Kioutas v. Northshore University Healthsystem

2022 IL App (1st) 210438-U

• Court: Appellate Court of Illinois
• Decided: August 12, 2022
• Docket: 1-21-0438
• Status: Unpublished

Opinion

2022 IL App (1st) 210438-U FIFTH DIVISION AUGUST 12, 2022

No. 1-21-0438

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1). ______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

______________________________________________________________________________

ANNA KIOUTAS, individually and on ) Appeal from the behalf of all others similarly situated, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 19 CH 6286 ) NORTHSHORE UNIVERSITY HEALTHSYSTEM, ) Honorable an Illinois not-for-profit corporation, individually ) Sophia H. Hall, and d/b/a NORTHSHORE HOSPITAL, ) Judge Presiding. ) Defendant-Appellee. ) ______________________________________________________________________________

JUSTICE CUNNINGHAM delivered the judgment of the court. Justices Hoffman and Connors concurred in the judgment.

ORDER

¶1 Held: The trial court’s judgment granting the defendant’s motion to dismiss is affirmed.

¶2 The plaintiff-appellant, Anna Kioutas, was involved in an accident and received medical

treatment from the defendant-appellee, NorthShore University Healthsystem (NorthShore). On

May 22, 2019, based on the billing for her treatment, Ms. Kioutas filed a class action complaint in

the circuit court of Cook County against NorthShore, alleging that NorthShore refused to bill

Medicare and instead placed medical liens with the third-party tortfeasor and their liability No. 1-21-0438

insurance carrier. NorthShore filed a motion to dismiss the complaint, which the trial court granted.

Ms. Kioutas now appeals. On appeal, Ms. Kioutas argues that the trial court erred in dismissing

her complaint by: (1) basing its decision on an issue not contained in the complaint; and (2) failing

to consider NorthShore’s “Agreements and Authorizations” form. For the reasons that follow, we

affirm the judgment of the circuit court of Cook County.

¶3 BACKGROUND

¶4 On November 18, 2016, Ms. Kioutas was involved in an automobile accident, where there

is third-party liability. She went to NorthShore for treatment of her injuries. NorthShore placed a

medical lien for Ms. Kioutas’ medical expenses against any settlement she might recover from the

third-party’s insurer. As a result of NorthShore’s action, on May 22, 2019, Ms. Kioutas filed a

class action seven-count complaint in the circuit court of Cook County against NorthShore. In the

complaint, she alleged that NorthShore refused to bill Medicare and her supplemental insurance

carrier but instead placed medical provider liens with the third-party tortfeasor and their liability

insurance carrier. She asserted that NorthShore’s actions: violated the Consumer Fraud and

Deceptive Business Practices Act (Act) (815 ILCS 505/1 et seq. (West 2018)); were a breach of

written contract; were a breach of implied contract and constituted unjust enrichment; and were an

intentional interference with her contractual relationship with her health insurance providers. Ms.

Kioutas attached to her complaint the “Agreements and Authorizations” form she signed at

NorthShore, which forms the basis for her claim under the Act. In the “Assignment of Insurance

Benefits/ Payment Guarantee” section of the “Agreements and Authorizations” form, it states:

“I further understand and agree that I am responsible for the non-discounted

full cost of services provided to me, as permitted by Illinois law, if: (1) I am

uninsured; (2) I do not provide NorthShore with sufficient insurance information at

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the time of service or within a reasonable time thereafter to permit timely

processing of payment with any insurer; and/or (3) my service may be covered by

a third party liability insurance carrier. *** By signing this form *** I authorize

NorthShore to file a hospital lien, or any other action permitted under Illinois law,

to obtain full payment for the services provided.”

In response to Ms. Kioutas’ complaint, NorthShore filed a motion to strike the class allegations,

as well as a motion to dismiss the complaint in its entirety, pursuant to section 2-615 of the Code

of Civil Procedure (735 ILCS 5/2-615 (West 2018)).

¶5 Ms. Kioutas requested leave to file an amended complaint, which the trial court granted.

In the amended complaint, she referenced exhibit A, a medical invoice which formed the basis for

the medical provider lien, and exhibit B, which was the “Agreements and Authorizations” form.

