8-27-12; Health Care Liens in IL Personal Injury/Wrongful Death Claims Re-Tailored by New ITLA-sponsored Legislation

We aren’t sure why but they skipped WC liens in making these changes. Assume you have a personal injury claim by Paula Plaintiff who is in a motor vehicle accident and runs up a $100,000 medical tab with ABC Hospital—the hospital puts Paula Plaintiff and her lawyer on notice of their lien. Paula Plaintiff’s lawyer is trying to get a jury to give Paula a $300,000 verdict—the jury finds Paula to be 40% at fault and awards $180,000. Does ABC Hospital get their $100K back, leaving Paula and her lawyer to split the $80K remainder?

Well, the answer to that question will change on January 1, 2013 because HB5823 quietly became law last week. The goal of this legislation was to apportion medical providers’ lien recoveries in personal injury/wrongful death litigation in IL. This is one of those sort of “stealth” laws where the forces of the Illinois Trial Lawyers Ass’n (our IL Plaintiff bar) quietly want something for their politically-donating membership and they unobtrusively get it. This bill has been signed by our Governor and will be in effect for all IL PI/Wrongful Death claims pending on January 1, 2013.

It does not affect workers’ comp liens but it will affect most other liens from health care providers. Without knowing it, doctors, hospitals and other care-providers have now statutorily “hired” the respective Plaintiff attorneys and will now owe them fees and litigation expenses despite the fact there is no true attorney-client relationship. The Illinois State Medical Society or ISMS did weigh in on this bill and appears to have eventually approved the final form. Our biggest concern with it will be how our judiciary handles these issues in negotiations and pretrials.

If it won’t bore you to death to read it, the new law says:

Sec. 30. Adjudication of rights. On petition filed by the injured person or the health care professional or health care provider and on the petitioner's written notice to all interested adverse parties, the circuit court shall adjudicate the rights of all interested parties and enforce their liens. A petition filed under this Section may be served upon the interested adverse parties by personal service, substitute service, or registered or certified mail.                      


Sec. 50. Subrogation claims. If a subrogation claim or other right of reimbursement claim that arises out of the payment of medical expenses or other benefits exists with respect to a claim for personal injury or death, and the personal injury or death estate claimant's recovery is diminished:             


(1) by comparative fault; or               

(2) by reason of the uncollectibility of the full value of the claim for personal injury or death resulting from limited liability insurance;


the subrogation claim or other right of reimbursement claim shall be diminished in the same proportion as the personal injury or death estate claimant's recovery is diminished. Unless otherwise agreed by the interested parties, the amount of comparative fault and the full value of the claim shall be determined by the court having jurisdiction over the matter. After reduction of the subrogation claim or other right of reimbursement claim due to either comparative fault or limited liability insurance, or both, the party asserting the subrogation claim or other right of reimbursement claim shall bear a pro rata share of the personal injury or death estate claimant's attorney’s fees and litigation expenses.


This Section 50 does not apply to any holder of a lien under the Workers' Compensation Act, the Workers' Occupational Diseases Act, or this Act including, but not limited to, licensed long-term care facilities, physicians, and hospitals, or to claims made to recoup uninsured payments pursuant to Section 143a of the Illinois Insurance Code or underinsured payments pursuant to Section 143a-2 of the Illinois Insurance Code. A subrogation claim or other right of reimbursement claim may be adjudicated even when a lien has not been filed regarding such claim.                   

You may note Plaintiff’s counsel is now entitled to fees/costs to recover the medical provider’s lien—the amount of the “fees” is not stated. This means they may be able to charge whatever they want to charge consistent with the ruling of the Circuit Court. Some plaintiff attorneys charge as much as 49% of the recovery after a hearing/appeal so the medical lien can be reduced by any comparative fault, lowered insurance coverage and as much as 49% for attorney fees and whatever for court costs.

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