Settlement

Short answer: In Texas, a hospital that treats you within 72 hours of an accident caused by someone else's negligence can place a lien on your injury claim. That lien is capped at the lesser of the hospital's charges for the first 100 days of care or 50% of your recovery. Health insurers, Medicare, and some government plans may also have a right to be repaid from your settlement. The amount you ultimately keep depends heavily on how those claims are identified, challenged, and negotiated before the case closes.

Most people injured in a Dallas-Fort Worth car wreck, truck crash, or fall focus on one number: the settlement offer. But the settlement number and the amount that actually reaches you are rarely the same. Between the two sits a layer of liens and reimbursement claims that many injured people never hear about until they are asked to sign a release.

At Howard Lotspeich Alexander & Williams, PLLC (HLAW), lien resolution is part of every personal injury case we handle, and it is often where a meaningful part of a client's net recovery is won or lost. This guide explains how the system works in Texas and what you can do about it.

Key Takeaways

• Texas hospital liens arise under Chapter 55 of the Texas Property Code. They attach to your claim, judgment, or settlement, not to your home or other property.
• The 72-hour rule matters. A hospital lien attaches only if you were admitted within 72 hours of the accident, and Texas law treats being allowed into any department of the hospital, including the emergency room, as an admission.
• There is a 50% cap. A hospital lien cannot exceed half of what you recover, and it does not cover charges above a "reasonable and regular rate."
• Your recoverable medical damages are limited to what was actually paid or owed. Under Texas's "paid or incurred" rule, the inflated sticker price on a hospital bill is generally not what a jury will see.
• Health insurers usually have to share attorney's fees and are capped as well. Texas Chapter 140 limits many health plans' reimbursement claims, though self-funded employer plans and Medicare follow different rules.
• An unresolved lien can delay or invalidate a settlement. A release signed without satisfying a properly filed hospital lien is not valid against the hospital.

What Is a Hospital Lien in Texas?

A hospital lien is a legal claim a hospital holds against the money you recover from the person or company that caused your injury. Under Texas Property Code § 55.002, a hospital has a lien on the cause of action or claim of a person who receives hospital services for injuries caused by an accident attributed to another person's negligence.

According to Section 55.003, the lien attaches to three things:

1. Your cause of action for damages arising from the injury,
2. Any judgment you obtain in court, and
3. The proceeds of any settlement.

Importantly, the hospital lien statute requires the hospital's notice to tell you that the lien does not attach to real property you own. In other words, a Chapter 55 lien follows the injury claim, not your house.

The 72-Hour Requirement

For a hospital lien to attach, you must have been admitted to the hospital no later than 72 hours after the accident, as stated in Section 55.002(a). Many people assume that a trip to the emergency room without an overnight stay is not an "admission." Texas law says otherwise. Since 2019, Section 55.0015 has provided that a person is considered admitted if they are allowed access to any department of the hospital for treatment, care, or service.

Practically, that means if you were taken to an emergency room in Fort Worth, Arlington, Dallas, or anywhere else in Texas within three days of a wreck, you should assume a lien may exist.

The lien also extends to a second hospital if you were transferred for treatment of the same injury, under Section 55.002(b).

How Much Can a Texas Hospital Lien Be?

This is where the statute offers real protection. Under Section 55.004(b), a hospital lien is limited to the lesser of:

1. The hospital's charges for services during the first 100 days of your hospitalization;
2. 50% of all amounts you recover through a lawsuit, judgment, or settlement; or
3. If a jury specifies the amount awarded for hospital charges, that amount minus a pro rata share of your reasonable attorney's fees and expenses.

The lien also may not include charges that exceed a reasonable and regular rate for the services, according to Section 55.004(d). That language is a frequent starting point for negotiating hospital balances that are far above what the same hospital accepts from insurers.

The lien may also include certain emergency physician charges from the first seven days of hospitalization, but not physician charges that were already paid through insurance or that the physician is entitled to collect from your health plan under an assignment of benefits, per Section 55.004(c)–(d).

What About the Ambulance?

