What is a Fraudulent Hospital Lien?

March 6, 2018

Hospitals in the state of Texas have the ability to file a lien against their patients in order to receive compensation. Unfortunately, hospitals in Texas have been overcharging and illegally filing liens, which have put thousands of Texans into serious financial trouble and led to collection letters or phone calls, lower credit scores, and even bankruptcy. These fraudulent hospital liens are what are known in Texas as the Hospital Lien Scam, and it is crucial that patients know the difference between legitimate and fraudulent uses of these liens.

In 1933, the Texas Legislature passed a law which allowed hospitals to seek compensation from the insurance of the person at fault if you were injured by a third party and admitted to a hospital within 72 hours. The key distinction in this case is “admitted to a hospital,” which means that a hospital lien cannot be filed unless you were admitted by a doctor as an inpatient of the hospital.

In almost every case, a fraudulent hospital lien is filed against those who received care in an emergency room, which is not inpatient care and does not constitute being admitted to the hospital. Virtually every fraudulent hospital lien scam begins with a visit to the emergency room whether for a car accident, illness, or heart attack.

In many instances there have been cases of “over-examination,” “over-treatment,” and even tests or examinations that have nothing to do with the injury at hand. This causes the hospital bill to reach exorbitant totals, which help the hospital make more money and report favorably to shareholders.

The patient is subsequently discharged from the emergency room without being admitted to the hospital, and the hospital will almost immediately file a lien against you at the county clerk’s office which entails them to first rights of any proceeds that may be recovered from a lawsuit against a third party, which is why some may engage in over-treatment or needless tests, in order to recover a bigger share of any compensation.

Hospitals cannot file a valid lien if they are charging excessive or unreasonable rates, which is determined by looking at what other hospitals charge within the same geographical area. Nor can they charge more to some types of patients based on their accident. For example, charging more to a patient with a broken arm from a car wreck compared to someone who suffered a broken arm in another instance where the hospital lien scam may not apply.

The hospital lien law was designed to help protect hospitals from nonpayment and to reduce medical costs, not as a means for them to increase profits while praying on the injured and vulnerable. Unfortunately, this law has been abused by hospitals, emergency medical clinics, and doctors for many years. When the hospital knows you have a personal injury lawsuit on your hands, they may charge five to ten times more than the service is worth in the hopes that you receive a large settlement and they receive a larger share of the pie. Of course, this is not fair, and their rates should never exceed the standard amount. All too often, victims of personal injuries end up being victimized all over again by hospitals taking advantage of this situation.

Texas does have a fraudulent lien filing act which penalizes those who file fraudulent liens, and targets the individual who does so as committing a crime.

If you were treated in an emergency room, billed excessive charges, and the hospital filed a lien against you and any subsequent legal claim, then the lien may be fraudulent, and you should speak with an experienced Texas medical malpractice attorney like those at Fears Nachawati.

For your free, no obligation legal consultation, please call the medical malpractice lawyers of Fears Nachawati at (866) 705-7584 or visit one of the offices located throughout the great state of Texas, including in Houston, Dallas, Austin, Fort Worth, and San Antonio.

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