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How the Texas Hospital Liens Statute Can Affect Your Injury Damages Recovery

After you received auto accident injury treatment, the hospital may file a lien against your settlement. This lien gives the hospital the right to take funds to pay your outstanding bills. Because insurance companies often refuse to pay medical bills for accident injury care, the liens can equal thousands of dollars.

Frustratingly, you might negotiate a fair settlement only to have the insurance company write a check to you and the hospital. This ensures the hospital gets the money it claims it’s owed. But, this common practice can create headaches for you as you try to reach a settlement with the at-fault driver’s insurance company. In addition, this practice complicates recovery of your settlement funds if the lien was invalid.

When is the hospital allowed to file a lien?

The Texas Property Code Chapter 55 contains the hospital lien provisions, which give hospitals the right to place a lien on settlement funds if:

  • You received hospital care for injuries caused by an accident that was somebody else’s fault, and
  • You were admitted for hospital care within 72 hours of the auto accident.

If you were transferred to another hospital, both hospitals have the right to file liens. The doctor who treated you might also file a lien, which attaches to the hospital lien.

If your accident occurred in a rural community or a small town, you also might get hit with a lien by the ambulance that came to your rescue. The statute allows the emergency medical services provider (EMS) to file a lien against you if you received medical services in a county with a population of 800,000 or less. At least the EMS lien can’t exceed $1,000 and likewise has a 72-hour window of service requirement between the accident and the care.

The hospital lien statute only applies to third parties, not to insurance proceeds from your own policies, such as uninsured/underinsured motorist insurance coverage.

Should you challenge a lien?

You should definitely make sure the lien is valid. If it isn’t, your personal injury attorney can have it removed.

I first make sure your treatment meets the criteria described above. Then I determine whether the hospital followed the proper procedure for filing the lien, including:

  • Filing the lien in writing before your settlement was paid
  • Sending you or your attorney written notice of the lien
  • Filing the lien in the county where you received medical treatment (which is not necessarily the same as where your accident happened)

If the hospital didn’t abide by correct procedure, the lien is invalid and cannot be enforced. The hospital can still bill you, but can’t take the money directly from your settlement.

What if the lien is valid? Your accident attorney can help in this case too.

I negotiate with the hospital to settle a valid lien. This assistance can be especially important if your treatment costs exceed all of the at-fault driver’s maximum policy limits. In addition,  insurance companies wait until the issue of liens is resolved before paying a settlement, so I can speed up receipt of much-needed funds.

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