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Uninsured / Under-insured Proceeds Are Subject to Lien Claims Under the Health Care Services Lien Act

In McRoberts v. Porter, the Appellate Court considered the application of the Health Care Services Lien Act and its application to uninsured/under-insured claims. The Health Care Services Lien Act provides that any healthcare professional who renders any service in the treatment, care, or maintenance of an injured person…should have a lien upon all claims and causes of action of the insured person for the amount of the healthcare professionals or healthcare providers reasonable charges up to the date of payment of damages of the injured person. The total amount of liens, under this act, however, 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. Traditionally, liens applied to tort actions but not claims against insurance.

In McRoberts v. Porter there was a car accident. Three people sustained bodily injuries and damages. There was a liability policy of $50,000.00, which the plaintiffs collected. There was another under-insured motorist benefit of another $50,000.00. The total insurance was $100,000.00.

The liability coverage is clearly subject to liens under the statute. The question was whether or not it applies to under-insured benefits.

In McRoberts v. Porter, the total medical bills were over$320,000.00. Several health care providers filed liens under the Health Care Services Lien Act. The trial court held that the phrase “all claims and clauses of action” included uninsured/under-insured coverage. Therefore, applied the act giving 40% of the $100,000.00 to the lien claimants.

Then plaintiff appealed. The Appellate Court agreed with the trial court. It indicated that the Health Care Services Lien Act is a statute so lien laws are liberally construed. It looked at Section 20 of the Health Care Services Lien Act which provides that “the lien of the health care provider or health care professional under this act shall, from and after the time of the service of the lien notice, attach to any verdict, judgment, award, settlement, or compromise secured by or on behalf of the injured person.” 770 ILCS 23/20.

Accordingly, the Appellate Court found that the statute was not ambiguous. The statute was written to encompass any and all claims and awards. It looked at the opinion in Progressive Universal Insurance Co. of Illinois v. Taylor, 375 Ill. App. 3D 495, 874 N.E.2d 910 (2007). The court in Progressive held that medical payment coverage constitutes a “claim” under the Health Care Services Lien Act. Accordingly, the Fifth District Court of Appeals felt that uninsured/under-insured coverage is a “claim”.

The statute is not ambiguous. It allows any and all claims to be considered part of the proceeds which can be attached by liens under the Health Care Services Lien Act. Many people who try to settle their own claims have difficulty with lien claimants. They do not know who gets paid what. They can end up sued by insurer’s. At Ackerman Law Office we keep up on the law concerning lien services and know how to handle the lien claimants. Contacting us is easy and fast.