Texas also allows emergency medical services (EMS) providers to claim a lien, but only for EMS provided in a county with a population of 800,000 or less, and the lien is capped at $1,000, as provided by Sections 55.002(c) and 55.004(f).

This has a distinctly local effect in North Texas. Tarrant, Dallas, Collin, and Denton counties each had more than 900,000 residents at the 2020 Census, according to North Central Texas Council of Governments population data. Smaller surrounding counties such as Johnson, Parker, Wise, and Hood are well under that threshold. So whether an ambulance company can assert a lien may depend on which side of a county line the wreck happened.

How a Hospital Secures (and Loses) Its Lien

A hospital does not automatically hold an enforceable lien just because it treated you. Under Section 55.005, the hospital must:

• File a written notice of lien with the county clerk in the county where services were provided, before money is paid to the injured person; and
• Mail notice to the injured person (or their representative) within five business days after the clerk records it.

The notice must identify the injured person, the date of the accident, the hospital, and the person alleged to be liable, if known.

Once a lien is properly secured, it has teeth. Under Section 55.007, a release of your claim is not valid against the hospital unless the hospital's charges were paid (in full, or to the extent of the consideration paid), or the hospital is a party to the release. This is why liability insurers routinely run county lien searches and add hospitals as co-payees on settlement checks.

For an injured person, this has two consequences:

• You cannot simply ignore a lien and expect the insurance company to pay you directly.
• Your lawyer needs to identify liens early, by checking county records in places like Tarrant, Dallas, and Denton counties, so they can be challenged and negotiated before the settlement is finalized, rather than discovered at the last minute.

The "Paid or Incurred" Rule: Why Sticker Prices Don't Control

Texas hospitals often bill at full "chargemaster" rates that few patients or insurers actually pay. Texas law limits what you can recover for past medical expenses to the amount actually paid or incurred.

Texas Civil Practice and Remedies Code § 41.0105 provides that recovery of medical or health care expenses "is limited to the amount actually paid or incurred by or on behalf of the claimant." In Haygood v. De Escabedo, the Texas Supreme Court held that this statute limits both recovery and the evidence presented at trial to expenses that the provider has a legal right to be paid. In that case, roughly $110,000 in billed charges was reduced to about $27,700 after required Medicare adjustments, as summarized by Chamberlain Hrdlicka.

Why does this matter for liens? Because the same gap between "billed" and "owed" that limits what a defendant must pay also gives an experienced attorney leverage to negotiate down hospital balances and reimbursement claims.

A note on 2025 legislation: In 2025, the Texas Legislature considered Senate Bill 30, which would have further changed how medical expenses are proven in injury cases. The bill ended in conference and did not become law, according to Phelps Dunbar, which notes it could return when the Legislature convenes on January 12, 2027. We will continue to monitor any changes.

When Your Health Insurer Wants to Be Repaid

If your own health insurance paid your medical bills after the wreck, your policy very likely contains a subrogation or reimbursement clause. That clause lets the insurer seek repayment from your injury settlement.

For many Texas-regulated health plans, Chapter 140 of the Texas Civil Practice and Remedies Code caps that recovery. When you are represented by an attorney, the payor's share is the lesser of:

• One-half of your gross recovery, less attorney's fees and procurement costs; or
• The total benefits the plan paid as a result of the injury, less attorney's fees and procurement costs.

Chapter 140 also states that the common-law "made whole" doctrine does not apply to these payors, according to Section 140.005(d). The statute applies to insurance companies, HMOs, and certain public employee plans listed in Section 140.002.

The important exception: Self-funded employer health plans governed by the federal ERISA statute are often not bound by state anti-subrogation rules like Chapter 140. The U.S. Supreme Court's decision in FMC Corp. v. Holliday is the foundation for that rule. These plans are governed by the specific language in the plan documents, which is why requesting and reviewing the actual plan document is a critical step in any case involving employer-provided coverage.

Medicare and Other Government Payors

If you are a Medicare beneficiary, federal law treats Medicare as a "secondary payer" when liability insurance is responsible for an injury. According to CMS, Medicare can make "conditional payments" for accident-related care, but those payments must be repaid when you receive a settlement, judgment, or award.

