When faced with medical bills after a car accident, many people prefer to have a medical lien placed on their bills. When a lien is placed on a bill, this means that the bill does not have to be paid until a case is settled or until the end of a court case. This scenario applies when someone’s injuries are the fault of another person. A claim will have been made against that person. The hospital or doctor has agreed to wait until the case has been resolved before actively pursuing the bill.
The Illinois Healthcare Services Lien Act
The placing of a medical lien is actually a legal procedure. It is a simple process, but has the force of law behind it. In exchange for their willingness to wait, the medical provider prepares a document which follows the requirements of the Illinois Medical Lien Act. The law can be found at 770 ILCS 23/1. Certain steps are taken to make sure that this document is enforceable. In following this legal process, the doctor or hospital is doing more than just taking a patient’s word that the bill will be paid at the end of the case. Often an insurance company is involved on behalf of the person who is responsible for causing that injury, and the filing of a lien requires the insurance company to ensure that the bill is paid. The attorney for the injured individual also has to make sure that the lienholder (in this case, the medical provider) is paid. In other words, legal safeguards are in place so that the lien cannot be ignored. Placing a medical lien is much more forceful than an informal or verbal agreement to wait on payment. The lien acts as a security interest against the pending case that you have against whoever was responsible for your injury. You or your attorney will receive a Notice of a Health Care Provider Lien when a lien is placed on your case by a medical provider.
A valid lien has to be very specific in Illinois. It must identify the injured person and the provider. It also has to be in writing, must name the negligent party, and be served a certain way as dictated by the Act. They are normally prepared by the legal department of a hospital or medical provider. This is not something that, as a patient, you have any control over. You can, however, ask your provider if they would be willing to work on a lien basis. This is very common for ongoing treatments such as physical therapy.
Can I Require my Doctor to File a Lien on my Injury Case?
No. Many providers are willing to put a lien on a medical bill when they know that there is a case pending, but they do not have to. Doctors and hospitals often will work on a lien, especially if the medical bill is a large sum. They understand that various treatments are needed to help a patient heal, but if left to pay out of pocket, those treatments might otherwise be cost prohibitive. They also may prefer a lien over submitting a bill through the patient’s health insurance as a way around the contractual billing rates with the health insurance company. A lien cannot be forced upon a provider because all providers have the right to be paid in a timely manner and set their own billing practices. Likewise, you cannot put a lien on your own medical bill. This is a right afforded to the provider of medical service, not the recipient.
Letters of Protection as an Alternative
A Letter of Protection (LOP) is a legal document used in personal injury cases in Illinois that will also ensure that an injured person can receive necessary medical treatment while their case is pending. When an accident victim does not have health insurance or cannot afford out-of-pocket medical expenses, an LOP allows them to receive treatment on credit.
Some providers, like a physical therapist, may be willing to accept a Letter of Protection from your attorney. There are some differences between a Healthcare lien and a Letter of Protection in Illinois, but they accomplish similar things. The letter is typically issued by the injured person’s attorney to a healthcare provider, promising that medical bills will be paid from any settlement or court award in the case.
LOPs are especially useful in cases where the injured party is waiting for compensation from an at-fault party’s insurance company. Rather than delaying medical treatment, the injured person can continue receiving necessary care without immediate payment. However, it is important to understand that an LOP is not a guarantee of payment—if the case does not result in a favorable settlement or verdict, the patient remains responsible for the outstanding medical bills.
While Letters of Protection can provide much-needed relief to accident victims, they also come with risks. The health care provider needs to understand that there is a chance that the case will not turn out as expected, and they may be left having to collect. The patient needs to understand that ultimately, bills that they incur for treatment are ultimately their responsibility, which would be anyway.
Some medical providers may charge higher rates for services provided under an LOP than they would for insurance-covered treatment. In any case, since the bill is usually not going through health insurance, the benefit of the contractual health insurance discount is lost. Additionally, because the healthcare provider is relying on the case’s outcome for payment, they may be more involved in legal proceedings, such as providing testimony regarding the extent of the injuries. For injured individuals considering an LOP, it is crucial to discuss the implications with an experienced personal injury attorney to ensure they fully understand their financial obligations and legal rights.
What if all of the Health Care Liens exceed what I get in my injury case?
Don’t worry, you won’t be left with nothing. While the Health Care Lien Act protects health care providers by making sure that they are paid, it also protects the patient. The health care lienholders’ combined interests cannot legally exceed 40% of the total recovery from your case. If there is not enough money to go around without hitting the 40% ceiling, the law provides for pro-rata shares and further differentiates between different kinds of providers. However, that does not mean that the remainder of your medical bills are forgiven. In order to try to avoid having to pay any additional bills out of pocket after your case closes, your attorney may try to work something out with the lienholders, where appropriate. Often, and depending on the total bill amounts, negotiations are had to reduce the bills when your case is about to settle. These end negotiations on medical bills with lienholders is an additional benefit of having a personal injury attorney represent you.
Besides a Medical Lien, what other options exist for dealing with bills?
How medical bills are paid following an accident has many layers of complexity beyond the healthcare liens. Health insurance, MedPay, Medicare, Medicaid and other avenues of payment are often involved. Depending on the circumstances of your situation, it is best to speak to an attorney if you are juggling numerous bills and aren’t sure about how and when they should be paid. Liens and Subrogation are legal complexities which have implications for your case that cannot be ignored.
If you suffered a serious accident in the Chicago area and are tired of dealing with the bills and various insurance companies, give us a call. We can help. We are located in both Cook County (Schaumburg) and in Kane County (Elgin), serving both counties in addition to DuPage, Lake and McHenry counties.