Car Wreck – Personal Injury Problem: Hospital Liens

Sunday’s Austin American Statesman had a wonderful article about hospital liens, a problem that can really muck up a car wreck or other personal injury claim.

Texas law provides that if a person is injured in an accident and is admitted to a hospital within 72 hours of the accident, then the hospital has a lien against any recovery for the amount of the care. (You can read the entire statute here.)

That sounds reasonably fair — hospitals should get paid for their services.  Except that many hospitals are abusing the statute in an unfair manner. 

There are two problems in the way that hospitals abuse the statute.  First, they charge ridiculous prices.  When you go to a hospital, you don’t get to sit down and negotiate prices or look at a menu with the services and prices next to them and choose what you want.  The hospitals decide what treatment you need (as they should) and then they also get to set the prices.  Unfortunately, the prices that they set in the personal injury context are ridiculously high prices that no one really pays.  It’s a pie-in-the-sky number that they try to force on injury victims.

Second, they abuse the system by trying to charge these prices even when other insurance or other payment sources, such as Medicare, are available.  Because the amounts for the services are so much higher than what an insurance company or Medicare would pay for the same services, hospitals often forego payment from these sources and then file the lien hoping to get the inflated prices from the injured victims. 

In the health insurance context, the Texas legislature has tried to fix the law, passing a statute that requires hospitals to submit claims to available health insurance companies when the coverage is available.  However, there is a bit of a debate about whether that law applies to Medicare or other similar proceeds.  As a result, hospitals are refusing to bill Medicare and similar providers in this context to try to get the higher amounts from you.

We need the legislature to again step in and clarify that the lien is not valid if the hospital fails to submit the claims to Medicare.  Until then, our only course of action is to sue the hospital for a declaration that the charges are unreasonable.  This causes all the parties to incur unnecessary attorneys’ fees and just causes unnecessary stress for injured victims, but it’s the only mechanism for resolution we currently have.

I do encourage you to read the article.  They have more time to write about the problem, and they share stories that really show how it affects you as victims.  Also,  representatives of one of Austin’s most aggressive lien filers make some very questionable statements in the article about their practices.  In some, but not all, of those cases, the author of the article calls them on it. 

I’m just thankful that this problem has reached the popular press.  Maybe the publicity will cause some changes.

Perlmutter & Schuelke, PLLC maintains offices in Austin, Texas. However, our attorneys and lawyers represent clients throughout the state of Texas, including Dallas, Houston, San Antonio, Forth Worth, El Paso, New Braunfels, San Marcos, Kyle, Buda, Round Rock, Georgetown, Lockhart, Bastrop, Elgin, Manor, Brenham, Cedar Park, Burnet, Marble Falls, Temple and Killeen. By Brooks Schuelke


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