What is a Hospital Lien?

Hospital liens

A hospital lien is a right granted to hospitals and emergency services providers that allows them to claim payment for their services out of any money recovered by the injured person in a personal injury claim against someone who caused the injury.  The phrase: “hospital lien” is short for “hospital and emergency services lien.” It is a right created by statute that attaches automatically and is often accompanied by written notice of a hospital lien although this is not required. The lien applies only in emergency situations and to reasonable and necessary medical care provided as a result of the emergency for a set period.

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 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 Does a Hospital Lien Attach to?

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 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 further 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 injury 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.

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 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.