CMS guidance on the recovery process explains that a pending liability case must be reported to the Benefits Coordination & Recovery Center (BCRC), and that the settlement date, amount, and attorney's fees and procurement costs must be reported when the case resolves. Medicare's final demand accounts for a proportionate share of those procurement costs, as described in the Medicare Secondary Payer Manual.

Medicare claims are not something to handle casually. Federal law gives the government strong collection rights, so these claims should be resolved through the proper process, with related-versus-unrelated charges carefully reviewed before the final demand is paid. Medicaid, VA, TRICARE, and workers' compensation carriers each have their own separate recovery rules.

A Simple Example

Imagine a Fort Worth driver is rear-ended on I-35W, taken to an emergency room, and later treated with physical therapy. The case settles for $100,000.

• The hospital files a lien for $40,000 in charges.
• The driver's health plan paid $15,000 toward therapy and imaging.

Without careful lien work, the driver might assume that roughly $55,000 of the settlement is gone before fees and costs. In practice, the hospital lien is limited to its reasonable and regular rate (and can never exceed $50,000, which is 50% of the recovery), and a Chapter 140-governed health plan must reduce its claim by its share of attorney's fees. Negotiation of each balance can further reduce the amounts owed.

Every case is different, and the actual numbers depend on the type of plan, the bills, and the facts, but the example shows why lien resolution is not a clerical afterthought. It directly determines how much of your settlement you keep.

What You Should Do After a DFW Accident

1. Keep every bill, explanation of benefits (EOB), and letter you receive from hospitals, ambulance companies, and insurers.
2. Do not ignore a lien notice in the mail. It is often the first sign that a hospital has recorded a lien with the county clerk.
3. Give your providers your health insurance information. Hospitals sometimes prefer to file a lien for full charges instead of billing your insurer at negotiated rates. Insisting that your insurance be billed can significantly reduce what is owed.
4. Tell your attorney if you have Medicare, Medicaid, or an employer health plan, and find out whether your employer plan is fully insured or self-funded.
5. Do not sign a release or accept a check until every lien and reimbursement claim has been identified and addressed.
6. Talk to an injury lawyer who handles liens directly, rather than a high-volume firm that hands lien work to a settlement processor. (Learn more about why that difference matters.)

Frequently Asked Questions

Can a Texas hospital put a lien on my house after a car wreck?

No. A Chapter 55 hospital lien attaches to your injury claim, judgment, or settlement. The statute requires the hospital to tell you that the lien does not attach to real property you own, as stated in Texas Property Code § 55.005(d).

Does a hospital lien apply if I only went to the emergency room?

Usually yes. Texas treats access to any department of the hospital, including the ER, as an admission under Section 55.0015, as long as it occurred within 72 hours of the accident.

Can a hospital lien take my entire settlement?

No. A hospital lien under Chapter 55 cannot exceed 50% of the amounts you recover, and it is limited to the lesser of that cap, the first 100 days of charges, or a jury-specified amount reduced by attorney's fees, under Section 55.004(b).

Does a hospital lien attach to my own insurance coverage?

Generally, a Chapter 55 lien does not attach to proceeds of an insurance policy in favor of the injured person, except liability insurance that protects against loss from an accident or collision, according to Section 55.003(b). How this applies to a particular PIP or uninsured/underinsured motorist claim should be reviewed by your attorney. (See our guide to UM/UIM and PIP coverage in Texas.)

Does my health insurance company get paid back out of my settlement?

Often yes, if your policy has a reimbursement clause. For many Texas-regulated plans, Chapter 140 limits the insurer to the lesser of half your recovery or the benefits it paid, each reduced by attorney's fees and costs. Self-funded ERISA plans may follow different rules.

Will lien negotiations delay my settlement?

They can add time, but resolving them correctly protects you. A release given without satisfying a properly secured hospital lien is not valid against that hospital under Section 55.007, which is why insurers insist that liens be addressed before they pay.

