TTUHSC has been advised to delete indemnification clauses in contracts pursuant to Texas Attorney General Opinion No. MW-475. These clauses need to be eliminated because the other party cannot rely on the indemnification from the state as there are legal limitations on a state agency’s ability to indemnify another party under the laws and Constitution of the State of Texas.
However, when the other party could potentially bill and collect for patient care services performed by TTUHSC, the following indemnification provision must be included:
[AGENCY] [will/will not] bill third-party payors for the services performed by TTUHSC.
If the other party will bill for the services performed by TTUHSC, add the following paragraph:
As consideration for [AGENCY] to bill for those services, [AGENCY] agrees to indemnify TTUHSC, its officers, agents and employees against all suits,
actions, losses, damages, claims or liability of any character relating to such billing
activity assumed by [AGENCY] including all expenses of litigation, court costs and attorney's fees incurred as
a result of submitting an erroneous or incomplete bill or having a claim denied by
a third-party payor resulting from [AGENCY]'s billing activities on behalf of TTUHSC.
If you are unable to successfully negotiate removal of an unacceptable indemnification clause from an agency's contract, or if you are unable to negotiate acceptance by the agency of the billing indemnification clause when it is appropriate, contact the Director of Contracting to assist you with negotiations.