In Texas, a hospital that treats you after an accident can place a lien on your injury claim, which means part of your settlement must go to pay the hospital before you can sign a valid release. Chapter 55 of the Texas Property Code limits that lien: it generally can’t be more than the hospital’s reasonable charges for your first 100 days in the hospital, and it can’t take more than 50% of what you recover. Other lienholders, such as Medicare or a health plan, follow different rules. Knowing which liens are valid, and for how much, can change how much money actually reaches you.
Key takeaways
- A Texas hospital lien attaches to your injury claim only if you were admitted within 72 hours of the accident (Tex. Prop. Code § 55.002).
- The lien is capped at the lowest of several amounts, including 50% of your recovery (Tex. Prop. Code § 55.004).
- To secure its lien, the hospital must file a notice with the county clerk before settlement money is paid (Tex. Prop. Code § 55.005).
- A release signed without paying a properly filed hospital lien is not valid against the hospital (Tex. Prop. Code § 55.007).
- You generally have two years from the date of injury to file a personal injury lawsuit in Texas (Tex. Civ. Prac. & Rem. Code § 16.003).
What is a hospital lien?
A lien is a legal claim on money or property. In a Texas injury case, a hospital lien is the hospital’s legal right to be paid out of your claim against the person who caused your injuries. The lien doesn’t erase the hospital bill; it gives the hospital a way to be paid directly from the money you recover from the at-fault party.
Under Tex. Prop. Code § 55.002, a hospital has a lien on a cause of action or claim of a person who was admitted to the hospital within 72 hours after the accident. The lien also covers a hospital you were transferred to for treatment of the same injury. Emergency medical services (ambulance) providers can have a similar lien in counties with a population of 800,000 or less, for services provided within 72 hours of the accident, but that EMS lien is capped at $1,000 (Tex. Prop. Code § 55.004(f)).
What the lien attaches to
Under Tex. Prop. Code § 55.003, the lien attaches to your cause of action, to any judgment, and to settlement proceeds from the claim. It does not attach to:
- Workers’ compensation benefits under Texas law or certain federal programs.
- Most insurance proceeds payable to you under your own policies. The exception is public liability insurance, such as the at-fault driver’s liability coverage.
The notice the hospital mails you must also state that the lien does not attach to real property you own (Tex. Prop. Code § 55.005(d)). In plain terms, a hospital lien is not a lien on your house.
How much can a Texas hospital lien be?
Texas law limits the size of a hospital lien. Under Tex. Prop. Code § 55.004(b), the lien is the lowest of:
- The hospital’s charges for services during the first 100 days of your hospitalization;
- 50% of all amounts you recover through a judgment, settlement or claim; or
- If a jury or judge specifically awards hospital charges, that award minus your proportionate share of attorney’s fees and expenses.
The lien also cannot include charges above a “reasonable and regular rate” for the services (Tex. Prop. Code § 55.004(d)). That limit matters, because hospital bills are often based on full “chargemaster” prices that few people or insurers actually pay.
Physician charges
The hospital lien can include a physician’s reasonable and necessary charges for emergency care during the first seven days of hospitalization (Tex. Prop. Code § 55.004(c)). But it cannot include physician charges that were paid or accepted under your health insurance or a private medical plan, or that are covered by an assignment of benefits (Tex. Prop. Code § 55.004(d)).
How does a hospital secure its lien?
A hospital lien is not automatic in every case. To secure it, the hospital must file a written notice of the lien with the county clerk in the county where it provided the services, before money is paid to you because of the injury (Tex. Prop. Code § 55.005(a)).
After the clerk records the lien, the hospital must mail written notice to you (or your legal representative) at your last known address within five business days (Tex. Prop. Code § 55.005(d)). However, the law says that not receiving the mailed notice does not by itself make the lien invalid (Tex. Prop. Code § 55.005(g)).
This is why injury lawyers check the county records before a case settles. A properly filed lien has to be dealt with. A lien that was never filed, or was filed after the money was paid, may not be enforceable the same way.
What happens if you settle without paying the lien?
Under Tex. Prop. Code § 55.007, a release of a claim that a hospital lien attaches to is not valid unless one of the following is true:
- The hospital’s charges were paid in full before the release was signed and delivered;
- The charges were paid up to the full amount of the settlement you received; or
- The hospital is a party to the release.
As a practical matter, this means the at-fault driver’s insurer will usually insist that a filed hospital lien be resolved, or that the hospital be named on the settlement check, before it pays. Ignoring the lien can delay your money or expose the insurer to the hospital’s claim, which insurers work hard to avoid.
Other liens and reimbursement claims in a Texas injury case
A Chapter 55 hospital lien is only one of the claims that may need to be paid from a settlement. Others follow different rules:
- Medicare. If Medicare paid for your injury-related care, federal law gives it a right to be repaid from your settlement (42 U.S.C. § 1395y(b)(2)). Medicare’s claim is not limited by the Texas hospital lien statute.
- Medicaid, health insurance and employer plans. Government programs have reimbursement rights under their own laws, and many health plans include reimbursement or subrogation terms. Whether and how much a plan can recover often depends on the plan documents and the type of plan.
- Doctors and clinics treating under a “letter of protection.” Some providers agree to wait for payment until the case resolves. Those are contract claims, not Chapter 55 hospital liens.
Billing rules that can help you
Texas law also protects patients when providers don’t bill insurance on time. If a provider is required or authorized to bill your health plan and fails to do so by the deadline in Tex. Civ. Prac. & Rem. Code § 146.002 (generally the first day of the 11th month after services, unless a contract sets a different date), the provider may not recover from you the amount your plan would have paid (Tex. Civ. Prac. & Rem. Code § 146.003). The hospital lien statute specifically excludes charges barred by § 146.003 (Tex. Prop. Code § 55.004(d)).
Separately, Texas limits recovery of medical expenses in an injury case to the amount “actually paid or incurred” by you or on your behalf (Tex. Civ. Prac. & Rem. Code § 41.0105). That rule affects how medical bills are valued in your claim, and it is one more reason it pays to understand which bills are truly owed before you settle.
Why hospital liens matter to the money you keep
Two settlements of the same size can put very different amounts in an injured person’s pocket depending on how liens are handled: whether each lien was filed correctly, whether the charges meet the “reasonable and regular rate” limit, whether health insurance should have been billed, and whether the 50% cap applies.
Hospital liens arise in many kinds of cases, including car accidents, slip and fall injuries and wrongful death claims, where the lien can attach to a claim brought by the people entitled to sue after a death (Tex. Prop. Code § 55.003(a)). For a broader overview of how Texas injury claims work, see our Texas injury law guide.
Don’t let the filing deadline slip while you sort out the bills
Medical bills and liens can take months to sort out, but the deadline to sue does not wait. In most Texas personal injury cases, you must file suit within two years after the claim accrues, and in wrongful death cases within two years of the date of death (Tex. Civ. Prac. & Rem. Code § 16.003). Some claims, such as claims against government entities, have shorter notice requirements.
If you have a hospital lien on your case, or you’re worried about how your medical bills will be paid out of a settlement, talk to a lawyer before you sign anything. Borunda & Fomby PLLC is based in Houston and represents injured people throughout Texas. Consultations are free, and you pay no fee unless we win. Call (713) 930-4878 (24/7) or contact us online. Se habla español.
This article is general information about Texas law, not legal advice, and reading it does not create an attorney-client relationship. Every case is different.