Illinois Personal Injury Settlements: Healthcare Liens

When a Plaintiff settles his personal injury claim, he may also have one or more liens against the amount of the recovery. Healthcare liens against a settlement may be asserted by the medical providers who have treated and rehabilitated the Plaintiff after suffering an injury. These liens are covered by the Health Care Services Lien Act. 770 ILCS 23/1, et seq. Any licensed hospital, doctor, or physical therapist which has provided medical services may elect to place a lien on the claim.

If the Plaintiff recovers a settlement or judgment, notice of the recovery must be given to each lien holder. The lien holder may seek payment of the amount of reasonable charges which remain unpaid. The Health Care Services Lien Act places limitations on the amount a lien holder can recover from the settlement or judgment.

When an injured Plaintiff receives compensation, through a settlement or a judgment, the total of all healthcare liens cannot exceed forty percent (40%) of the total recovery. Additionally, no group (i.e. physicians, hospitals, etc.) can receive more than one third (1/3) of the total recovery. If the total amount of liens exceeds forty percent (40%), liens shall be reduced so that the total of all healthcare professionals’ liens does not exceed twenty percent (20%) of the recovery and the total of all healthcare providers’ liens does not exceed twenty percent (20%) of the recovery.

Payments by the Illinois Department of Public Aid, Medicare, or Medicaid extinguish the healthcare provider’s rights to further payment through a lien. Illinois law requires healthcare providers to accept payment from Medicaid, if the injured person is covered. Evanston Hospital v. Hauck, 1 F.3d 540 (7th Cir. 1993).

Certain healthcare liens hold “super lien” status. These include Medicare and Medicaid. If the Plaintiff is a Medicare beneficiary and Medicare pays for their medical treatment for the accident, Medicare has a right to reimbursement. The purpose behind this law is to make Medicare a secondary payment option for medical bills due to an injury, the primary option being the liability insurer for the Defendant.

When an injured Plaintiff receives a recovery and Medicare has a right to reimbursement on that recovery, Medicare must be paid within 60 days. Medicare’s reimbursement right takes priority over all other liens from healthcare providers. If the recovery comes from a settlement or a trial award, Medicare will reduce its recovery by the amount the Plaintiff expends to secure the recovery, as long as the recovery is disputed. Medicare is also limited in wrongful death claims. In those cases, Medicare can only recover reimbursement against the damages for medical expenses, but nothing more.

Medicaid may also place a lien on a recovery, but the amount of the reimbursement is much more limited. Medicaid can only assert reimbursement against the portion of the recovery which is designated for medical expenses. Any portion of the recovery for lost wages, past or future pain and suffering, or disability is excluded from this amount.

When you have been injured, the last thing you want to think about is who may have a lien against your recovery. A knowledgeable attorney can ease the stress brought on by lien holders. If you or someone you know has been injured, please contact an experienced attorney so your right to just compensation can be protected.