What is a Hospital Lien?

A hospital lien is a right granted by Statute to hospitals and emergency services providers that allows them to demand payment for their services out of any money recovered by the injured person in that person’s personal injury claim against any parties responsible for causing the injury. It applies to proceeds received from any liable source including:

  • the negligent party that caused the injury
  • any employer if the negligent party was on the job
  • any other responsible third parties
  • a dram shop liability defendant
  • any insurance company for a responsible party
  • any uninsured or underinsured motorist insurance policy that applies to the accident.

The phrase: “hospital lien” is short for “hospital and emergency services lien.” It is a right created by statute that attaches automatically but must be perfected by the hospital by providing proper notice. The lien only applies only in emergency situations and to reasonable and necessary medical care provided as a result of the emergency for a set period.

Do I Have to Pay Back the Full Amount of the Lien?

surgery gone wrongUnder Chapter 55 of the Texas Property Code, the lien applies to the lesser of the following:

  •  the amount of the hospital’s charges for services provided to the injured individual during the first 100 days of the injured individual’s hospitalization;
  • 50 percent of all amounts recovered by the injured individual through a cause of action, judgment, or settlement described by Section 55.003(a); or
  • if the case goes to trial and the jury specifies an amount awarded for hospital charges for services provided to the injured person, the amount awarded by the jury for the services provided to the injured party by the hospital less the pro rata share of reasonable attorney’s fees and expenses the injured individual incurred while pursuing their personal injury claim.

This section is important for your personal injury attorney to be aware of because it is a powerful bargaining tool. If a personal injury lawsuit must be filed because the hospital is unreasonably refusing to compromise its lien, your lawyer can settle and force the hospital’s subrogation attorneys to accept the lesser of options one or two. Your lawyer can also argue that if the case must be tried, the hospital’s best-case scenario is to recover their billed amount minus a pro-rata share of fees and expenses.  This can easily cost them more than a 50% reduction in their bill. Hire a personal injury lawyer who knows this law and how to use it to your advantage!

Frequently Asked Questions About Hospital Liens

Why Did I Receive Notice of A Hospital Lien?

You most likely received this because you were recently treated a the hospital for an injury that was caused by someone else’s negligence. When you are in an accident whether it is a car accident, a dog bite, or any other type of accident, if the treating hospital suspects it was caused by someone else, they will file a lien to give notice and prevent that person or his insurance carrier from settling your case without paying the hospital’s bills.  By filing a lien in the County records and sending you written notice, they give notice to any lawyer representing you as well as any insurance company representing the person who caused your injury that failure to pay their claim will result in them suing those persons directly.

When Does a Hospital Lien Attach?

Under Texas Property Code 55.002(a), hospitals are automatically granted a lien against ‘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.’  In simple language, if you are injured due to the negligence of another such that you may bring a claim against them to recover for damages done, the hospital lien for the related care attaches to your claim immediately. For the lien to attach, the patient must be admitted to the hospital for emergency medical services within 72 hours of the event necessitating the care. Emergency medical services are defined as “services used to respond to an individual’s perceived need for immediate medical care and to prevent death or aggravation of physiological or psychological illness or injury.”  So long as the provider has a reasonable belief that the person needs immediate medical care and provides care in accordance, the lien attaches.  The lien extends to both the admitting hospital and a hospital to which the individual is transferred for treatment of the same injury.  A similar emergency medical services lien is granted to providers of emergency services such as EMS or emergency doctors in counties with less than 800,000 residents. Once attached, the provider gives notice of the claim by filing it with the county records.

What Should I Do With the Notice of a Hospital Lien?

If you already have a personal injury lawyer handling your case, you should turn the hospital lien notice over to your lawyer.  If you do not have an attorney and another person is at fault for your injuries, you should consult an attorney.  Never, settle your claim against the negligent person without making sure you have enough money and/or a plan to settle the hospital lien. If you were at fault for the injury, then the hospital lien cannot attach to your property. It only attaches to a claim for compensation that you have against another party for your injuries. You still need to make arrangements to settle your account or there are other legal remedies the hospital may pursue.

To What Does a Hospital Lien Attach?

A hospital lien attaches to any personal injury cause of action itself as well as the settlement or judgment that results therefrom.  See Texas Property Code 55.003. It does not attach to worker’s compensation benefits or the injured victim’s own non-public liability insurance policy.  This has been held to mean that the lien does not attach to the injured person’s own uninsured/under-insured motorist insurance policy because it is not “public liability insurance.” It also does not apply in certain instances with railroad employers.

What Treatment Does a Hospital Lien Cover?

A hospital lien covers the first 100 days of emergency medical care provided by the initial hospital or a hospital to which the patient is transferred for care. The amount covered is only the reasonable and necessary charges for the services–it cannot exceed a reasonable rate. “Emergency Medical Services Liens” are limited to a maximum of $1,000.00 and only cover the emergency physician’s charges for the first seven days of emergency care.

