The ICS has been following a line of court cases regarding the calculation of lien payments to health care providers in injury cases. In some jurisdictions, courts have ruled that plaintiffs (patients) in injury cases may deduct and retain litigation costs from the total settlement or judgment amount BEFORE applying the percentages to pay health care liens. Of course, this formula reduced the amounts available for payment of health care liens and effectively required health care providers to share in the payment of litigation costs.
The Illinois Chiropractic Society, along with a number of interested parties, challenged this interpretation as not correctly reflecting the percentages required by the Health Care Services Lien Act. These parties requested the Illinois Supreme Court to review the issue in the case of McVey v. MLK Enterprises, due to the disparity in rulings in various appellate districts. The Illinois Supreme Court has issued an opinion today specifically requiring that health liens be calculated based on 100% of the settlement or judgment amount. Stated another way, the court has overruled the practice of deducting litigation costs and attorney fees from the total settlement or judgment prior to calculating health care liens. Generally, this means that health care lienholders should share in 40% of the total settlement (20% to individual providers and 20% to hospitals) or one-third where there is only one provider. The attorney and the plaintiff (patient) may come to their own mutual agreement as to payment of litigation costs, but the court has determined that those costs do not affect the health lien percentages.
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