McKim v. Southern Illinois Hospital Services

2016 IL App (5th) 140405, 61 N.E.3d 946
CourtAppellate Court of Illinois
DecidedAugust 26, 2016
Docket5-14-0405
StatusUnpublished
Cited by1 cases

This text of 2016 IL App (5th) 140405 (McKim v. Southern Illinois Hospital Services) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McKim v. Southern Illinois Hospital Services, 2016 IL App (5th) 140405, 61 N.E.3d 946 (Ill. Ct. App. 2016).

Opinion

Modified Rule 23 Order filed 2016 IL App (5th) 140405 July 12, 2016. Motion to publish granted NO. 5-14-0405 August 26, 2016. IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT ________________________________________________________________________

EDWIN McKIM, ) Appeal from the ) Circuit Court of Plaintiff-Appellee, ) Franklin County. ) v. ) No. 14-MR-31 ) SOUTHERN ILLINOIS HOSPITAL SERVICES, ) d/b/a Herrin Hospital, and WILLIAMSON COUNTY ) AMBULANCE, ) ) Defendants ) ) Honorable (Southern Illinois Hospital Services, ) David K. Overstreet, Defendant-Appellant). ) Judge, presiding. _______________________________________________________________________

JUSTICE CHAPMAN delivered the judgment of the court, with opinion. Justices Welch and Goldenhersh concurred in the judgment and opinion.

OPINION

¶1 Defendant Southern Illinois Hospital Services d/b/a Herrin Hospital (Herrin

Hospital) appeals from the trial court's July 25, 2014, order adjudicating liens and

distributing the settlement proceeds. Herrin Hospital contends that the trial court

improperly included Medicare, Medicare Part D, and Medicaid "liens" in the total amount

of liens subject to the 40% cap mandated by the Health Care Services Lien Act. Because

the court allowed 100% reimbursement of the Medicare and Medicaid bills, Herrin 1 Hospital's reimbursement was substantially decreased. In addition, Herrin Hospital

claims that the trial court improperly required the Health Care Services Lien Act

lienholders to pay plaintiff Edwin McKim's costs of suit pursuant to the common fund

doctrine. We find that the judgment order distributing the settlement is contrary to the

plain language of the Health Care Services Lien Act and is in conflict with Medicare's

secondary payer provison and the Illinois Public Aid Code. Additionally, the trial court's

assessment of court costs to Herrin Hospital and Williamson County Ambulance does not

comply with Illinois Supreme Court decisions. We modify the judgment pursuant to our

authority under Illinois Supreme Court Rule 366(a)(5) (eff. Feb. 1, 1994).

¶2 BACKGROUND

¶3 This appeal involves the adjudication of liens under the Health Care Services Lien

Act (770 ILCS 23/1 et seq. (West 2012)). The Health Care Services Lien Act limits the

total amount of medical liens to 40% of the settlement or verdict. At issue is whether

bills owed to Medicare, Medicare Part D, and Medicaid can be included in the 40% cap

under the Health Care Services Lien Act. Also at issue is whether the 40% amount of the

settlement is a "common fund" created for the benefit of the lienholders and whether the

plaintiff's attorney's costs should be paid by the lienholders from their pro rata shares of

the 40% of the settlement.

¶4 Edwin McKim was involved in a motor vehicle accident in which he sustained

bodily injuries and damages. He sought treatment for these injuries at Herrin Hospital.

He and his attorney reached a $16,000 settlement with the at-fault driver.

2 ¶5 McKim filed a complaint to adjudicate liens on May 23, 2014. McKim's medical

bills, resulting from injuries sustained in the motor vehicle accident, totaled $10,172.32.

Herrin Hospital held a $5803 lien against McKim's settlement proceeds. McKim owed

Williamson County Ambulance $1530. McKim also identified Medicare, Medicare Part

D, and Medicaid as entities to which he owed money. The total amount owed to those

three entities was $2839.32. In his prayer for relief, McKim asked the court to limit all of

the medical liens (including the Medicare and Medicaid "liens") to no more than 40% of

the $16,000 settlement−$6400. Acknowledging that the Medicare and Medicaid liens

take priority, McKim asked the court to divide the balance of the $6400−$3560.68−pro

rata between Herrin Hospital and Williamson County Ambulance. He also asked the

court to apportion the costs of suit between the two Illinois Health Care Services Lien

Act lienholders. McKim's costs were $494.93.

¶6 In response to the complaint, Herrin Hospital argued that the 40% cap mandated

by the Health Care Services Lien Act can only be distributed between Herrin Hospital

and Williamson County Ambulance. Furthermore, Herrin Hospital claimed that medical

providers with perfected liens could not be responsible for a pro rata share of litigation

costs. Finally, Herrin Hospital asserted that the Medicare and Medicaid liens could not

be subject to the Health Care Services Lien Act but instead should be adjudicated

pursuant to 42 U.S.C. § 1395y(b)(2)(A)(ii) (hereafter referred to as the Medicare

Secondary Payer Act) and the Illinois Public Aid Code (305 ILCS 5/11-22 (West 2012)).

Herrin Hospital argued that the priority of the liens was Medicare, followed by the

attorney's lien, Medicaid, Health Care Services Lien Act providers, and, finally, McKim. 3 ¶7 The trial court held a hearing and entered the order proposed by McKim on July

25, 2014. In that order, the court combined the Medicare, Medicare Part D, and Medicaid

bills along with the bills from Herrin Hospital and Williamson County Ambulance. The

court held that all bills were subject to the 40% rule and that the total allocated for all of

these bills was $6400. The court's order directed full reimbursement of the Medicare,

Medicare Part D, and Medicaid bills. The remaining balance was to be shared pro rata

by Herrin Hospital and Williamson County Ambulance. Medicare, Medicare Part D, and

Medicaid were not assessed a share of the court costs. The court directed the costs to be

subtracted pro rata from the shares of Herrin Hospital and Williamson County

Ambulance. Finally, the court awarded McKim and his attorney each 30% of the

$16,000. From the $16,000, the parties received the following:

McKim $4800;

Attorney $4800 plus $494.93 in costs;

Herrin Hospital $2421.94 (gross bill of $5803; received

$2812.94 share less $391 in costs);

Williamson County Ambulance $643.81 (gross bill of $1530; received $747.74

share less $103.93 in costs);

Medicare $158.30;

Medicaid $221.41;

Medicare Part D $2459.61.

Herrin Hospital appeals from this order.

4 ¶8 LAW AND ANALYSIS

¶9 Herrin Hospital raises three issues on appeal. First, Herrin Hospital argues that the

trial court erred in adding the Medicare and Medicaid liens to the liens perfected pursuant

to the Health Care Services Lien Act. Second, Herrin Hospital contends that case law

interpreting the Health Care Services Lien Act holds that perfected lienholders are not

responsible for plaintiff's costs of suit. Finally, Herrin Hospital claims that the trial

court's resulting settlement proceeds distribution was incorrect.

¶ 10 As the adjudication involves interpretation of federal and state law, we review the

trial court's order on a de novo basis. Blum v. Koster, 235 Ill. 2d 21, 29, 919 N.E.2d 333,

338 (2009). Statutory language must be given its plain and ordinary meaning. People ex

rel. Madigan v. Kinzer, 232 Ill. 2d 179, 184, 902 N.E.2d 667, 670-71 (2009). If the

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McKim v. Southern Illinois Hospital Services
2016 IL App (5th) 140405 (Appellate Court of Illinois, 2016)

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2016 IL App (5th) 140405, 61 N.E.3d 946, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mckim-v-southern-illinois-hospital-services-illappct-2016.