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Guide to Medical Liens in Illinois

A medical lien is a demand for payment that doctors, hospitals, and other medical providers attach to your personal injury claim. It allows you to continue receiving treatment without paying before your case is resolved. Once your attorney recovers compensation, your medical providers will be entitled to collect money for their services from your proceeds before you receive your share.

The Illinois Health Care Services Lien Act limits the amount health care professionals and providers can collect from your compensation. Our award-winning Chicago medical malpractice lawyers are dedicated to maximizing your compensation and helping you keep as much of your settlement as possible.

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Why are Medical Liens Placed in Illinois?

When someone else’s negligence seriously harms you, your injuries may require immediate and ongoing attention. Your medical expenses could exceed your insurance coverage, and you likely will not have the means to pay out of pocket. Health care professionals and providers may not provide all the services you need without assurance of payment, which could prevent you from fully recovering from your injuries. A medical lien gives medical providers security to continue treatment.

Image shows a doctor is explaining something to two patients sitting in front of him.

The Illinois Health Care Services Lien Act

The Illinois Health Care Services Lien Act limits the amount health care providers can collect from your proceeds to 40 percent of the amount awarded.  If the sum of your medical bills exceeds 40 percent, the money must be divided among your treating health care providers and professionals in proportion to what you owe each one. The amount collected does not include any amounts you paid before the lien took effect.

When health service providers place a lien on your claim, they must serve written notice of the lien to you and the party you are suing. The notice must be served in person or by certified or registered mail. The law requires the written notice to include all of the following:

  • Your name and address
  • Your injury date
  • The name and address of your health care professional or health care provider
  • The name of the parties you are suing

Who Can File a Medical Lien in Illinois?

The law allows two categories of medical providers to file medical liens: health care professionals and health care providers. The act classifies health care professionals as licensed individuals who work in health care, while health care providers are generally licensed businesses that provide health care. The table below lists examples of both.

Health Care Professionals
Physicians
Dentists
Optometrists
Naprapaths
Psychologists
Physical therapists
Health Care Providers
Hospitals
Home health agencies
Licensed surgical treatment centers
Accredited surgical treatment centers
Long-term care facilities
Emergency medical services personnel

How Your Proceeds Are Divided Between Health Care Professionals and Health Care Providers

Health care professionals and providers are entitled to collect the amounts you owe from the proceeds you recover. They can collect up to a collective total of 40 percent of the recovery. If your medical costs exceed 40 percent of your award, the 40 percent must be evenly divided between health care professionals and providers. Thus, each group can receive 20 percent of your proceeds.

However, if you owe less than 20 percent to one category, the extra may be reallocated to service providers in the other category. For example, if your costs for health care professionals is five percent of your proceeds, health care providers can receive the additional 15 percent.

However, no sub-category of professionals or providers can receive more than 33 percent of your award. For example, the physician category under health care professionals cannot collect more than 33 percent of your proceeds, nor can the hospital category under health care providers.

How Medical Liens Affect Your Personal Injury Case

Medical liens affect the amount you can keep after your case is resolved. The higher your costs, the less money you’ll ultimately receive. However, the Illinois Health Care Services Medical Lien Act prevents medical service providers from taking more than 40 percent, even if your bills are higher.

Suppose you have obtained a $1 million settlement, and your total medical bills were $500,000. The Healthcare Medical Lien Act limits the amount your medical service providers can collect to $400,000. If not for the 40 percent restriction, the providers could have collected the entire $500,000, or 50 percent of your proceeds.

Because your total medical billing in this example is equal to or higher than the 40 percent limit, those in the health care professionals category are entitled to a combined 20 percent of your proceeds. The same is true of those in the health care providers category. Therefore, each category will be entitled to collect $200,000.

How Proceeds Are Divided Between Multiple Providers

Continuing with our example, suppose your medical bills break down as follows:

Physicians – $75,000

Physical therapists – $25,000

Hospital services – $380,000

Home health services – $19,000

Ambulance service – $1,000

Health Care Professionals

Physicians and physical therapists are in the health care professionals category, meaning the total billing for this category is $100,000, or 10 percent of your total recovery.

Health Care Providers

The remaining bills are for services in the health care provider category, totaling $400,000. This figure is 40 percent of your settlement amount, exceeding the 20 percent this category of providers is entitled to recover.

Because the health care professional’s billing totaled less than the 20 percent to which this category would have been entitled, the remaining $100,000 can be allocated to the health care provider category, allowing those providers to recover up to a combined $300,000.

Each sub-category of health care provider is limited to 33 percent of your recovery. In our example, the hospital bills are over this limit, so the hospitals are only entitled to recover $330,000. However, they cannot collect this amount because the maximum amount allotted to health care providers is $300,000.

Notably, no law prohibits medical providers from collecting outstanding debts from you separately. While they cannot assert a lien for the additional amounts, they may pursue collection efforts using other means. However, we will work with your health care providers to minimize your health care costs.

What If Insurance Covered My Medical Care?

Medical providers are only entitled to collect outstanding medical bills for which they have not received payment. They cannot collect payments for amounts your insurance company has already paid. They also cannot bill you for more than your insurer deems reasonable after making contractual adjustments.

However, if your judgment or settlement includes compensation for medical bills your insurance company paid, Illinois law allows the insurance company to collect reimbursement from you. This process is known as subrogation.

Image shows a doctor is explaining something to two patients sitting in front of him.

Managing Medical Liens After an Injury

Medical liens are common in Illinois and should not serve as a cause for alarm. If you have been served with a medical lien, immediately give it to your attorney. Your attorney will notify your health care providers that you have hired counsel. Meanwhile, continue your medical treatment and do not pay providers who have attached a lien to your claim.

While the law allows medical service providers to collect 40 percent of your compensation for medical bills, this is an upper limit. It does not mean 40 percent of your award will go to medical bills. When you choose Levin & Perconti, we will work from all angles to maximize the compensation you take home.

We will aggressively pursue full compensation for your past, current, and future medical bills, lost wages, lost future earnings, and pain and suffering. Our history of record-setting settlements and verdicts has won us the respect of our adversaries, and we will leverage this reputation to maximize your compensation. As experienced Chicago medical malpractice lawyers with over three decades of practice, we have worked with medical providers throughout the state and can negotiate with your doctors to lower your bills so you can keep more of your settlement.

Consult With an Experienced Personal Injury Lawyer

We are dedicated to helping you recover the highest compensation available and keep as much of it in your pocket as possible. With more than 400 years of combined experience and $2 billion of compensation recovered, you can count on our compassionate attorneys to navigate your medical lien and get you the compensation you deserve. You owe us nothing unless and until we win. We charge no upfront fees. Contact us online today or call (312) 332-2872 to schedule your free, no-obligation consultation.

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