How the Changes to the Hospital Lien Statute Are Affecting Claims: A Continued Review


Some fairly drastic changes to Chapter 55 of the Texas Property Code (aka the Hospital Lien Statute) took effect on June 10, 2019, and claims examiners are still struggling to learn how to apply those changes to their existing claims. As a result, we have put together some examples of scenarios that – under the newest version of the statute – we have been asked to address.

Things every claims examiner must remember:

  • The changes to the Hospital Lien Statute only apply if care was rendered on or after June 10, 2019
  • In order to perform a proper analysis, you must know about all coverage available to the claimant

Example 1: The claimant has $50,000 in coverage under your insured’s policy. The hospital issues a lien in an attempt to recover a $45,000 bill. In addition to the hospital bill, the injured party has $10,000 in other medical bills related to the accident. The claims examiner believes the $10,000 in bills has a reasonable value of $8,500, and the injured party is entitled to $5,000 in pain and suffering. What is the offer?

Answer: Presuming the care was rendered on or after June 10, the most the hospital could get would be 50 percent of the settlement, and the most the settlement could be is $50,000, which puts the bill at $25,000. Add that amount to the $8,500 in other medical treatment, as well as the $5,000 in pain and suffering, which comes to a total offer of $38,500. This response presumes no other coverage is available.

Example 2: The claimant has $30,000 in coverage under your insured’s policy. The hospital issues a lien in an attempt to recover a $24,000 bill. The injured party has no additional treatment, and the claims examiner believes that – based on their injuries – the claimant is entitled to $8,000 in pain and suffering.

Answer: Presuming the care was rendered on or after June 10, the most the hospital could get would be 50 percent of the settlement, and the most the settlement could be is $30,000. This puts the bill at $15,000. Add that to the $8,000 in pain and suffering for a total offer of $23,000. This response presumes no other coverage is available.

Example 3: The claimant has $30,000 in coverage under your insured’s policy. The hospital issues a lien in an attempt to recover a $10,000 bill. The injured party has no additional treatment, and the claims examiner believes that – based on their injuries – they are entitled to $2,000 in pain and suffering.

Answer: Presuming the care was rendered on or after June 10, the most the hospital could get would be 50 percent of the settlement, and the most the settlement could be is $30,000. So in this case, the hospital is entitled to recover its entire bill. Add the $10,000 to the $2,000 in pain and suffering for a total offer of $12,000. As before, this response presumes no other coverage is available.

So far, no Court of Appeals in Texas has had the chance to provide guidance on the new version of the statute. Of course, that doesn’t mean a ruling won’t be appealed at some point in the future. We will update our website to keep you apprised of any developments.