Barry v. St. Mary's Hospital Decatur
2016 IL App (4th) 150961
| Ill. App. Ct. | 2016Background
- In Sept. 2013 Stephan Barry was treated at St. Mary’s Hospital after an automobile accident; three hospital bills resulted. Two bills were submitted to Barry’s employer-insurer (Consociate) and initially denied; a third bill was not submitted.
- St. Mary’s filed liens under the Health Care Services Lien Act (Lien Act) against any personal-injury recovery for the full (nondiscounted) amounts of all three bills.
- After Barry sued, Consociate paid the two submitted bills at the contractual discounted rates; those liens remain recorded though St. Mary’s concedes it will not enforce them.
- Barry filed a seven-count complaint (Consumer Fraud Act, breach of contract, third-party beneficiary, unjust enrichment, tort of outrage, interference, and injunctive relief), alleging St. Mary’s was required to bill Consociate and improperly placed liens for full amounts.
- The trial court dismissed the complaint with prejudice under section 2-615, relying on this court’s Rogalla decision; Barry appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether St. Mary’s was required to bill Barry’s insurer before filing a lien | Barry: Facility Agreement/consent implied hospital must bill insurer before lien | St. Mary’s: Lien Act authorizes liens and Facility Agreement permits seeking third-party recovery first | Held: No statutory or contractual duty to bill insurer first; Lien Act permits liens against claims regardless of insurer status |
| Whether liens for two bills survive after insurer paid discounted amounts | Barry: Paid insurer should extinguish liens, so harm remains from recorded liens | St. Mary’s: Liens were proper when filed; payments resolved amounts due | Held: Once insurer paid the discounted debt, liens for those two bills cannot be maintained and should be withdrawn or adjudicated extinguished |
| Consumer Fraud Act claim (fraud/deceptive practice) | Barry: Concealment of policy to lien at full amounts and failure to disclose discount availability was deceptive | St. Mary’s: Filing liens and collection conduct are authorized by statute/contract; not deceptive | Held: Dismissed — consumer fraud claim barred as actions were authorized by the Lien Act and complaint did not plead requisite particularized deception |
| Contract / third-party beneficiary / unjust enrichment claims | Barry: Consent form and Facility Agreement made him an intended beneficiary and created billing obligations; continued liens would unjustly enrich St. Mary’s | St. Mary’s: Consent only authorizes billing; Facility Agreement disclaims third-party beneficiaries and allows pursuit of third-party recovery; no unjust enrichment | Held: Dismissed — consent form did not obligate hospital to bill first; Facility Agreement expressly disclaims beneficiary rights; unjust enrichment not shown because services value supports lien for unpaid third bill and paid bills extinguished debt |
Key Cases Cited
- Rogalla v. Christie Clinic, P.C., 341 Ill. App. 3d 410 (Ill. App. Ct.) (provider may assert statutory lien against plaintiff’s recovery despite HMO discount/hold-harmless clause)
- N.C. v. A.W., 305 Ill. App. 3d 773 (Ill. App. Ct.) (where insurer paid discounted amount under contract extinguishing patient’s debt, hospital lien is extinguished)
- Lopez v. Morley, 352 Ill. App. 3d 1174 (Ill. App. Ct.) (reaffirming rule that contractual payment by insurer can eliminate hospital lien rights)
- HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill. 2d 145 (Ill.) (framework for unjust enrichment when benefit passed from third party to defendant and when retention is unjust)