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Legal Memorandum: Settlement of Medical Claims in IN

Issue: Can an Indiana hospital elect to pursue a state statutory hospital lien on some claims while still retaining the right to pursue Medicare on other claims?

Area of Law: Government Programs and Benefits, Healthcare & Pharmaceutical Law Compliance, Litigation & Procedure
Keywords: Bright-line election approach; Hospital lien on claims; Right to pursue Medicare
Jurisdiction: Indiana
Cited Cases: 750 N.E.2d 384; 78 P.3d 798; 598 F. Supp. 1017
Cited Statutes: None
Date: 03/01/2005

There are no cases that directly address whether a medical provider or supplier can elect to pursue a statutory hospital lien on some claims while still retaining the right to pursue Medicare on other claims.  However, the following cases provide some limited guidance on this issue.

In Rose v. Via Christi Health System, Inc., 78 P.3d 798 (Kan. 2003), a hospital elected to bill its patient and his insurer, Medicare, for the cost of his treatment.  Medicare paid for the cost of treatment without objection, but Medicare pays only approximately one-third of the billed amount.  In accordance with the hospital’s contract with Medicare, the hospital was required to write off the remaining two-thirds of the bill.  When the patient sued the hospital for negligence and recovered a judgment, the hospital filed a motion seeking to offset the judgment by the medical expenses it had written off.  Id. at 800.

The Supreme Court of Kansas cited the Illinois case of Holle v. Moline Public Hospital, 598 F. Supp. 1017 (C.D. Ill. 1984), for its conclusion that a hospital is bound by its agreement with Medicare not to charge any other person for the items or services for which a person is entitled to Medicare payment.  The Rose court then concluded that the Medicare statute prohibits health care providers from charging Medicare-qualified patients for items or services that are covered by Medicare.  Id., 78 P.3d at 802.  The court further observed that […]

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