GEC C.S.H.B. 1171 75(R) BILL ANALYSIS BUSINESS & INDUSTRY C.S.H.B. 1171 By: Alvarado 4-14-97 Committee Report (Substituted) BACKGROUND The Legislature has authority to create statutory liens or security interests for the payment of debt. Legislative enactments in Texas have historically provided for statutory liens in favor of particular providers of services or materials such as garage men, cleaners, innkeepers, laborers, contractors and hospitals. At present, there is no statutory lien in favor of a health care practitioner. PURPOSE As proposed, H.B. No. 1171 would establish a statutory lien in favor of a health care practitioner. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subtitle B, Title 5, Property Code, by adding Chapter 62 to read as follows: CHAPTER 62. HEALTH CARE PRACTITIONER'S LIEN Sec. 62.001. DEFINITION. In this chapter, "health care practitioner" means an individual who is licensed in this state to provide health care. Sec. 62.002. LIEN. A health care practitioner has a lien on a cause of action or claim of an individual who receives health care services rendered by the practitioner for injuries caused by an accident that is attributed to the negligence of another person. Sec. 62.003. PROPERTY TO WHICH LIEN ATTACHES. (a) The lien attaches to: (1) a cause of action for damages arising from an injury for which the injured individual receives health care services; (2) a judgment of a court in this state or the decision of a public agency in a proceeding brought by the injured individual, or by another person entitled to bring the suit in case of the death of the individual, to recover damages arising from an injury for which the injured individual receives health care services; and (3) the proceeds of a settlement of a cause of action or a claim by the injured individual, or another person entitled to make the claim, arising from an injury for which the injured individual receives health care services. (b) The lien does not attach to: (1) a claim under the workers' compensation laws of this state (Subtitle A, Title 5, Labor Code), the federal Employers' Liability Act (45 U.S.C. Section 51 et seq.), or the federal Longshore and Harbor Workers' Compensation Act (33 U.S.C. Section 901 et seq.); or (2) the proceeds of an insurance policy in favor of the injured individual or the injured individual's beneficiary or legal representative, except public liability insurance carried by the insured that protects the insured against loss caused by an accident or collision. Sec. 62.004. AMOUNT OF LIEN. (a) Except as provided by Subsection (b), the lien is for the amount of the health care practitioner's charges for services provided to the injured individual for the treatment of injuries that resulted from the accident. (b) A lien does not cover charges for services that exceed a reasonable and regular rate for the services. Sec. 62.005. SECURING LIEN. (a) To secure the lien, a health care practitioner must: (1) file written notice of the lien with the county clerk of the county in which the injury occurred; and (2) send by registered or certified mail, return receipt requested, a written notice to each insurer that may have liability arising out of the accident. (b) The notice must be given as provided by Subsection (a): (1) not later than the third business day after the date the services are rendered; and (2) before money is paid to an entitled person because of the injury. (c) The notice must contain: (1) the injured individual's name and address; (2) the date of the accident; (3) the name and address of the health care practitioner; and (4) the name of the person alleged to be liable for damages arising from the injury, if known. (d) The county clerk shall: (1) record the name of the injured individual, the date of the accident, and the name and address of the health care practitioner; and (2) index the record in the name of the injured individual. Sec. 62.006. DISCHARGE OF LIEN. (a) To discharge the lien, the health care practitioner must execute and file with the county clerk of the county in which the lien notice was filed a certificate stating that the debt covered by the lien has been paid or released and authorizing the clerk to discharge the lien. (b) The county clerk shall record a memorandum of the certificate and the date it was filed. (c) The filing of the certificate and recording of the memorandum discharge the lien. Sec. 62.007. VALIDITY OF RELEASE. (a) A release of a cause of action or judgment to which the lien may attach is not valid unless: (1) the health care practitioner's charges were paid in full before the execution and delivery of the release; (2) the health care practitioner's charges were paid before the execution and delivery of the release to the extent of any full and true consideration paid to the injured individual by or on behalf of the other parties to the release; or (3) the health care practitioner is a party to the release. (b) A judgment to which the lien attaches remains in effect until the health care practitioner's charges are paid in full or to the extent set out in the judgment. Sec. 62.008. HEALTH CARE PRACTITIONER'S RECORDS. (a) On request by an attorney for a party by, for, or against whom a claim is asserted for damages arising from an injury, a health care practitioner shall as promptly as possible make available for the attorney's examination the health care practitioner's records concerning the services provided to the injured individual. (b) The health care practitioner may impose reasonable requirements for granting access to the health care practitioner's records under this section, but the health care practitioner may not deny access because a record is incomplete. (c) The records are admissible, subject to applicable rules of evidence, in a civil suit arising from the injury. Sec. 62.009. ATTORNEY'S FEES. If an individual who has pursued a claim or a cause of action against which a lien is asserted by a health care practitioner is represented by an attorney, the health care practitioner shall pay a fee to the claimant's attorney in an amount not to exceed 33.3 percent of the amount collected for the health care practitioner in satisfaction of the lien. SECTION 2. Provides that if any provision of H.B. No. 1171 (should it become law) or the application of H.B. No. 1171 to any person is held to be invalid, that invalidity does not affect other provisions or applications of H.B. No. 1171 which may be given effect without the invalid provision or application. SECTION 3. Provides that H.B. No. 1171 takes effect September 1, 1997, and that it applies only to services rendered by a health care practitioner on or after the effective date. SECTION 4. "Short" emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute adds a requirement (in Sec. 62.002 of the proposed new Chapter) on the part of the health care practitioner to file a lien in the county of residence of the injured individual if the injured individual resides in a county different from the county in which the injury was sustained. This requirement did not exist in the original bill. The substitute also adds a requirement (in Sec. 62.005 of the proposed new Chapter) that the health care practitioner send by registered or certified mail, return receipt requested, a written notice to each injured individual who receives health care services from that health care practitioner arising out of the same injurious episode. This requirement did not exist in the original bill. The substitute (in Sec. 62.005 of the proposed new Chapter) further provides that a failure on the part of the health care practitioner to notify all parties in a timely manner will forfeit the claim of the health care practitioner. This provision did not exist in the original bill. The substitute (in Sec. 62.006 of the proposed new Chapter) restricts the health care practitioner to two business days from receipt of payment for services rendered to discharge the lien. This restriction did not exist in the original bill. The substitute entirely strikes from the original bill Sec. 62.009 (of the proposed new Chapter) which dealt with attorney's fees and it replaces it with a new Sec. 62.009 which provides that a hospital lien has priority over any other still-outstanding liens. The substitute adds a new SECTION 2 (not found in the original bill) which amends Sec. 55.0045 of the Property Code to establish a lien for physician's charges. The substitute renumbers subsequent SECTIONS appropriately.