An appeals court has confirmed suburban-based NorthShore University HealthSystem did not have to bill Medicare for a traffic accident victim's medical tab, before putting a lien on a possible settlement from the victim's claim against the other driver.
The Aug. 12 decision was written by Justice Joy Cunningham, with concurrence from Justices Thomas Hoffman and Maureen Connors, of Illinois First Judicial District Appellate Court. The ruling favored the Evanston-headquartered Northshore University HealthSystem in a class action against it by Cook County resident Anna Kioutas. The decision was filed under Illinois Supreme Court Rule 23, which may limits its use as precedent.
After a traffic accident in 2016, Kioutas was treated at a NorthShore facility in Skokie, according to court papers. She filed a claim against the driver of the other vehicle, who was covered by State Farm. The amount of that claim reached $13,518. In turn, NorthShore placed a lien for Kioutas' $2,958 bill on any payout she might receive from State Farm.
In 2019 in Cook County Circuit Court, Kioutas sued NorthShore, alleging that before placing a lien, the medical provider was required to first bill Medicare and her supplemental insurer, Blue Cross Blue Shield. Kioutas asserted NorthShore violated the Illinois Consumer Fraud and Deceptive Business Practices Act and committed breach of contract, by failing to bill Medicare before lodging the lien.
Kioutas wanted her class action to include anyone who had a similar experience with NorthShore between 2009 and 2019.
Judge Sophia Hall granted NorthShore's motion to dismiss the case in March 2021, saying NorthShore tried to bill Medicare, but Medicare refused to accept the invoice. Hall also pointed out NorthShore did not have to first bill Medicare before applying a lien, but could proceed straight ahead against the "primary payor," which in this case was insurer State Farm.
Kioutas failed to state a claim, Hall concluded.
On appeal, Justice Cunningham said Kioutas' suit was dead on arrival, because NorthShore had indeed first sent an invoice to Medicare.
"Her complaint did not state a claim since the invoice attached to the complaint directly disputed the claim made in the complaint," Cunningham noted.
Cunningham added that even if NorthShore had not attempted to bill Medicare before filing the lien, NorthShore was still in the clear based on the Illinois Lien Act.
"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," Cunningham observed.
Cunningham pointed out Kioutas did not argue NorthShore had no right to place a lien, but disputed when NorthShore could take such a step.
Kioutas has been represented by Chicago lawyers Larry D. Drury and John H. Alexander.
NorthShore has been defended by Winston & Strawn, of Chicago.