June 1 is the last day of the 81st regular Texas Congress session. Here’s a look at a few bills that affect the world of automobile accident cases.
SB747 – would require hospitals to send notices to patient before filing any lien. The bill was voted out of committee and passed by the Senate. It was referred to the House and voted out of committee on May 5.
Before settling cases, we do a computer check of any outstanding liens that may attach to the settlement. We do periodic checks to see if hospitals have filed liens, but since hospitals sometimes wait several months before filing, we sometimes get to within days of settlement before we find out that a lien was filed. This bill requires the hospital to alert the patient before filing a lien. This would help attorneys by reducing the number of ‘surprise’ liens that we don’t know about until we are close to settlement.
HB4251, which would require a hospital to go after health insurance before filing a lien against a patient, is still languishing in committee.
One of the more annoying issues we face is hospitals who refuse to file on a client’s health insurance after finding out that they were involved in an automobile accident. As the law stands, they can refuse to file on health insurance (requiring them to accept a reduced payment) or they can file a lien on the file hoping to receive full payment upon settlement. Obviously we want insurance to reduce and pay the bills to make settlement easier and get larger amounts of money for our clients.
HB4095 Eiland – would codify the made whole doctrine and common fund doctrine regarding subrogation on insured’s recovery from a third party. This bill is in response to the Texas Supreme Court in Fortis v. Cantu. The bill was altered in committee, voted out of committee, and a report was sent to calendars on May 5. Full text available here
I’m hesitant to support any bill that guarantees health insurers’ subrogation interests, but this one has a few interesting subsections.
(b) The health benefit plan issuer may not pursue a right of subrogation against a covered individual’s first party coverage.
The restriction that subrogation attaching only to third-party claims would be a huge win for plaintiffs. Since you are the one paying for the Uninsured Motorist(UM)/Underinsured Motorist(UIM) coverage, it has always seemed unfair that health insurance can come in and take your settlement.
I just settled a case with a $20,000 third-party limits claim and a $100,000 UIM limits claim where reducing the amount of the $45,000+ subrogation lien was nearly impossible because of the UIM. If this bill had been in effect, only the 3rd party claim would be subrogatable, netting my client an extra $25,000 or more.