Daughters of Charity Health Services of Waco v. Linnstaedter (Tex. 2007)

Hospitals treating workers’ compensation patients are bound by Texas Labor Code’s cap on reimbursement, and may not pursue claim for difference against the injured worker, or file lien.

Daughters of Charity Health Services of Waco v. Linnstaedter, No. 05-0108 (Tex. Jun. 1, 2007)(Brister)(workers comp discount)

In this case stemming from a work-related automobile accident the Texas Supreme Court examined whether a hospital may file a lien against a patient's cause of action for tort damages based on the difference between the payment from the workers' compensation carrier and the full amount of its charges for treatment. It was undisputed that the hospital had been paid all it was due in worker's compensation under the Labor Code guidelines. The Court rules that the hospital cannot sue the patient for the discount, and may not place a lien on his tort recovery either. Workers’ compensation fee guidelines in the Labor Code are intended to provide both fair and reasonable reimbursement and effective cost control. If a hospital believes it is entitled to more money, it may avail itself of administrative remedies. In holding that the hospital’s lien violated the Labor Code’s prohibition of private claims against compensation patients, the Supreme Court affirmed the judgments of the courts below.