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What you need to know about Texas hospital liens in car wreck and personal injury claims

Hospital liens don't always apply

Although I focus my law practice on medical malpractice cases, I occasionally handle car wreck cases for my existing or former clients. I do this to make sure that hospitals and insurance companies don’t take advantage of my injured clients.

Over the past year, I’ve represented a client who had a botched spine surgery at a northwest Houston hospital. The surgeon’s mistakes left him unable to feel anything from the waist down and with difficulty walking and getting around, and also took away his bowel and bladder control.

To make matters worse, several months after his surgery, my client and his wife were making a legal left turn in their SUV when a young lady ran a red light and crashed into their vehicle, totaling it.

They were taken by ambulance to a Cypress-area hospital emergency room. My client was okay, but his wife’s hip was broken in the collision. Importantly for what I’m about to explain to you, they were both discharged from the emergency room without being admitted to the hospital.

Fortunately, the other driver was insured and maintained much more than the paltry minimum liability allowed by Texas law, $30,000 per injured person, up to $60,000 total per accident.

I negotiated a settlement of my clients’ car crash claim for the other driver’s policy limits, which was over $250,000. That’s was a great result for my clients, but then the insurance company said that they were required by law to pay off two hospital liens.

It pays to know the Texas hospital lien law

The insurance company adjuster told me that they’d been put on notice by the Cypress-area hospital of liens for the hospital care provided to both of my clients. For the husband, his emergency room (ER) bill was around $19,000, and for the wife it was over $38,000. Wow!

The Texas statute governing hospital liens is found in Texas Property Code Section 55.002(a), which states: “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 is a hospital lien?

A “lien” refers to a legal right to be paid. A “hospital lien” attaches to any car accident/personal injury judgment or settlement if the hospital perfects the lien by meeting all the requirements in the statute.

If a hospital puts an attorney or insurance company on notice of a hospital lien, then the lien must be satisfied out of any settlement proceeds.

How I knew there couldn’t be a hospital lien for my clients’ care

As soon as the insurance adjuster mentioned that they would have to pay both hospital liens out of the total settlement, I knew something was wrong. I told the adjuster, “That’s impossible because they weren’t even admitted to the hospital.”

This is where it pays to have an attorney who understands hospitals, their billing practices, and what Texas law allows in terms of hospital liens.

I explained to the insurance company adjuster that some hospitals will try to claim that there are liens when there are none. I then sent the insurance company a letter reciting the language from our Texas hospital statute and requesting that they do a lien check of their own.

That was last Thursday afternoon. Today I received a letter from the insurance company informing me that they could find no hospital liens after all. That means that the settlement proceeds will be sent directly to my office, saving my clients over $57,000 that would have otherwise been sent to the hospital—with little to no hope of negotiating down the inflated bill.

Why it pays to fight or negotiate hospital liens

There’s no doubt whatsoever that the hospital grossly inflated the bills of my clients, both of whom were only briefly seen in the emergency room for a few hours. Even though my clients had health coverage through Medicare and a supplemental insurance plan, the hospital applied no reductions to their charges, but instead billed them at the jacked-up full rate than virtually no one pays.

In my opinion, this is a terribly unfair racket that some hospitals run on car wreck and other personal injury victims.

These hospitals charge such patients at the full rate and then, if they’re admitted to the hospital, file a lien for that jaw-dropping high amount, which they’ll attempt to collect from any judgment or settlement. Protected by liens, many hospitals are rigid and downright nasty about reducing their lien in the event of a settlement or judgment. Some, in fact, are content with leaving patients with nothing ($0) from a settlement.

I’ve been successful at challenging abusive hospital charges by challenging them in court. Hospitals typically fall over themselves to back down because they don’t want that kind of scrutiny of their bills—particularly those hospitals who claim to be “nonprofit.”

Even worse, some hospitals try to convince insurance companies, patients, and inexperienced attorneys that they have a lien even when they don’t meet the legal requirements. That’s what I believe the hospital was trying to do to my clients. At Painter Law Firm, we quickly put an end to such nonsense.

We are here to help

If you or a loved one has been seriously injured, click here to send us a confidential email via our “Contact Us” form or call us at 281-580-8800.

All consultations are free, and, because we only represent clients on a contingency fee, you will owe us nothing unless we win your case. We handle cases in the Houston area and all over Texas. We are currently working on medical malpractice lawsuits in Houston, The Woodlands, Sugar Land, Conroe, Dallas, Austin, San Antonio, Corpus Christi, Bryan/College Station, and Waco.

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Robert Painter is a medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits against hospitals, physicians, surgeons, anesthesiologists, and other healthcare providers. A member of the board of directors of the Houston Bar Association, he was honored, in 2018, by H Texas as one of Houston’s top lawyers. Also, in 2018, the Better Business Bureau recognized Painter Law Firm PLLC with its Award of Distinction.

Robert Painter is an award-winning medical malpractice attorney at Painter Law Firm PLLC, in Houston, Texas. He is a former hospital administrator who represents patients and family members in medical negligence and wrongful death lawsuits all over Texas. Contact him by calling 281-580-8800 or emailing him right now.


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