EDIT: The Illinois Supreme Court has reversed this case. Ignore everything I wrote below, and remember that you’re stuck with the Lien Act as the only means to reduce hospital and physician’s liens. – HZ 3/24/11
Ever wonder how you can tell you’re lame? When you write a blog post about how a case on “hospital liens and the common fund doctrine” is “interesting.” This is a far cry from the old me, who was only interested in baseball and playing guitar.
Anyway, the case (which you can find here) is from the 5th District Appellate Court. It holds that the common fund doctrine is applicable to hospital liens, and can be used to reduce the amount hospitals recover from a personal injury verdict or settlement.
Yet in a way, it’s broader than that. In a more accurate way, it’s far narrower.
By its language, the case seemingly applies Bishop v. Burgard, 198 Ill.2d 495, 509 (2009) not just to hospitals, but also to any health care provider asserting a lien against an injured party. How does this work? Here:
- Hospital bills patient $10,000.
- Case settles for, say, $100,000.
- Client pays $33,333.33 (or so) in attorneys fees out of the settlement proceeds.
- Hosptial would normally be entitled to its entire $10,000. Yet this case notes that the Hospital is only getting repaid by virtue of the attorney’s work, and would reduce the Hospital’s recovery to $6,666.66 (representing 2/3 of the total).
Ah, but it’s not that simple.
The last paragraph of the opinion is important, so hopefully trial lawyers stopped jumping up and down for a minute to read the whole case. The case takes no opinion on whether the hospital is entitled to the remaining 1/3 of its billed amount or not. THIS IS VERY IMPORTANT!
Just like the Health Care Lien Act, this looks like it would reduce a lien but not reduce the amount of the bill. The key to handling a case like this, as a plaintiff’s lawyer, is to negotiate a final settlement of the provider’s bill rather than taking your 1/3 and going home. If you don’t, your client could be billed for the remainder, sometimes weeks or months later after all of the settlement money has been spent.
(Howard Zimmerle is a car accident lawyer in Rock Island and Moline, Illinois - with a new office in Davenport Iowa.)