Daughters of Charity Health Services of Waco v. Linnstaedter

Few patients today ever pay a hospital’s full charges, due to the prevalence of Medicare, Medicaid, HMOs, and private insurers who pay discounted rates. 1 The question presented here is whether a hospital paid by a workers’ compensation carrier can recover the discount from its full charges by filing a lien against a patient’s tort recovery. Because hospitals cannot sue such patients for the discount, we hold they cannot accomplish indirectly (by filing a lien) what they could not do directly (by filing suit).

Donald Linnstaedter and Kenneth Bolen were injured in an auto collision while riding…