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Important New “Healthcare Services Lien Act” Changes Becomes Law

The Illinois Trial Lawyers Association shared encouraging news recently about the signing into law of a helpful new bill that will provide more fairness for all those hurt by the negligence of others, including Illinois medical malpractice sufferers.

Our Chicago medical malpractice lawyers know that many residents are not familiar with the complex financial process both before and after a judgment award. However, this is often the most challenging part of any of these cases. Dealing with the finances during a case and fighting for actual collection after a judgment can require timely, costly, and confusing legal maneuvers. This all adds to the inefficiency of the civil justice system. Changes to improve the process and make it fair to those hurt are welcome.

Fortunately, we have taken a step in that direction recently with the signing into law by Governor Pat Quinn of HB 5823. The law amends the Healthcare Services Lien Act to alter the process for lien holders on a judgment. The Illinois Trial Lawyers Association supported the bill and pushed for its passage throughout the year because of the common sense way it balances the needs of all involved parties.

The New Law
The basic idea is to limit the lien issued to a healthcare professional for medical services provided in certain circumstances. Under the old rule, the medical provider–a hospital–often issued a lien on a possible judgment for a medical bill. The lien was usually as large as possible, often much more than what would be charged for the same care under an applicable private or public insurance program. The hospital often assumed that they would get more by placing a lien on a judgment instead of simply billing the insurance as they would in normal circumstances.

The legislation holds that the holder of the lien shall bear a “pro rata” share of the claimant’s fees and litigation costs. On top of that the lienholder will not be allowed to pursue any claims for an unpaid balance.

The Logic
It is important not to underestimate the way this eases the process for many injury victims. In the past, the rules were skewed to the disadvantage of the one hurt. The injury victim was forced to pay medical bills out of their judgement at substantially higher rates even though they had insurance which would be billed much less. This essentially meant that the medical providers received a windfall simply because the one they treated was hurt by the unreasonable conduct of another. They used the situation to bilk the injury victim more than they otherwise would.

Also, not only would the injury victim have to pay more than usual, but they would have to pay the fees and costs in obtaining that judgment. With passage of the bill, however, the lienholder would pay their share of the costs of obtaining the judgement. Without the legal work, there would be no judgment for the lien anyway.

The Chicago injury attorneys at our firm work on many different kinds of cases, including Illinois medical malpractice, nursing home abuse, and other forms of personal injury where these sorts of issues are often in play. We appreciate the legislature’s common-sense approach to improving this lien system so that plaintiffs are not unfairly burdened during this already complex and difficult process.

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