A trial judge in Jackson County, Ill., refused to follow the case law found in Stanton v. Rea, 2012 IL App (5th) 110187 when calculating the amount of the hospital’s lien amount. In the case of Alma McVey, who was injured after a waitress dropped a tray of drinks on her foot, the issue was how much Memorial Hospital-Carbondale would receive for its $2,891 medical services bill still unpaid.
McVey settled her personal-injury case against the waitress’s employer for $7,500. Under Stanton, attorney fees and litigation expenses should have been deducted from the settlement before calculating the hospital’s share of the settlement. The judge in the McVey case ruled that McVey’s attorney was entitled to $2,250; the hospital would receive $2,500 and the remaining $2,750 would go to the plaintiff, McVey.
The Illinois Appellate Court for the 5th District reversed that ruling, concluding that “the trial court erred in refusing to follow Stanton and begin calculations after the settlement has been reduced by attorney fees and costs.”
The hospital appealed to the Illinois Supreme Court, which reversed the appellate court and overruled Stanton because “there is no language in Section 10 that would allow the calculation of a health-care lien to be based upon the total ‘verdict, judgment, award, settlement or compromise’ less attorney fees and costs.”
The Illinois Supreme Court was asked to consider whether under Section 10 of the act, a lien by a health-care professional or provider must be calculated, as the hospital contends, based upon a plaintiff’s total recovery, or whether, as plaintiff contends, attorney fees and costs are deducted from the award prior to calculating the hospital’s lien.
Under the Health Care Lien Act, the total amount of liens are limited and “shall not exceed 40% of the verdict, judgment, award, settlement or compromise secured by or on behalf of the injured person on his or her claim or right of action.”
The act also provides a structure to divide the liens between health-care professionals and health-care providers. It also permits reallocating the unused amount within the aggregate total limitation of 40% for all health-care service liens under the act.
In this case, the hospital is the only health-care provider or professional with a lien. Consequently, as the trial court correctly recognized, the hospital could not “receive more than 1/3 of the verdict, judgment, award, settlement or compromise.” 770 ILCS 23/10(c).
The plaintiff in McVey urged the state Supreme Court to interpret Section 10 consistent with the reasoning of the appellate court so that attorney fees and costs are deducted before computing the hospital lien. The Supreme Court declined to do so. Simply put, there is no language in Section 10 that will allow the calculation of a health-care lien to be based upon the total “verdict, judgment, award, settlement, or compromise” less attorney fees and costs. On the contrary, every time the legislature sets forth a percentage limitation in Section 10, it refers back to and requires the calculation to be based on the “verdict, judgment, award, settlement or compromise.”
In this case, the plaintiff was asking the court to have attorney fees and costs subtracted from the total settlement prior to the calculation of the health-care services lien which would improperly shift some of the attorney fees and litigation costs to the hospital. The Illinois Supreme Court held that the statutory language in Section 10 of the act is unambiguous and does not permit the deduction of attorney fees and costs prior to calculating the amount to be paid to any health-care lienholder. To the extent that the Stanton case held otherwise, it is hereby overruled.
Kreisman Law Offices has been handling medical negligence lawsuits, nursing home abuse cases, birth injury cases and wrongful death cases for individuals and families who have been injured or killed by the negligence of a medical provider for more than 38 years, in and around Chicago, Cook County and its surrounding areas including, Naperville, Flossmoor, Palatine, Palos Park, River Grove, South Barrington, Schiller Park, Bensenville, Orland Park, Tinley Park, Hanover Park and Oak Park, Ill.
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