I’ve heard from a number of clients recently who were in car wrecks and received scary letters from lawyers about various hospitals filing liens on the clients’ property. Sometimes the lawyers’ letters tell the clients that the clients’ bills have gone to collections or that the hospital will be included on a settlement check. Naturally, the clients are concerned about a lien, about how the lawyers got the clients’ names and personal information, and more.
And now you may be in the same boat and have the same questions.
First, let me assure it’s nothing to be concerned about. There is nothing wrong, and the lawyers sending you letters are just trying to scare you in hopes that you’ll hire them to represent you in your car wreck case.
Here’s the more detailed response.
In the past, some personal injury lawyers would settle cases, but the lawyers would not pay the hospitals for the outstanding bills. So the hospital lobbyists went to the Texas legislature and had a law passed that gives Texas hospitals a lien on the proceeds from the victim’s cases in certain situations. So in qualifying instances, Texas hospitals can file a notice in the county deed records, and if the hospital isn’t paid back at the end of the case, the hospitals can sue the insurance companies or the lawyers involved and require the insurance company or the lawyer to pay the unpaid bill.
In the Austin area, when an accident victim goes to one of the St David’s or Seton hospitals, these hospitals typically file liens. The lien will usually state your name and address, the date of the accident, and the name of the hospital claiming the lien. But that’s about it.
The lien doesn’t cover all your property and isn’t a threat to you. The lien only applies to your settlement proceeds, it provides notice to lawyers and insurance companies that you have an outstanding bill, and it tells the lawyers and insurance companies that if they don’t pay the bill (instead giving all the money to you), then the lawyers and insurance companies are liable for those amounts.
In theory, insurance companies can include the hospital on a check to protect themselves from being sued. But normally, this isn’t a big deal at all. It’s standard that we’ll settle or resolve cases, negotiate with the hospital, and then pay them a fair amount. Usually this is an easy negotiation, though in rare cases I end up suing the hospital because they’re seeking an unreasonable amount. Once we figure out what the hospital should be paid, the insurance company will typically write two separate checks: one to the hospital for the agreed upon amount and one to you and my firm for the rest of the settlement.
Unfortunately, one byproduct of this system is that unscrupulous personal injury lawyers now hire people to search the county’s records and find cases where the hospitals file liens. Then the lawyers write the patients scary letters that make the lien sound scarier than it really is because the lawyers are trying to solicit new cases for themselves. I wish the State Bar would regulate these lawyers better because I don’t feel like they’re being completely truthful with the public and they cause people stress and anguish about things that are not really a problem. (Now, if the lawyers would write you a non-scary, and truthful letter, I don’t have much of a problem with that. What I oppose is the lawyer reaching out to you, making the lien sound worse than it is, and trying to scare you into hiring them.)
So that’s why you got the letters. The lawyerrs are just trolling for new business. They’re not bill collectors. Your account likely isn’t in collections. And this isn’t something that’s unusual or a problem. We deal with it a lot. Of course, these guys don’t tell you that it’s normal because they’re trying to scare people into calling them for new business.
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