March 12, 2012

Legislative Lien Bill Moves Forward in Illinois General Assembly

by Levin & Perconti

Last month our Illinois medical malpractice lawyers discussed the growing problems of medical care providers who refuse to submit bills to patients’ insurers in hopes of getting a larger share of an injury victim’s damage award. The issue has serious effects on the collection of a judgment following an injury award. Many families in desperate need of funds to get their lives together after an accident and injury are often forced to jump through even more legal hoops as a result of this practice.

One of the underlying issues is that many medical providers charge different rates for the same services. Depending on the patient’s insurance coverage or financial situation, the hospital can bill the patient wildly different amounts. Often if a hospital suspects that the patient may be receiving an award or settlement because their injuries were caused by a third party, then the hospital will try to get a portion of that award. The medical providers do this by trying to put a lien on the damage award instead of actually submitting the bills to the health insurance company for payments. All Illinois injury lawyers understand that hospitals negotiate with insurance companies to charge less for services so long as the insurer steers patients to the hospital. That is why the hospital would prefer not to submit discounted bills to insurers, but to place on a lien on the patient’s assets directly. This allows them to ultimately collect much more.

The increasing use of this method by hospitals has serious adverse effects on the community member involved. To help address the issue, a new piece of legislation has been proposed in the Illinois General Assembly which our Illinois personal injury attorneys support. The measure, HB 5823 is being sponsored by State Representative Andre Thapedi. The bill would offer necessary amendment to the Health Care Services Lien Act—which allows the hospitals to engage in the practice to begin with.

The bill provides that if the individual patient has public or private insurance benefits available, then the hospital is required to respect the rates set up by that relationship when submitting medical bills as part of the process. The lien amount will not be able to be inflated from those rates merely because the medical provider expects the injured party to receive a certain-sized award or settlement. In addition, if as part of the litigation the plaintiff’s award is reduced because of comparative fault issues, then the lien amount would be similarly reduced.

Last week the measure made it beyond the first hurdle by passing the House Judiciary Committee. The bill seemed to have solid support, making it out of the committee by a 7-3 vote. The Illinois Trial Lawyers Association President Jerry A. Latherow as well as ITLA Legislative Co-Chairman Mark D. Prince testified in favor of the measure as part of the hearing on the legislation. The advance of the bill was no small feat, considering various influential healthcare industry groups were publically opposed it.

Each Illinois medical malpractice lawyer at our firm appreciates the long legislative process and the many hoops that still must be jumped throughout before this common sense bill becomes law. The measure now moves to the House of Representatives for a full vote. It the bill passes there, then the state Senate will be required to pass the bill and a gubernatorial signature will have to be obtained before the measure actually can begin to help local residents.

See Our Related Blog Posts:

Dealing with Medical Providers Who Don’t Submit Medical Bills

Case Law Update: Insurance Payouts in Medical Malpractice Case