All personal injury victims that file a lawsuit seeking compensation for their injuries must ultimately face a health care provider’s claim for payment of their respective charges. Some physicians refuse to bill the patient’s health care insurance provider and receive compensation at greatly reduced rates. Instead they gamble by filing a “lien” against any monies that may be recovered in their patients personal injury claim. If the personal injury claim is successful they hope to recover the full amount of their bill without deduction.
The lien procedure is simple and effective except when the monitory recovery is small as compared to the total health care charges. Under the present statutory law in Illinois up to 40 % of the personal injury recovery can be taken by all health care providers. When the patients attorney’s fees and expenses of litigation the individual nets a small sum of money.
When all of the patients bills are paid by their health insurance provider they face a similar fate under a “subrogation” contractual provision within the policy.
New changes to the Health Care Services Lien Act, which become effective on Jan. 1, 2013 make it easier to deal with health care liens and subrogation claims. 770 ILCS 23/1 et seq.
The most significant change to the law will allow the court to reduce the amount of a subrogation claim when the plaintiff’s recovery is diminished due to limited insurance or comparative fault. The new law also makes it easier to deal with lien/subrogation claimants by allowing the plaintiff to notify these parties of a petition to adjudicate rights under the new act by registered or certified mail. Under the old law the patient was required to serve the provider with a summons just as in a new lawsuit.
At the present time Chicago Injury Attorneys most often recommend that the client submit all of their related medical charges to their health insurance providers. The reason for the recommendation is that the health care lien is not subject to a reduction for attorney’s fees where the subrogation claim is so reduced. The reduction is pursuant to the judicial “common fund doctrine”, which permits a reduction of 1/3 from all monies collected and designated to be paid to the health insurance company. Wendling v. Southern Il Hosp Services. 242 Ill 2d 261 (2011)
Health care providers do not have to reduce their liens on account of the common fund doctrine. The basic idea is that a plaintiff owes the medical bills, lawsuit or not – it’s a debt. Wendling, 242 Ill 2d at 265. Contrarily, the plaintiff doesn’t owe the subrogation interest holder any money. It wouldn’t have gotten the money had the attorney not worked on its behalf. Id at 266.
Now for the changes to the new law!. The most prominent change in law deals with subrogation claims. 770 ILCS 23/50. When there isn’t enough insurance, or when the plaintiff shares fault for his injury, the amendment will provide a device for reducing the subrogation interest holder’s claim.
The new law requires that the subrogation interest be “diminished in the same proportion” as the injured person’s claim. 770 ILCS 23/50. Since the plaintiff can only recover a percentage of the full value of his injury ($50,000 instead of $125,000), the subrogation interest is reduced accordingly. But the math doesn’t end there. The new amendment also requires that the subrogation claim be further reduced to share in the attorney fees and costs (like the common fund doctrine).
When the case is settled before trial, the plaintiff can request that the court conduct a hearing to ascertain the case’s full value or to find that the plaintiff accepted a reduced amount because of comparative fault. In each instance the goal is to determine the applicable percentage to reduce the lien or subrogation claim.
As an experienced personal injury attorney the trouble I foresee in applying the new law is that when a case settles prior to trial the court will be required to conduct a trial within a trial to determine the appropriate potential reasonable value of the plaintiff’s claim. That unless a summary procedure is put in place there exist a strong likelihood that the new low will quickly require an amendment.
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The New Illinois Health-care lien act becomes Law on January 1, 2013