Many of our fellow Illinois medical malpractice attorneys have confronted a new challenge when trying to actually obtaining funds following a settlement for those families that they represent. As we have often explained, actually securing a settlement or a successful verdict is often only 50% of the battle. In some cases it may only represent 25% of the battle. That is because there are many complex issues that affect the collection process following a settlement or verdict.
Often the defendant themselves seek to stall, hide assets, or shift blame in order to make collection difficult. This is often the case when complex corporate structures are involved, each of which tries to shield itself from liability. However, often the collection problem can be made much worse by third parties-like hospitals and insurance companies.
Every Illinois personal injury attorney likely understands the role the medical bills play in client’s recovery. For example, if someone is injured in a car accident caused by another, they may reach a settlement with the other party (usually their insurance company) to pay for the damage (personal and property) caused by the accident. In a typical case, a hospital will submit bills to the injured party’s health insurance company, allowing insurance companies to pay those bills. However, hospitals offer steep discounts to those insurance companies. When the hospital suspects that a patient may receive a tort settlement, they often refuse to submit the bills which include the steep discount. Instead, they try to place a lien on the settlement itself. You can bet that the lien amount is much higher than what would be submitted in a bill.
However, in many cases there is more benefit for the client by having a bill paid by their insurance carrier and not out of their possible tort recovery. In these cases, it is important for the injury attorney to figure out ways to get the hospital to actual submit the bills to the insurance provider for payment. This month an article in the Tort Trends newsletter from the Illinois State Bar Association discussed the issue. The author, Dennis Berkbigler, offered a strategy for attorneys in this situation. We recommend taking a look at the piece get more information on how you might be able to work through these situations in your case.
The articles includes a sample letter that attorneys should consider using as a template when dealing with hospitals in these situations. The sample letter offers several arguments to make. For one, under the Illinois lien statute which allows the hospitals to take this approach, the total of all liens cannot exceed 40% (and no individual category can exceed 33%). Therefore, if multiple parties have liens, the hospital may actually receive less than they would by submitting the bills to the insurance company. In addition, the patient is a third-party beneficiary of the contract between the hospital and the insurance company for the discounted rates. As such the client-patient may be able to sue to enforce that contract (and the discounted rates). Finally, a tortuous interference charge may even be filed against the hospital for damaging the client’s agreement with his health insurance provider.
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