Both exhibits were attached to the amended complaint. Exhibit A shows that NorthShore attempted

to bill Medicare, but Medicare rejected the invoice. NorthShore withdrew its original motion to

dismiss and filed a new motion to dismiss pursuant to section 2-615 based on the amended

complaint. In its motion to dismiss, NorthShore asserted, inter alia, that it did attempt to bill

Medicare first, despite Ms. Kioutas’ claims to the contrary. The trial court allowed the parties to

file briefs on the motion to dismiss and held oral arguments.

¶6 On February 4, 2021, the trial court entered a detailed written order on the motion to

dismiss. In its order, the court found that “the invoices attached to the Complaint show that

NorthShore billed Medicare. Accordingly, the invoices contradict the allegations in the Complaint

that NorthShore failed to bill Medicare as an asserted ground for [Ms. Kioutas’] claims.” Despite,

this finding, the court still analyzed the arguments in each of the complaint’s counts on their face,

assuming the veracity of each of the allegations within the counts. To address count I, the claim

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based on the Act, the court analyzed the Illinois Lien Act (Lien Act) (770 ILCS 23/10(a) (2018))

and relevant case law to determine that NorthShore was not required to bill Medicare before

pursuing a lien against the third-party tortfeasor. Additionally, the court reviewed federal law and

stated that a medical provider, “who is seeking payment from Medicare, [is able] to proceed against

the ‘primary payor,’ here the tortfeasor’s insurer, [which is] liable for the injury to the medical

provider’s patient. The regulations do not require the medical provider to seek payment from

Medicare before proceeding against the tortfeasor’s insurer.” As such, the court dismissed count I

of Ms. Kioutas’ complaint. At the same time, the court also dismissed the remaining counts of the

complaint on various grounds. The trial court continued the case for status on a final order until

March 2021. On March 22, 2021, after Ms. Kioutas informed the court that she was not going to

file a motion to reconsider or seek leave to amend the complaint, the court entered its final order

dismissing the entire complaint with prejudice. On April 19, 2021, Ms. Kioutas filed her notice of

appeal.

¶7 ANALYSIS

¶8 We note that we have jurisdiction to consider this matter, as Ms. Kioutas filed a timely

notice of appeal following the trial court’s judgment. See Ill. S. Ct. R. 301 (eff. Feb. 1, 1994); R.

303 (eff. July 1, 2017).

¶9 On appeal, Ms. Kioutas argues the trial court erred by dismissing count I of the complaint,

which alleged NorthShore placed a lien on Ms. Kioutas’ future settlement with the third-party

tortfeasor instead of Medicare and her supplemental insurance carrier in violation of the Act.

Specifically, she claims that the trial court based its ruling on whether NorthShore could legally

place the lien on a future settlement, which was not challenged in her complaint, and failed to

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consider the language of the “Agreements and Authorizations” form in its decision. 1

¶ 10 When reviewing an order granting a motion to dismiss pursuant to section 2-615, we must

determine whether the allegations of the plaintiff’s complaint, viewed in the light most favorable

to the plaintiff, are sufficient to establish a cause of action upon which relief may be granted.

Beahringer v. Roberts, 334 Ill. App. 3d 622, 626 (2002). “Any document attached to the pleading

will be treated as part of the pleading if the pleading specifically incorporates it by reference.”

Bajwa v. Metropolitan Life Insurance Co., 208 Ill. 2d 414, 432 (2004). To incorporate an exhibit

by reference, the pleading must identify the exhibit specifically and show an intent to include it as

part of the pleading. Bajwa, 208 Ill. 2d at 432. “In reviewing the sufficiency of a complaint, we

accept as true all well-pleaded facts and all reasonable inferences that may be drawn from those

facts.” Spencer v. Ryland Group, 372 Ill. App. 3d 200, 203 (2007). After disregarding any legal or

factual conclusions, we must determine whether the remaining factual allegations are sufficient to

state a cause of action, and if not, the motion to dismiss should be granted. Lake County Grading

Co. of Libertyville, Inc. v. Advance Mechanical Contractors, 275 Ill. App. 3d 452, 457 (1995).

Despite looking at the plaintiff’s complaint in the light most favorable to the plaintiff, “factual

deficiencies may not be cured by liberal construction.” Advance Mechanical Contractors,

275 Ill. App. 3d at 457. The standard of review for a motion to dismiss is de novo. Illinois

Insurance Guaranty Fund v. Liberty Mutual Insurance Co., 2013 IL App (1st) 123345, ¶ 14.

