Texas Governor Greg Abbott recently signed House Bill 2929 into law, which immediately changed the way hospital liens work in Texas.
When it comes to liens and subrogations, Texas law is unfriendly to negligence victims. When there's a settlement because someone was injured by someone else's carelessness, Texas law allows insurance companies to swoop in at the last minute and take a chunk of the recovery.
Hospital liens give hospitals certain authority to file a lien on any claim or cause of action that the patient has arising from someone else’s negligence. These often come up in car wrecks, where an at-fault driver injures someone in an accident, and the injured person is treated in a hospital.
The importance of this to plaintiffs in Texas personal injury and some medical malpractice cases is that both plaintiffs and their attorneys are legally obligated to satisfy hospital liens out of any judgment, settlement, or recovery related to the accident.
Exactly what legally triggers a hospital’s right to file a lien is defined by Texas Property Code Chapter 55. Until the recent amendment to the law, the injured person had to be admitted to a hospital within 72 hours of the accident.
The new law, which is currently effective, expands hospital rights with this new language in Section 55.0015, “For purposes of this chapter, an injured individual is considered admitted to hospital if the individual is allowed access to any department of the hospital for the provision of any treatment, care, or service to the individual.”
In other words, a patient no longer has to be admitted in order for the hospital to be able to file a lien. Even if the patient never left the emergency room, any lab work or radiology scans would be enough for the hospital to file a lien.
The new law also defined some limits on hospital liens. Under the new, currently effective version of Section 55.004, the hospital lien is capped at the lesser of:
(1) the amount of the hospital’s charges for services provided to the injured individual during the first 100 days of the hospitalization; or
(2) 50% of all amounts recovered by the injured individual in a lawsuit or settlement.
The take-home message? This newly amended law is great news for hospitals and bad news for some patients.
Some hospitals take an aggressive approach and charge astronomically-high rates to uninsured patients who received treatment after an accident. They use these full rates, which they would never charge to Medicare, Medicaid, or a health insurance company, and stick it to their patients by filing a hospital lien.
When it comes to Texas personal injury or medical malpractice, it’s important for clients to hire a top-rated experienced attorney who is aware of the current law and who can steer them in the right direction.