A medical lien is a legal claim that runs in favor of a healthcare provider. Suppose, for example, that a hospital treats you for injuries you suffered in a truck accident. Suppose that you cannot pay your medical bills as they come due. Further suppose that there is reason to believe that the accident was the truck driver’s fault, not yours.
Your medical lien will attach to something that doesn’t exist yet—any personal injury settlement or court judgment that arises to compensate you for the accident. That’s not necessarily anything you need to worry about, however, for the following reasons:
- It reassures your healthcare provider that you will eventually pay your medical bills, even if you cannot afford to pay them right now. It’s no ironclad guarantee, since you might lose your case, but it does add credibility to your assurances that you will pay, and they will help you obtain better medical care.
- Your lawyer can issue your health care a letter of protection, which will further reassure your healthcare provider of eventual payment.
- Texas law places limits on how much money a health care provider can seize through the use of medical liens.
- If you win your claim against the defendant (probably a trucker’s insurance company), you will probably win more than just reimbursement for your medical bills. You will probably receive compensation for lost wages, pain and suffering, and other forms of intangible damages such as emotional distress.
In most cases, your medical lien attaches to your future compensation automatically. Your healthcare provider might have to file documentation to perfect the lien (to assure its priority over certain other creditors), but the lien itself usually attaches automatically. Because of its complexity, it is crucial that you involve a lawyer in this process as soon as possible.
There are certain circumstances, however, in which your health care provider must file documentation to create your lien in the first place. Talk to your lawyer about this if you have any questions. Remember, medical lien law is different in every state.
Your Healthcare Provider MUST Render Emergency Treatment With or Without a Medical Lien
If you are seriously injured, and you don’t have money to pay your medical bills, you might worry that the hospital might refuse to treat you because you lack the money to pay. Is that something you need to worry about? No. No matter how stingy the hospital may be, federal law requires them to provide you with emergency treatment whether or not you can afford to pay.
This law is called the Emergency Medical Treatment and Labor Act (EMTALA). It does NOT apply to non-emergency treatment. Health care providers can freely deny you non-emergency medical treatment if you cannot afford to pay.
Please don’t misunderstand. EMTALA doesn’t mean that you receive free treatment as long as it’s an emergency. It just means they must treat you and deal with payment issues later. The hospital might very well pursue you very aggressively for payment, even to the point of driving you into bankruptcy. They will be happy to add emergency treatment expenses to your medical lien. But they won’t let you die on the operating table for lack of funds.
Priority of Liens/Fees
A medical lien is not the only debt that will come due when you receive your personal injury judgment or settlement, You will also have to pay attorney’s fees (typically 30% to 40% of your total compensation), as well as case expenses. Case expenses can add up to a little (copying expenses) or a lot (expert witness fees).
Regardless, under Texas law, both your attorney’s fees and your case expenses take priority over your medical lien. If these are your only three liens, then the order of payment will be (1) attorney’s fees (2) case expenses (3) medical liens and (4) your compensation. It’s always possible, however, that another lien may take precedence—a lien for unpaid child support, for example.
Negotiation and Payment
It’s important that you realize that you are entitled to negotiate the amount of your medical lien. That means you might have to negotiate two sums—(1) your overall personal injury settlement and (2) the amount of your medical lien. Your best bet is usually to negotiate the amount of your medical lien first, so that it doesn’t eat up the money that would otherwise go in your pocket–as compensation for pain and suffering, for example.
Once you have negotiated the amount of your medical lien, negotiate the amount of your overall personal injury settlement. Your lawyer can help you with both of these negotiations. It works like this:
- The better the lawyer you hire, the more favorable evidence you are likely to be able to assemble.
- The better your evidence, the stronger your personal injury claim is likely to be.
- The stronger your claim, the higher the value of your personal injury settlement.
- The higher the value of your personal injury settlement, the more compensation you’ll be able to put into your pocket once you deduct case expenses and your medical lien.
As should be obvious from the foregoing discussion, so much depends on the quality of your lawyer.
Medical Liens on Personal Assets
Suppose that your medical bills are so high, and your personal injury settlement is so low, that you have to spend all of your personal injury settlement and you still end up with medical bills to pay. Your healthcare provider might seek a lien against your current property. Bill collectors are likely to threaten to do exactly that if you get into this situation. Nevertheless, it isn’t as easy as simply deducting the amount of a medical lien from your personal injury settlement.
Here’s what your health care provider would generally do to get hold of your personal assets to satisfy a medical debt:
- They would probably first use the standard collection process to collect your debt. That means sending you bills and perhaps sending your debt to a collection agency.
- If that didn’t work, they would file a lawsuit against you.
- If they won the lawsuit and you still refused to pay, they’ll have to go back to court to enforce payment. They would probably ask the court to freeze your bank account and/or garnish your wages. This is a very real possibility.
Seizing your home is an entirely different story, however. Texas law applies one of the nation’s most generous homestead exemptions. It prevents your creditors, even your medical creditors, for seizing your real property up to the amount of:
- 200 acres in a rural area for a family, or 100 acres for a single person, and
- Up to 10 acres of land in an urban area.
There is no dollar limit—it’s all based on acreage. There are some exceptions, such as IRS liens, that might put your home in danger.
A Fort Worth Personal Injury Lawyer Can Protect Your Interests
Do yourself a favor and hire a Fort Worth personal injury lawyer right from the very beginning. Choose someone who has handled Texas medical liens before and who knows how to negotiate them. You will need this precaution to prevent your healthcare provider from “taking you to the cleaners.” The best part is that under the contingency fee arrangement that almost all personal injury lawyers use, you pay nothing in attorney’s fees unless you win your case.