Talk to a Fort Worth Personal Injury Attorney

At HLAW, a partner personally handles your case from the first call through the final disbursement, including the lien and reimbursement negotiations that determine how much of your settlement you actually keep. We represent injured people across Fort Worth, Keller, Southlake, Grapevine, Arlington, Dallas, and the greater Dallas-Fort Worth area in car wreck, truck accident, wrongful death, and other personal injury cases.

If you've been hurt and are worried about medical bills or hospital liens, contact Howard Lotspeich Alexander & Williams, PLLC or call (817) 993-9249 for a free consultation.

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This article is for general informational purposes only and is not legal advice. Reading it does not create an attorney-client relationship. Lien and reimbursement rules depend on the specific facts, plan documents, and current law; consult an attorney about your situation.

When you book a massage, you’re placing tremendous trust in a licensed professional. If that trust is violated through any form of sexual contact or exploitation, you’re not only dealing with trauma—you’re suddenly navigating medical, legal, and financial decisions you never asked for. This guide explains what Texas law says, who may be held civilly liable, deadlines that apply, and how a civil case works, so you can make informed choices about healing and accountability.

First Things First: Texas Law Prohibits Sexual Contact in Massage Settings

Texas strictly bans sexual contact in massage establishments. State rules make it unlawful for an establishment to allow any person—including a therapist or client—to engage in sexual contact on the premises, and they bar nudity and other sexualized conditions during services. These rules sit on top of the criminal laws against sexual assault. 

Massage therapists in Texas are licensed under Occupations Code Chapter 455, and the Texas Department of Licensing & Regulation (TDLR) enforces these rules and can sanction or shut down violators. You can also file an administrative complaint with TDLR (this is separate from a civil lawsuit). 

What Counts as Sexual Assault in This Context?

Under the Texas Penal Code §22.011, sexual assault includes penetration or certain sexual contact without consent, and the law recognizes power-imbalance scenarios (e.g., certain health or mental-health provider dynamics) as “without consent.” While a massage therapist is not automatically treated as a “health care services provider,” many cases still qualify as sexual assault because consent is absent, coerced, or otherwise invalid. 

Importantly, Texas massage rules also require specific, written consent before any breast massage of a female client—anything else is outside the rules. Violations of these professional standards can support your civil case. 

Who Can You Sue?

Depending on the facts, you may have civil claims against:

• The individual massage therapist (intentional torts such as sexual assault/battery; intentional infliction of emotional distress).
• The spa or massage establishment for:
  • Negligent hiring/retention/supervision (e.g., ignoring red flags, failing to run proper checks, poor oversight or policies).
  • Failure to follow state rules and industry standards (policies about draping, privacy, chaperoning, consent, complaint handling).
  • Vicarious liability (respondeat superior) in rare scenarios where the business can be legally tied to the employee’s conduct. (Often sexual assault is considered outside the scope of employment, so negligent hiring/retention is usually the stronger path.)

Texas administrative rules make clear that establishments must prevent sexual contact, nudity, and other red-flag conditions; documentation and compliance lapses at the spa level often become critical evidence. 

What Are the Deadlines (Statutes of Limitations)?

Texas extends the time to sue for injuries arising from sexual assault:

• Adults: generally 5 years from the date the claim accrues for personal injury arising from sexual assault or aggravated sexual assault.
• Child victims: up to 30 years after the 18th birthday in many child-sex-abuse scenarios listed in the statute. There’s also a special “John/Jane Doe” provision allowing you to file while the perpetrator’s identity is unknown, if you proceed diligently. These timeframes come from Texas Civil Practice & Remedies Code §16.0045. 

Bottom line: Do not delay. Evidence disappears and deadlines are unforgiving, even with these extensions.

What Compensation Can a Texas Civil Lawsuit Seek?

Depending on your case, you may seek:

• Medical and counseling costs (past and future)
• Lost wages or career impacts
• Pain, mental anguish, PTSD-related harms
• Exemplary (punitive) damages for intentional misconduct

Texas caps punitive damages in many cases, but the cap does not apply when the defendant’s conduct constitutes certain intentional felonies—including sexual assault—committed knowingly or intentionally. That exception appears in CPRC §41.008(c). (A criminal conviction isn’t required to pursue the civil exception; the civil jury looks at the conduct and mental state.) 

