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  • Writer's pictureNicole Linko


If you are injured in an auto accident and taken to a hospital emergency department, it is highly likely the hospital will file a hospital lien against any recovery you might make. It is important for auto accident victims to understand this process because you cannot settle your case unless the hospital lien is satisfied because no third party liability insurance carrier, in my experience, will settle the case without the hospital lien being satisfied.

Hospitals in Texas act very greedy when an auto accident victim shows up in their emergency rooms. Hospitals may issue a large bill that no health insurance company, Medicare or Medicaid would be required to pay, and then file a hospital lien to make sure the victim cannot settle with the negligent third party until the hospital gets paid. Health insurance companies, Medicare and Medicaid basically pay about 10 to 20 cents on the dollar of the bill. Once a hospital accepts payment from a health insurance company, Medicare or Medicaid, the hospital cannot go after the victim for the unpaid balance. However, hospitals cleverly do not bill the health insurance company, Medicare or Medicaid when they learn the victim was in an auto accident and that the injuries were caused by a negligent third party. The hospital files a lien for a very over-inflated amount. What’s more, Texas law protects the hospital and gives the hospital a legal right to get first money out of an auto accident victim’s recovery, even if it means that the auto accident victim may get Zero.

A Texas case: Speegle v. Harris Methodist, 303 S.W.3rd 32, (CA – Ft Worth) 2009, the court held the hospital could choose whether to bill Medicare or file a hospital lien, and if the hospital chooses the hospital lien route, the hospital could charge for the actual charges, up to the amount of the proceeds of the liability insurance less applicable procurement costs. There is other case law that seems to contradict Speegle. In a different context, the Texas Supreme Court Haygood v. Escabedo, 356 S.W.3d 390, 392 (2011) stated that federal law prohibits health care providers who agree to treat Medicare patients from charging more than Medicare has determined to be reasonable. It is most likely that the maximum amount a hospital can put into a hospital lien is the amount that Medicare would have paid, and not the inflated amount that no one pays.

It is important to make sure that hospital lien amounts are corrected to the amount Medicare would pay and not the inflated amount.

An auto accident victim who has treatment in a hospital emergency department should strongly demand that the hospital bill Medicare, Medicaid, or his/her health insurance carrier, whichever is applicable. Negotiating with the hospital to reduce the lien is often worthwhile, but just as often the hospital will not budge. You must know your rights and the law on the maximum amount a hospital can put into a hospital lien. If the hospital fails to comply with the law set out in the Haygood v. Escabedo, the hospital could be liable for damages, costs, exemplary damages, and attorneys’ fees under the Texas Fraudulent Lien statute.

The elements of a Fraudulent Lien claim are: (1) the hospital, presented, or used a document with knowledge that it was a fraudulent lien, (2) the hospital intended that the document be given legal effect, and (3) the hospital intended to cause the auto accident victim physical injury, financial injury, or mental anguish.

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