Groups line up against plaintiffs' windfall bill

Ann Knef Mar. 29, 2006, 4:58am

Ed Murnane

Jay Hoffman

A legislative proposal designed to provide windfall recovery to plaintiffs in personal injury litigation is an "affront to fairness," said the president of the Illinois Civil Justice League, Ed Murnane.

Murnane and critics from the medical, business and insurance arenas hope to crush the measure currently making its way through the state legislature.

State Rep. Jay Hoffman (D-Collinsville), a member attorney of the Lakin Law Firm in Wood River, is the Illinois House sponsor of SB1911. He drove the bill through a House committee with an amendment that allows a plaintiff to recover damages for the amount of medical bills billed rather than the amount actually paid to health care providers.

Payment of claims are generally reduced for a variety of reasons including pre-existing contractual agreements and legally-imposed discounts such as Medicaid, Murnane said.

He said it was "hard to imagine" the bill passing, even in a "trial lawyer-friendly" legislature.

"It's clearly a money grab by trial lawyers," Murnane said. "Trial lawyers are trying to cut losses they think they suffered as a result of the medical malpractice bill by creating a bogus payment system."

On Monday, the bill moved to second reading on the House floor. Last week, Hoffman's amendment passed in the Illinois House Judiciary I Committee along party lines, 8-6, on the day it was filed, March 23.

Murnane said the measure would have far reaching effects, including increased health care costs and increased costs for consumers of all types of insurance.

"Jay Hoffman ought to be ashamed," said Murnane. "His constitutents ought to take him to task."

Edwardsville defense attorney Jeff Hebrank said the bill's sponsors who promote it as a means of freeing doctors from having to testify to the reasonableness of treatment costs are "disingenuous."

Hebrank, of Burroughs, Hepler, Broom, MacDonald, Hebrank & True, is the first vice president of the Illinois Association of Defense Trial Counsel.

He said it guarantees windfall for plaintiffs while not allowing defendants in a tort action the right to contest the reasonableness of a stated charge.

In a letter to legislators, Hebrank wrote, "Perhaps most troubling of all, this legislation disregards the primary purpose for adoption of the 'collateral source' rule in the first place. The rule was originally adopted to prevent juries from being prejudiced by evidence that the plaintiff had already been paid for his medical services by a health insurer, when the plaintiff had a duty to repay the health insurer's lien from the tort judgment."

The Illinois Manufacturers Association, Illinois State Medical Society and Illinois Insurance Association also are taking strong positions against the bill.

"If this were to pass it would open up a lot of additional costs in increased rates and premiums," said Kevin Martin, executive director of the Illinois Insurance Association. "We're very much opposed."

In Hebrank's open letter to legislators, he provides examples of the bill's effect if enacted:

Example 1:
Plaintiff receives medical services for a broken leg at a local hospital. The plaintiff was injured while working as an employee of Caterpillar, which provided him with group health insurance. Plaintiff is injured when defendant's car crosses the road and strikes the Caterpillar van in which he was riding.

The hospital has signed a contract with Caterpillar to reduce its bill by 75% and not recover any further sums from the plaintiff. The hospital sends a "list" bill for $100,000 to Caterpillar, and marks the bill fully paid when receiving $25,000 from Caterpillar. Caterpillar sends a lien notice to plaintiff's lawyer for $25,000.

Plaintiff's lawyer submits the full $100,000 "list" bill to the jury, keeping the jury wholly in the dark regarding the actual lien amount to be repaid Caterpillar. Defense counsel is forbidden to contest the reasonableness of the medical bill. Jury awards plaintiff $100,000 in past medical expenses and $400,000 in pain and suffering and loss of normal life. Plaintiff pockets $75,000 as a windfall, since he was only required to pay $25,000 of the medical expense award to Caterpillar.

Example 2:
Plaintiff receives medical services at Shriner's Hospital after an auto accident with defendant. Shriner's does not bill its patients for services. Plaintiff's counsel solicits a list bill from Shriner's or another doctor for $100,000 and submits the list bill to the jury.

The defendant is forbidden by the new legislation to introduce any evidence that plaintiff does not owe Shriner's any payment from any tort judgment recovered in the lawsuit. Jury awards plaintiff $100,000 in medical expenses and $400,000 in pain and suffering and loss of normal life.

Plaintiff pockets the $100,000 windfall without any obligation to make a charitable contribution to Shriner's.

Example 3:
Plaintiff receives a $10,000 medical expenses payment from defendant's insurer under the medical payments term of the defendant's auto policy.

Since this payment was not received as an "advance on liability", but is paid without regard to fault, plaintiff is not obligated under the legislation to pay either defendant or his insurer back when a $100,000 judgment is obtained from defendant in a civil lawsuit.

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