Illinois Appellate Court Determines Medical Expense “Write-offs” Do Not Qualify for Set-off
Harold Miller v. Sarah Bush Lincoln Health Center, et al., 2016 IL App (4th) 150728.
Adding to the ever-changing debate regarding how medical expenses “written off” by health care providers are treated by Illinois courts, the Fourth District Appellate Court recently reversed a trial court order that reduced a verdict in a medical malpractice case by the total amount of medical expenses the plaintiff’s medical providers had written off from the bills. In reaching its decision, the Appellate Court determined that medical expenses written off by medical providers do not qualify for a set-off under Section 2-1205 of the Illinois Code of Civil Procedure (735 ILCS 5/2-1205).
Section 2-1205 allows for a reduction in the amount of recovery in medical negligence actions in “[a]n amount equal to the sum of. . . 100% of the benefits provided for medical charges, hospital charges, or nursing or caretaking charges, which have been paid, or which have become payable to the injured person by any other person, corporation, insurance company or fund.” One exception to the right of reduction occurs when there is a right of recoupment “through subrogation, trust agreement, lien, or otherwise.” 735 ILCS 5/2-1205(2).
In Miller, the jury returned a verdict in favor of the plaintiff and awarded $638,347.91. Of that amount, $133,347.91 was itemized for medical expenses. The defendants filed a motion pursuant to Section 2-1205 seeking to reduce the jury’s verdict by $91,724.03, arguing that “because the medical bills awarded by the jury in its verdict total $133,347.91, and because there is no right of subrogation or recoupment of the portion of these bills equal to $91,724.03, Defendants request that judgment be entered on the verdict, with a set-off in that amount.” The trial court agreed with the defendants and entered an order reducing the jury’s verdict.
On appeal, the Court analyzed Section 2-1205 and determined that the plain language of the statute “shows it was only intended to apply if the benefits were paid to medical providers or had become payable by the plaintiff—and then only if other limitations do not apply.” The Court further held that the Illinois legislature did not intend Section 2-1205 to allow verdicts to be reduced by the amount of medical bills written off by health care providers. Rather, the statute “only allows a verdict to be reduced by the amount paid to the medical providers or payable to the plaintiff.” Because the amount the medical providers wrote off from their bills was never paid by anyone and had not become payable to the plaintiff, Section 2-1205 did not apply. The Court reversed the trial court’s order reducing the judgment and remanded the case with instructions to enter judgment in the full amount of the jury’s verdict.
In reaching its decision, the Court chose not to follow the Second District’s decision in Perkey v. Portes-Jarol, 2013 IL App (2d) 120470, which allowed a reduction in the judgment for the amount of expenses written off by medical providers. The Court distinguished the arguments raised in Perkey as “different” from the arguments raised in Miller. The Court specifically noted that the Second District did not analyze whether bills written off by medical providers qualify as benefits paid to the medical providers or payable to the plaintiff. The Perkey decision only dealt with whether the right to recoupment prevented a reduction in the judgment.
The Court did not address whether its holding applies to Section 2-1205.1 of the Code of Civil Procedure, which allows for a reduction in recovery for judgments in personal injury, wrongful death and property damage cases based on negligence or products liability.