Disclaimer: This article is for informational purposes only and does not constitute legal advice. Consult a licensed Texas attorney for guidance on your specific situation.
Do I Have to Pay Medical Liens from My Personal Injury Settlement in Texas?
Detailed Answer
When you recover money for a personal injury claim in Texas, you may face claims from medical providers or insurers who paid your treatment. These claims often come in the form of statutory liens under Texas law. You generally must satisfy valid medical and hospital liens before dividing your settlement, but you can challenge them or negotiate for a lower amount.
1. Hospital Liens under Chapter 55
Texas law grants a lien in favor of a hospital that treated you for an injury caused by another party’s negligence. Under Texas Property Code §55.002, the hospital may file a lien against your recovery for its reasonable and necessary charges. You must pay this lien out of your settlement proceeds before allocating money to attorney’s fees or other expenses. See Tex. Prop. Code Chapter 55.
2. Medical Liens under Chapter 66
Independent physicians, therapists, and other non-hospital providers can enforce liens under the Medical Lien Statute. The provider must file a written lien affidavit with the county clerk and serve all parties involved. Their claim extends only to the portion of your recovery for past medical expenses. See Tex. Prop. Code Chapter 66.
3. Priority and Satisfaction of Liens
Texas statutes establish lien priorities. Hospital liens under Chapter 55 take priority over medical liens under Chapter 66. Both statutory liens typically attach to your gross recovery, meaning you pay them before calculating attorney’s fees and court costs.
4. Negotiating or Contesting Liens
You can negotiate the amount of a lien. Providers may accept less than their full billed charges. You may also contest the validity or amount by filing a motion in the county where the lien was recorded. Be mindful of deadlines: Chapter 66 liens expire if you don’t sue or extend the deadline within one year of treatment.
5. Insurance Subrogation and Medicare/Medicaid Liens
If an insurance company covered your medical bills, it may seek reimbursement through subrogation. Federal law also allows Medicare and Medicaid to assert recovery rights. These claims differ from statutory liens but likewise reduce your net recovery. You or your attorney should coordinate settlements to address all potential claims.
Helpful Hints
- Obtain lien statements early. Request lien affidavits from all providers immediately after settlement.
- Review each lien for correctness. Verify dates, charges, and filing compliance with Chapters 55 or 66.
- Negotiate aggressively. Medical providers often settle for 40–60% of billed charges.
- Calculate gross vs. net recovery. Always deduct valid liens before attorney fees.
- Meet all deadlines. File suit or extension within one year for Chapter 66 liens.
- Consult counsel. A Texas personal injury attorney can help you navigate lien resolution and ensure proper distribution of settlement funds.