Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific guidance, consult a qualified attorney.
Detailed Answer
Step 1: Review Settlement Documents and Client Records
Begin by gathering all relevant records: medical bills, hospital statements, insurance policies, and the proposed settlement agreement. Identifying potential liens early prevents surprises at disbursement.
Step 2: Conduct a Lien Search
In Texas, hospitals assert liens by filing notices with the county clerk where treatment occurred, per Tex. Health & Safety Code §264.003 (link). Search county clerk records for hospital liens. Review the client’s insurance policy for subrogation provisions and check for federal liens, such as Medicare or Medicaid under the Medicare Secondary Payer Act (42 U.S.C. §1395y).
Step 3: Send Notice of Settlement and Request Lien Statements
Texas law requires lienholders to provide an itemized statement of charges. Under Tex. Health & Safety Code §264.008 (link), send each identified hospital or insurer a notice of impending settlement and a written request for their lien statement.
Step 4: Negotiate the Lien Amount
Most hospitals and insurers will negotiate reductions. Contact the hospital’s lien coordinator or the insurer’s subrogation department. Cite industry-standard billing practices and the actual settlement amount in your discussions to seek a fair reduction.
Step 5: Obtain Releases and Allocate Funds
Once you agree on an amount, secure a written release or partial release of lien. Then disburse the negotiated sum directly to the lienholder. Keep proof of payment and releases for your file.
Step 6: Final Disbursement to the Client
After satisfying all liens, deduct attorney fees and case expenses according to your fee agreement. Prepare a final accounting for your client showing all payments made on their behalf.
Helpful Hints
- Act promptly: Liens can accrue interest and may expire if not enforced.
- Track all communications in writing to avoid disputes.
- Confirm whether auto insurers or medical payment (MedPay) benefits affect subrogation rights.
- Monitor federal lien notifications, especially for Medicare or Medicaid.
- When in doubt, collaborate with a local personal injury attorney familiar with Texas lien law.