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How to Restrict Medical Providers from Wrongfully Taking Personal Injury Awards

Personal injury damages are supposed to compensate injured victims for losses that arise from another person’s wrongful or negligent behavior. Compensatory damages cover economic losses such as medical bills, as well as noneconomic losses such as pain and suffering.

However, hospitals might try to directly go after personal injury damages or settlements by filing a hospital’s lien. Why? Because insurance companies who have a contract with the hospital tend to negotiate discounted rates for health care services.

Thus, hospitals think that if they can go after an injured victim’s personal injury settlement or damages award, they can get more money than if they bill the victim’s insurance carrier. As a result, injured victims who successfully prosecute a personal injury claim can end up paying more than they would have if they did not seek legal recompense for their injuries and just let their health insurance pay for their bills.

However, Texas law prevents hospitals and other health care service providers from taking advantage of the civil justice system in this way. This blog talks about Texas Civil Practice & Remedies Code Chapter 146 and how it can be used to keep hospitals in their place when it comes to personal injury damages claims.

Civil Practice & Remedies Code Chapter 146

Chapter 146 of the Texas Civil Practice & Remedies Code (CPRC) bars certain claims by health care service providers. This law grants protection to individuals who receive a personal injury settlement or jury award by requiring health care service providers first to bill the injured party’s insurance.

Under CPRC § 146.001 most insurance policies or arrangements are protected under Chapter 146, including:

  • Health insurance policies;
  • Coverage issued by a health maintenance organization (HMO) or approved nonprofit health corporation;
  • Employee benefit plans;
  • Workers’ compensation insurance; and
  • Personal injury protection (PIP) or medical payments (Med Pay) coverages provided by a car insurance policy.

Furthermore, CPRC Chapter 146 defines “health care service providers” to include “a person who, under a license or other grant of authority issued by this state, provides health care services the costs of which may be paid for or reimbursed under a health benefit plan.” Accordingly, virtually all health care providers who accept insurance fall within the scope of CPRC Chapter 146.

The Timely Billing Requirement

Under CPRC § 146.002, health care service provider “shall bill a patient or other responsible person for services provided to the patient not late than the first day of the 11th month after the date the services are provided.”

Depending on the contract between the health insurance company and the health care provider, the date to make a claim may be shorter 11 months. The same time limits apply for hospitals that are contracted to bill Medicare and Medicaid.

Claims Barred Where Insurance Not Billed Timely

Under CPRC § 146.003, any health care service provider that fails to timely bill the injured party’s applicable insurance provider per the requirements of CPRC § 146.002 above “may not recover from the patient any amount that the patient would have been entitled to receive as payment or reimbursement under a health benefit plan or that the patient would not otherwise have been obligated to pay had the provide complied [with the timely billing requirement.]” Furthermore, health care service providers are also barred from making claims against anyone else who would be responsible for the injured party’s bills.

For example, imagine that you were injured in an automobile accident and were treated at the hypothetical “Regional Hospital.” In this scenario, you work for a local school district that provides health insurance benefits under an “ABC Insurance Co.” plan.

While at the hospital, you undergo services for diagnostics and treatment. Weeks later, you receive a bill from Regional Hospital for $85,000. Regional Hospital thereafter files a hospital lien for the full $85K and sends it to the automobile insurance adjuster and your attorney, but does not bill ABC Insurance.

The following year you settle with the at-fault driver for $30,000. Can Regional Hospital claim the $30,000 settlement?

Under CPRC Chapter 146, Regional Hospital was supposed to bill ABC Insurance within the first day of the 11th month after you were treated at the hospital. As a result, a court would find that the hospital is only entitled to receive what you were supposed to pay for – in this case, say a $500 deductible for emergency room services. As a result, you save $29,500 of the $30,000 settlement.

To learn more about how CPRC Chapter 146 can work to protect your personal injury award, read the article Texas Civil Practice and Remedies Code Chapter 146: Defeating Hospital Liens and Charges When the Injured Party Has Health Insurance, Medicare, Medicaid, or TRICARE written by our very own attorney, and named partner, Mr. Clark Harmonson. Mr. Harmonson’s article goes in depth into how CPRC 146 works in Medicare, Medicaid, and TRICARE situations.

Consult an Experienced El Paso Personal Injury Lawyer for Quality Advice

If you’ve been injured by another person’s wrongful or negligent conduct, you may be entitled to a legal remedy. To determine the full extent of such a remedy, you should consult an experienced El Paso personal injury lawyer for professional legal advice. At the Harmonson Law Firm, we proudly represent El Paso residents in personal injury cases to make sure they receive a just and proper remedy for injuries they suffered at the hands of another person. We offer professional legal advice and advocacy with a personal touch, focusing on the particular facts of your case and your individualized needs.

Call the Harmonson Law Firm at (915) 228-4140 or contact us online today for a free consultation to explore your legal rights and options.