HOSPITAL LIENS IN TEXAS

HOW A LIEN CAN AFFECT YOUR PERSONAL INJURY CASE

If you were involved in an accident and went to an emergency room within 72 hours of the accident, you will probably have to deal with a hospital lien. What's more, if you went back to the emergency room as a result of the accident, whether one time or multiple times, whether to the same hospital or a different hospital, you will have to deal with more than one lien. Why do I say you will have to deal with the lien? Because the adjuster will not settle your claim until the lien is resolved.

THE STATUTE

The hospital lien statute is found in Chapter 55 of the Texas Property Code. Section 55.002 gives hospitals a lien on a cause of action or a claim of anyone "who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person". The only prerequisite is that the injured person must have been treated within seventy-two hours of the accident. The law gives any hospital to which you are transferred a lien as well. Case law has extended this to mean that any subsequent hospital has a lien. This means that if you go to hospital A within 72 hours of the accident, and some time thereafter, you go to hospital B, Hospital B has a lien also.

Under Section 55.003, a hospital lien can attach to a cause of action, a judgment, or a settlement. It does NOT attach to a worker's compensation claim. Neither does it attach to your own insurance. In other words, it does not attach to a UM/UIM claim.

In order to secure the lien, the hospital must file a written notice of lien with the county clerk of the county in which the services were provided and provide notice to the injured individual. This must be done BEFORE the money is paid to the individual. So, if you settle your claim and the insurance company writes you a check BEFORE the notice of lien is filed, the lien cannot attach.

HOW FAR DOES THE LIEN REACH

A hospital lien can attach to you, your attorney, and the insurance company. That is why the adjuster will not settle your claim unless the hospital lien is resolved. This is also why your attorney will work diligently to either resolve it or make sure no lien has been filed. Usually, your attorney will negotiate the lien, obtain a written agreement signed by the hospital's attorney, and then send check-writing instructions to the adjuster along with the signed agreement, allowing the adjuster to pay the hospital out of your settlement.

YOUR ATTORNEY'S ROLE

Personal injury cases frequently involve hospital liens and resolving them is something we personal injury attorneys do on a regular basis. Your attorney should investigate and determine whether the hospital lien is valid. I have defeated hospital liens because my client received treatment after the 72 hour period, because the institution claiming the lien did not meet the definition of "hospital", and because the lien was not on file before the insurance paid the claim. My most interesting case involved a free-standing emergency clinic claiming a lien. I was able to show that the facility did not meet the definition of "hospital" as defined in the statute and the lien was removed.

Once you attorney determines the lien is valid, he should negotiate a discount. It is important to note that these discounts are usually only available to you if you have an attorney. This is the hospital's way of compensating you for your attorney fees. So, if you handle your own claim, chances are you will have to pay the full amount of the lien.

ADJUSTERS AND LIENS

Nothing gets your adjuster's attention like a lien. A missed lien can expose her company to a financial loss and can cost your adjuster her job. Consequently, as soon as a claim is settled, the adjuster will check the county clerk's records prior to paying the claim to make sure there is no lien on file. If there is a lien, your attorney must negotiate it. The adjuster will then write a check to the hospital in that amount and write a check for the rest of the settlement amount to you and your attorney.

UIM CLAIMS

A hospital lien does not attach to an Uninsured motorist claim nor to an Underinsured claim. Once your attorney proves to the hospital's attorney that the claim is not a liability claim but a claim against your own insurance company, the hospital will stand down. This does NOT mean, however, that the debt is forgiven. You will still owe the hospital. It's just that the hospital cannot force your insurance company to pay it out of the settlement. Some clients choose to not pay it and deal with it later, and some choose to have the attorney negotiate it and, if the reduction is attractive, go ahead and pay it out of the settlement and be done with it.

WRONGFUL DEATH CASES

In death cases where the deceased incurred hospital care before succumbing to his injuries, the hospital lien attaches to the survivorship cause of action but not to the wrongful death cause of action. (See my paper on wrongful death cases found in the "articles" tab on my web site). If the limits can be exhausted by the wrongful death claim alone, then the attorney can defeat the hospital lien by making a wrongful death claim only and waiving the survivorship claim. That way the heirs under the wrongful death statute do not have to pay the hospital out of the settlement. Again, this does not mean that the debt is forgiven. The debt is part of the deceased's estate. In many cases, the deceased did not leave an estate that can be reached by creditors, so the debt is of no consequence.

CONCLUSION

Hospitals provide a valuable and, frequently, a life-saving service and should be paid if at all possible. The lien statute is there to make sure they are paid when the person that caused the injuries pays the injured person. If you have any questions about your case or a hospital lien, contact me.

Robert Rodriguez, attorney