¶ 11 Initially, we note, as the trial court did, that Ms. Kioutas’ allegations that NorthShore did

not bill Medicare first cannot be taken as true because the exhibit attached to her complaint shows

otherwise. See Bajwa, 208 Ill. 2d at 431-32 (stating that if there is “a conflict between such written

1 Ms. Kioutas does not challenge the dismissal of the other counts in her complaint.

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exhibits and the allegations of a pleading, the exhibits control”). In that attached invoice,

NorthShore attempted to bill Medicare, but Medicare rejected it. As such, Ms. Kioutas’ claims fail

to state a claim on their face because they are all based on the false allegation that Medicare was

not billed initially. In other words, count I of her complaint did not state a claim since the invoice

attached to the complaint directly disputed the claim made in the complaint. The court did not err

in dismissing count I on the basis that her allegations were factually inaccurate and insufficient to

state a claim. However, we will nonetheless address the merits of each argument raised by Ms.

Kioutas, assuming her allegations could be taken as true.

¶ 12 Ms. Kioutas argues that the trial court based its decision on an issue that was not alleged

in the complaint. Specifically, she claims the trial court examined the validity of the medical lien

placed on the third-party tortfeasor and the tortfeasor’s liability insurance carriers. The court also

examined whether Northshore had authority to do so.

¶ 13 We initially note that Ms. Kioutas did not allege in her complaint that NorthShore did not

have the authority to place a medical lien on the third-party tortfeasor’s liability insurance carrier

and a potential settlement; rather, she alleged that NorthShore was required to bill her health

insurance or Medicare first. However, despite Ms. Kioutas’ argument that she now presents, the

trial court did not simply overlook the issue of whether Ms. Kioutas stated a claim under the Act.

Instead, it analyzed whether, when taking the allegations as true, Ms. Kioutas’ complaint stated a

claim. The court found that she did not based on state and federal law.

¶ 14 Section 10b of the Act (815 ILCS 505/10b (West 2018)) states that the Act does not apply

to “[a]ctions or transactions specifically authorized by laws administered by any regulatory body

or officer acting under statutory authority of this State or the United States.” The primary objective

of statutory construction is to discern the legislature’s intent, and the best way to ascertain that

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intent is the plain language of the statute. Bank One Milwaukee v. Sanchez, 336 Ill. App. 3d 319,

323 (2003). Any health care professional or health care provider may file “a lien upon all claims

and causes of action of the injured person for the amount of the health care professional’s or health

care provider’s reasonable charges up to the date of payment of damages to the injured person.”

770 ILCS 23/10(a) (West 2018)). The Lien Act does not require that a provider must first bill an

injured party’s health insurance carrier before pursuing a lien against the tortfeasor’s liability

insurance carrier or the injured party’s settlement. Barry v. St. Mary’s Hospital Decatur, 2016 IL

App (4th) 150961, ¶ 50.

¶ 15 Here, the trial court reviewed the Act, the Lien Act, and Barry to determine that if a medical

provider complies with Federal or Illinois law, it is exempt from a violation of the Act. Therefore,

assuming arguendo that Northshore placed a medical lien against a future settlement or the

tortfeasor’s liability insurance before billing Ms. Kioutas’ health insurance or Medicare, it would

not have been a violation of the Act. Accordingly, even under those circumstances as alleged by

Ms. Kioutas, she cannot state a claim under the Act on these facts. As such, the trial court did not

err in dismissing count I of the complaint.

¶ 16 Ms. Kioutas further argues that the trial court erred when making its determination by not

reviewing the “Agreements and Authorizations” form that she signed. As we noted, it was

impossible for NorthShore to violate the Act if it complied with Illinois law. If the factual

allegations in the complaint are taken as true, they still could not amount to a violation of the Act,

and consequently, the court did not need to look at the “Agreements and Authorizations” form.

Thus, the trial court did not err by dismissing the complaint pursuant to section 2-615, specifically

as to count I, without looking at the “Agreements and Authorizations” form. We, therefore, affirm

the trial court’s judgment dismissing Ms. Kioutas’ complaint.

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¶ 17 CONCLUSION

¶ 18 For the foregoing reasons, we affirm the judgment of the circuit court of Cook County.

¶ 19 Affirmed.

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