How Does a Hospital Lien Affect My Personal Injury Case?

A hospital lien creates a lien against your claim for personal injury damages that you assert against any other party. This is a type of statutory subrogation. The way it is typically perfected is by the hospital filing a qualifying lien notice in the county where the accident happened or where the services were rendered.

Once a hospital lien has been perfected, all parties, including their insurers and lawyers, are on “notice” of the lien. Failure to honor the lien by ensuring it is paid off before transferring money to the injured victim results in the hospital having a right to sue the offending party directly. So the insurance adjuster and the lawyers can become personally liable if they transfer settlement proceeds after the lien notice was filed, without paying the lien holder off first. The lien will remain on file until it is paid off and released—regardless of whether you bring a personal injury claim to recover the money or not.

How Does a Hospital Lien Affect My Credit?

If you have a hospital lien on file, the lien itself does not affect your credit. Hospital liens are purely enforceable against your personal injury claim under which the medical care subject to the lien arose. However, the underlying debt to the hospital may also be filed against your credit as an outstanding debt if you and/or your personal injury attorney fail to make arrangements to pay the lien. So, as long as you make arrangements to pay the debt so it does not go to collections, the hospital lien itself will not mess up your credit score.

How Does a Hospital Lien Affect My Ability to Sell My House?

Your ability to sell your house is not directly hampered by a hospital lien. Now some lenders may get cold feet when they see it on file because they know you have an unpaid debt and they may be concerned that the hospital will initiate collection proceedings. So if you are buying a home, odds are you may have more issues with a hospital lien than if you are selling your home. But, legally, the lien does not preclude buying or selling a home.

How Does a Hospital Lien Affect My Bankruptcy Case?

If you are in bankruptcy, typically creditors who have liens have a priority interest in your estate. The reason for this is that the lien attaches to certain tangible assets. However, a hospital lien does not attach to any physical personal or real property. It attaches to money you have not yet collected. If your bankruptcy attorney decides to pursue a recovery in your personal injury case (which they can take over when you file bankruptcy), then that money will go to the hospital. Otherwise, no other assets are affected by the lien so it does not get priority standing. The related bills will go through the bankruptcy proceedings and the lien does not prohibit the Court from discharging the debt in whole or in part.

How Do You Perfect a Hospital Lien?

To enforce the lien, it must be perfected.  The lien-holder is required to send written notice of the lien to the patient as well as file a notice of lien with the county clerk where the services were performed.  The notice must be filed before the money is paid to the injured party.  Thus, if after a car accident, another driver’s insurance pays the injured victim before a lien is filed, the hospital has no claim against the insurance company.

Who is Affected by a Hospital Lien?

Once a lien is ‘perfected,’ everyone automatically has notice of it for purposes of the law. This means that insurance companies paying settlements and lawyers collecting and distributing settlement funds for injured victims must check with the county clerk to see if any notice of a hospital lien has been filed. If they fail to locate and honor a perfected lien, the emergency services provider now has a direct cause of action against them for paying out funds without settling the lien first. Thus, if your lawyer has notice of a hospital lien, he must negotiate and settle with them or he could be sued directly by the emergency services provider in question. The provider also retains the right to sue the injured victim as well.

Do You Have to Pay the Hospital if  There Is No Lien Filed?

Whether there is a lien or not, you still have an obligation to pay the hospital’s bills. If you fail to do so, they have four years from the date the services were provided to sue you to collect on the bills. The Texas Hospital Lien Law simply extends the recourse that a hospital may seek to the tortfeasor, his insurance company, and/or representatives, and your attorney, if any of them fail to honor the lien after notice of the lien, is perfected.

How Do I Check To See If I Have A Hospital Lien Filed Against Me?

Hospital liens filings can be found on the County Clerk’s website in the county where the medical treatment was provided. Navigating the website can be confusing the first time so you should follow these steps:

  • Select “search records.” from the drop don menu.
  • Next select “Miscellaneous Personal Records.”
  • You will see a number of blanks. The only ones relevant are the” Grantor” and the “Grantee” spaces.
    • Grantor is your name since you grant a lien to the hospital against your case
    • Grantee is the name of the hospital/medical provider however, we recommend leaving this blank since sometimes the hospitals go by different legal names that you see on their advertisements.
  • Press enter and it should pull up any liens filed in that county against you.

Talk to a Personal Injury Lawyer

If you have been in an accident caused by someone else’s negligence and the bills are piling up, you have options. Talk to a personal injury attorney at Simmons and Fletcher, P.C., today to learn your rights. Don’t let a hospital lien destroy your settlement. Call 800-298-0111 today for your free consultation.

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