal accident to bring both a “wrongful death” as well as a “survival” claim. A survival claim seeks compensation for the pain and suffering that the deceased suffered before dying, whereas the wrongful death claim is more for the benefit of the remaining family members.

In this situation, a hospital lien will not apply to a wrongful death claim. Hospital liens do attach to survival claims.

As a final matter, a hospital lien also does not apply in Worker’s Compensation cases. These cases are subject to their own special laws and regulations in Texas.

What should I do if I have a question about my hospital lien?

Simply put, if you have concerns about the hospital lien in your case, speak with an experienced personal injury attorney. We’ve handled personal injury claims across the country for nearly 40 years.

We’ve also been quite successful at substantially reducing hospital liens. You don’t have to hire us, but we encourage you to call us to at least see what your options are if you’re facing a difficult hospital lien after an accident.

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