Texas Hospital Liens

HOSPITAL LIENS IN TEXAS

Always be aware of the hospital lien in Texas. Texas has a hospital lien statute. It is located at Section 55 of the Texas Property Code. It provides that a hospital is entitled to be reimbursed for reasonable hospital bills incurred by a person admitted to a hospital not later than 72 hours after an automobile accident. If a person is admitted into a hospital within 72 hours of an injury for treatment of the injury, both the admitting hospital and hospitals to which the patient is transferred have liens on the cause of action or claim of the patient against any negligent party. The lien attaches pursuant to §55.003 to the cause of action, a judgment, and the proceeds of a settlement. Case law indicates that the hospital lien is superior even to an attorney's claim for attorney's fees pursuant to contract with the injured party, though there is some possibility of a different result when the proceeds of an insurance policy are not sufficient to pay both the attorney and the hospital lien. Bashara v. Baptist Memorial Hospital System, 685 S.W. 2d 307 (Tex. 1985). To secure the lien, §55.005 provides that notice of the lien must be filed with the county clerk of the county where the injury occurred prior to the time that any money is paid.

It is very important to know that Section 55.003(b)(3) of the Texas statute states that it does not apply to "the proceeds of an insurance policy in favor of the injured individual . . . ." In 1984 the Texas Supreme Court decided the case of Members Mutual Insurance Company v. Hermann Hospital, 664 S.W.2d 325 (Tex. 1984). The case held that hospital liens do not attach to uninsured motorist coverage. Uninsured Motorist Coverage is that part of your insurance policy that you have paid premiums for to provide a source of funds for you in the event that the person who injured you did not have any insurance. The Texas Supreme Court decision means that your insurance company should not insist on including the hospital's name on a check settling your uninsured/underinsured motorist coverage. Please remember that you are always the responsible party for any medical bills that you incur but that does not give the right for the insurance company to include the hospital on your settlement proceeds.

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