Texas Insurance And Hospital Liens

What happens if you get treated at a hospital in Grand Prairie, Arlington, Fort Worth, Dallas, Weatherford, or anywhere else in Texas and the treatment was the result of an accident that someone else caused? Guess what the lawyers answer is! It depends!
The Texas Property Code, Section 55.002, states in part that “A hospital has a lien on a cause of action or claim of an individual who receives hospital services for injuries caused by an accident that is attributed to the negligence of another person.” Okay! What does this mean? This is answered by Section 55.003(a), where its states in part, the lien attaches to:
(2) a judgment of a court in this state … brought by the injured individual … to recover damages arising from an injury for which the injured individual is admitted to the hospital or receives emergency medical services; and
(3) the proceeds of a settlement of a cause of action or a claim by the injured individual or another person entitled to make the claim, arising from an injury for which the injured individual is admitted to the hospital or receives emergency medical services.
Let’s boil this down to say that if you are injured in a car wreck that is the fault of someone else and the other person has insurance, then when the other person’s insurance pays, the hospital lien has to be paid because the hospital lien attaches to the insurance proceeds.
Now let’s give it a different twist. What if the other person does not have insurance? In other words they are uninsured and you have uninsured motorist coverage on your auto insurance policy? Are the insurance benefits you receive subjected to the above hospital lien statute? Answer – No!
This answer is discussed in a 1984, Texas Supreme Court case styled, Members Mutual Insurance Company v. Hermann Hospital. The exact issue in this case was whether the insurance proceeds from uninsured/underinsured motorists coverage are subject to the hospital lien statute. This court said no.
The facts were not in dispute. Dorothy Jean Hall had an automobile liability insurance policy issued by Members Mutual Insurance Company. The policy included uninsured/underinsured motorists coverage. Hall was injured in an accident caused by uninsured driver. Hall was treated at Hermann Hospital and incurred over $60,000 in medical bills. Members paid Hall by way of the uninsured portion of the policy. Hermann sued Members saying Hermann should have been paid before Members paid any money to Hall. Hermann cited the above statute.
For the most part, the insurance companys and hospitals understand how this statute works but occassionally this becomes an issue. If it happens to you, call an experienced attorney for help.