Will a Civil Case Affect the Therapist’s License?

A civil lawsuit is separate from licensing and criminal processes, but they often run in parallel. TDLR can investigate, fine, suspend, or revoke a license, and it has authority to shut down establishments in certain circumstances. Filing a TDLR complaint can help protect others and may uncover records useful to your civil case. 

How These Cases Typically Proceed

1. Confidential consultation & safety plan. We prioritize safety and discuss whether to report to police/TDLR. (You decide; we support you.)
2. Evidence preservation. Save texts, DMs, appointment records, intake forms, waivers, receipts, and any messages from the spa. We’ll send preservation letters to the business to lock down video, logs, and internal reports.
3. Administrative and criminal reporting (optional but encouraged). You can report to law enforcement and TDLR; both tracks can run with a civil claim. 
4. Investigation. We obtain policies, staff rosters, prior complaints, staffing/background checks, training records, and compliance audits; we compare them to Texas rules for establishments. 
5. Filing the civil suit. We typically allege intentional torts against the therapist and negligent hiring/retention/supervision against the business, with damages including mental-health care and, where supported, exemplary damages. 
6. Privacy protections. We can seek protective orders and other measures to limit unnecessary disclosure of sensitive information during discovery.

Common Defenses—and How We Respond

• “It was consensual.” We rebut with the power dynamics, rule violations (e.g., draping/consent failures), and contemporaneous evidence (texts, timing, abrupt changes in behavior).
• “Independent contractor—not our employee.” Establishments still have non-delegable duties and can face negligent hiring/retention or premises/operations liability when they ignore obvious risks. Texas rules impose duties on establishments regardless of payroll labels. 
• “No notice of prior problems.” We dig for prior complaints, staffing shortcuts, policy gaps, and surveillance or sign-in inconsistencies that show unreasonable risk.

What If I Signed an Intake Form or Arbitration Clause?

Intake forms, “consents,” or arbitration provisions don’t excuse sexual assault. Some clauses are unenforceable as written, and others have carve-outs. We review every document and challenge unfair provisions where appropriate.

Practical Steps if This Happened to You

• Get medical and trauma-informed care. Your health comes first.
• Write down everything you remember—times, words used, room layout, where the therapist stood, how you were draped, etc.
• Save all communications with the spa/therapist.
• Consider reporting to police and file a TDLR complaint (we can help draft it). 
• Consult a civil attorney experienced in assault cases to preserve your claim and evidence right away. Do this as soon as possible!

Our Role

We approach these cases with compassion, confidentiality, and urgency. We handle the legal strategy while coordinating with your care providers and, if you choose, with TDLR and law enforcement. If you or someone you love was assaulted in a massage setting anywhere in Texas, reach out for a confidential consult—we’ll walk you through options and next steps.

Key Texas References

• Statute of limitations for sexual assault civil claims (5 years for adult sexual assault; longer windows for child victims; special Doe pleading): CPRC §16.0045.
• Punitive damages cap exception for intentional/knowing sexual assault and aggravated sexual assault: CPRC §41.008(c).
• Massage establishment rules prohibiting sexual contact, nudity, and requiring compliance/records: 16 TAC §117.82 and related TDLR enforcement guidance.
• Written consent for breast massage (female client): 16 TAC §117.91.
• Texas Penal Code §22.011 (sexual assault definitions and non-consent circumstances).

What is the Stowers Doctrine and How Does it Apply to a Personal Injury Case in Texas?

Under the typical Texas liability insurance policy both the insurer and the insured have mutual obligations and rights. The insured pays a premium to their insurance company to protect against unexpected losses and claims. On the other hand, the insurance company has a duty to defend against claims covered under the policy and a right to control the defense of litigation should it arise.¹ Included in the right to control litigation is the insurer’s authority to make the decisions concerning policy coverage, the merits of claims made by third parties against the insurance company, and the settlement of such claims.² But what happens when an insurance company refuses an offer to settle within the policy limits?

