Disclaimer: This article provides general information on Texas law and does not constitute legal advice. Always consult a licensed attorney for guidance on your specific situation.
Detailed Answer
1. Identify All Potential Medical Liens
After a personal injury, medical providers and certain agencies can assert liens against your settlement or judgment. In Texas, hospitals and ambulance services may file liens under the Texas Civil Practice & Remedies Code Chapter 55 (§ 55.001–.009). Additionally, private health insurers and ERISA plans often have subrogation rights to recover benefits paid.
2. Verify Lien Validity and Amount
Hospitals must file a sworn itemized statement with the county clerk where you live or where treatment occurred within 60 days of last treatment (CPRC § 55.002). Review each lien to ensure it meets statutory requirements:
- Proper filing venue and deadline
- Accurate patient name, provider details and treatment dates
- Reasonable charges based on usual and customary rates
3. Negotiate or Challenge Overstated Liens
If you suspect a lien amount exceeds reasonable value, you can negotiate directly or challenge it in court. Under CPRC § 55.005, the court may reduce or eliminate a lien if it finds charges excessive or improperly filed.
4. Resolve Private Insurer Subrogation
Private insurers and ERISA plans often demand repayment of medical benefits they covered. Review your plan’s subrogation clause and federal ERISA rules if applicable. You may negotiate a percentage reduction or lien waiver if you advance proof of hardship or limited recovery after attorney fees and case costs.
5. Obtain Lien Releases Before Settlement
Before finalizing a settlement or judgment, secure written releases for every valid lien. For hospital liens, providers must file a release with the county clerk once paid (CPRC § 55.006). Without releases, the lien remains attached to your recovery and can delay or reduce your net proceeds.
6. Allocate Settlement Proceeds
Work with your attorney to draft a settlement breakdown: attorney fees, case expenses, medical liens, and client net award. Texas follows a common fund doctrine—attorney fees and costs come out of the total recovery, not your net. After satisfying liens, you receive the remainder.
Helpful Hints
- Keep detailed records of all medical bills and insurance payments.
- Track lien filing deadlines: hospital liens must file within 60 days of last treatment.
- Review insurance plan documents for subrogation clauses and contact the plan administrator early.
- Consult your attorney before paying any lien to ensure proper credit and release filings.
- Confirm that every lien release is recorded in the county clerk’s office.