According to the Stowers Doctrine, the insurer has an implied duty to act in good faith and accept reasonable settlement demands within policy limits.³ This is called the Stowers duty. Through this duty the insurer protects the insured against judgements in excess of policy limits. Under the Stowers Doctrine, if an insurance company negligently failed to accept a reasonable offer within policy limits and a jury then returns a verdict in excess of the policy limits, the insurance company may be liable for the entire verdict, even though it exceeds policy limits.⁴

History of the Stowers Doctrine

The Stowers Doctrine originated in 1929 from the Texas Supreme Court case G.A. Stowers Furniture Co. v. American Indemnity, Co., 15 S.W.2d 544 (Tex.). Stowers Furniture Co. had an auto insurance policy with American Indemnity for $5,000. During the policy term, a furniture employee’s truck was involved in an accident and suit was brought by the injured passenger, claiming $20,000 in damages. While the suit was pending, the injured party served Stowers with a letter offering to settle for $4,000—within policy limits. The letter gave a deadline to accept the offer and provided proof of the excessive damages. American Indemnity refused to settle and went to trial with the intention of saving money. They lost at trial and a jury awarded the injured party more than twice the amount of the policy. The terms of the insurance policy stated that Stowers was responsible for a judgment in excess of the policy limits. Stowers paid the judgement and then sued the insurance company for reimbursement.

The Texas Supreme Court held that American Indemnity owed a duty to Stowers to exercise ordinary care in the settlement of claims. American Indemnity was responsible for protecting the insured up to the policy limit. The Court remanded the case to the district court to allow testimony of the serious nature of the passenger’s injuries to determine if American Indemnity was negligent in refusing the settlement offer.⁵ If American Indemnity rejected a reasonable settlement within the policy limits, they would potentially be liable for the entire judgement, even that in excess of the policy.⁶

The purpose behind Stowers is to encourage insurance companies to settle claims for the policy limit. Because insurance companies have complete power over litigation, they have a corresponding duty to their insured to exercise the same degree of care that a prudent person would exercise under similar circumstances. Failing to exercise such care is deemed negligent on the part of the insurance company.⁷ Put simply, the insured is protected from the insurance company taking a risk when a reasonable person would have settled.

How Does a Stowers Demand Work?

The Stowers Doctrine is a tool unique to Texas law and has created a new type of settlement demand: the Stowers demand. This demand is a time-sensitive letter sent to a third-party insurance carrier with an offer to settle within the insured’s policy limits.⁸ For a Stowers demand to be valid, five requirements must be met:

1. the claim against the insured is within the scope of coverage;
2. liability is reasonably clear;
3. the demand is within the limits of the policy;
4. the settlement terms are such that an ordinarily prudent insurer would accept it when considering the likelihood and degree of the insured’s potential exposure to an excess judgment; and
5. the demand offers the insurer an unconditional, full release for liability.⁹

If these requirements are met and the insurer fails to accept the offer by the deadline, the defendant’s insurance company may be held responsible for verdict in excess of its insured’s policy limits.¹⁰

Footnotes:

1.  Stephen G. Cochran, Texas Practice Series: Consumer Rights and Remedies § 5.13 (3d ed. 2017).
2.  Id.
3.  American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 846 (Tex. 1994).
4.  See G.A. Stowers Furniture Co. v. American Indemnity, Co., 15 S.W.2d 544, 547 (Tex. 1929).
5.  Id. at 548
6.  Id. at 547
7.  Texas Farmers Ins. v. Soriano, 881 S.W.2d 312, 314 (Tex. 1994).
8.  American Physicians Ins. Exch. v. Garcia, 876 S.W.2d 842, 844–45 (Tex. 1994).
9.  Id. at 849; Trinity Universal Ins. Co. v. Bleeker, 966 S.W.2d 489 (Tex. 1998).
10.  See Ecotech Int'l, Inc. v. Griggs & Harrison, 928 S.W.2d 644, 646 (Tex. App.—San Antonio 1996, writ denied); Stowers Doctrine, Int’l Risk Mgmt. Inst.