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August 21, 2001

JUSTICE BYRNE delivered the opinion of the court:

Petitioners, Scott Richmond and Kristine Richmond, as theparents and next friends of their minor daughter, Blythe Richmond,appeal the trial court's judgment enforcing the hospital lien filedby respondent Copley Memorial Hospital for medical expenses Blytheincurred. On appeal, petitioners argue that the lien is voidbecause (1) the "Hospital Agreement" between Copley and petitioner's insurance policy administrator, respondent DreyerMedical Center (Dreyer), required Copley to file a claim withDreyer before seeking reimbursement from Blythe's estate, (2)section 2--8(a) of the Health Maintenance Organization Act (HMOAct) (215 ILCS 125/2--8(a) (West 1998)) prohibits Copley fromenforcing the lien, and (3) Copley's allegedly arbitrary filing ofa lien against Blythe's estate contravenes public policy. We agreewith petitioners' second argument, and we reverse and remand thecause with directions.

FACTS

Most of the facts of the case are undisputed. On September16, 1998, Scott Richmond was driving his car in which his 12-year-old daughter, Blythe, rode as a passenger. Another car, driven bydefendant, Delores Caban, struck Richmond's vehicle. Blythe andher father sustained personal injuries, and Blythe was treated atCopley, where she incurred $24,238 in medical expenses. At thetime of the accident, Blythe was covered by her parents' BlueCross/HMO Illinois health insurance policy, and petitioners hadtimely paid all premiums due. The policy, which was administeredby Dreyer, designated Copley as petitioners' "provider hospital." The parties dispute whether petitioners' policy covered the medicalservices Copley rendered, and the record does not reveal whetherthe trial court decided the issue.

At the time of the accident, Dreyer directed petitioners andother policyholders to use Copley's medical services, and, inexchange, Copley charged Dreyer reduced rates for the services. The Hospital Agreement set forth the procedure under which Copleywould seek reimbursement for covered medical expenses when thepolicyholder was negligently injured by a third party. Thecontract provides in relevant part:

"[Copley] and [Dreyer] mutually agree to cooperate in theeffective implementation of those provisions of [Dreyer's]contracts with Managed Care Organizations relating tocoordination of benefits and other third party claims. Withregard to Covered Services for which [Dreyer] is not the partywith primary liability, [Copley] shall seek payment for suchservices from the party with primary liability. For CoveredServices for which [Dreyer] has secondary liability pursuantto the coordination of benefits provisions, it is understoodthat [Dreyer's] secondary liability is limited to the amountof payment it would have made to [Copley] had [Dreyer] beenprimary, less payment made by the primary insurer and any co-payment payable by member.

* * *

For covered services for which a Third-Party has primaryresponsibility, [Dreyer] and [Copley] agree to pursue claimsfirst with Third-Party insurer and hold patient harmless untilsettlement of the liability. [Dreyer] agrees to thenreimbursement [sic] [Copley] the difference between the amount[Copley] has independently recovered and the amount owed underthis agreement, if any."

Petitioners sued Caban and the owner of the vehicle that shedrove, and the complaint purportedly assigned to Blythepetitioners' right to collect and recover damages for her medicalexpenses. The parties voluntarily dismissed the owner of the car,and Caban's automobile insurer settled Blythe's claim for $50,000,which was the limit of Caban's policy.

Pursuant to section 1 of the Hospital Lien Act (Lien Act) (770ILCS 35/1 (West 1998)), Copley and Dreyer each filed a lien againstthe settlement proceeds. On September 16, 1999, petitioners fileda motion to adjudicate the liens, arguing that Copley's refusal tosubmit a claim to Dreyer for Blythe's medical expenses was a bad-faith attempt to circumvent the rule that this court had recentlyannounced in N.C. v. A.W., 305 Ill. App. 3d 773 (1999). In N.C.,this court held that a hospital may not assert lien rights in aminor's estate if the minor's insurer has already reimbursed thehospital for the medical services rendered. N.C., 305 Ill. App. 3dat 775. Petitioners alternatively argued that the rule prohibitingan insurer from filing a lien against a minor's personal injurysettlement also barred Copley's hospital lien.

Copley responded that its lien rights in Blythe's estate werepreserved because Dreyer had not reimbursed Copley for Blythe'smedical expenses. The trial court enforced Copley's lien andawarded the hospital $16,667, representing one-third of the $50,000settlement. The court extinguished Dreyer's lien, and Dreyer isnot a party to this timely appeal.

ANALYSIS

A lien is a legal claim upon the property of another forpayment or in satisfaction of a debt. A lien attaches only to averdict, judgment, award settlement, or compromise secured by or onbehalf of the injured person, and a hospital lien can be createdonly when a recovery is made. N.C., 305 Ill. App. 3d at 775. Whenan injured person settles a claim, the total amount of all hospitalliens filed under the Lien Act shall not exceed one-third of thesettlement. 770 ILCS 35/1 (West 1998)).

In N.C., the minor plaintiff was injured in an automobileaccident, and he incurred $22,551 in medical expenses when he wastreated by the hospital. Pursuant to an agreement with thehospital, the plaintiff's insurer tendered $4,200 to the hospitalin full payment of the medical expenses. The plaintiff sued thedefendant driver, and the hospital filed a lien against theproceeds of the pending personal injury suit. N.C., 305 Ill. App.3d at 774.

Under the hospital's contract with the plaintiff's insurer,the insurer encouraged its policyholders to use the hospital, andthe hospital billed the insurer at reduced rates. The providercontract further released a policyholder, such as the plaintiff,from liability for uncovered expenses after the insurer paid thehospital at the agreed rate. The hospital was authorized to billa policyholder only for deductibles, coinsurance, copayments, andcharges for services that were not approved or covered. N.C., 305Ill. App. 3d at 775.

After the plaintiff filed a petition to adjudicate thehospital's lien, the defendant driver's liability carrier settledthe plaintiff's claim for the policy limit of $100,000. The trialcourt extinguished the hospital's lien against the settlementproceeds, concluding that there was no debt for which the hospitalcould seek recovery. In affirming the judgment, this court agreedthat the hospital's lien was void because the plaintiff's debt tothe hospital was satisfied when the plaintiff's insurer paid thehospital. Because the hospital bargained for and assented to thereduced rate in exchange for the insurer's referrals, we rejectedthe hospital's claim that the result was inequitable. N.C., 305Ill. App. 3d at 776.

Contrary to Copley's denials, the evidence suggests that, ifCopley had submitted a claim under petitioner's health insurancepolicy, the Hospital Agreement would have obligated Dreyer to payCopley an amount less than one-third of Blythe's settlementproceeds. It is clear that Copley attempted to maximize itsrecovery by filing a lien against Blythe's settlement proceedsrather than billing Dreyer for the child's medical expenses.

Petitioners argue that the Hospital Agreement required Copleyto bill Dreyer before filing a lien against Blythe's estate. Thecontract provided that Copley would pursue its claim againstCaban's insurer and hold petitioners harmless for the medicalexpenses until petitioners' claim was settled. After petitionerssettled Blythe's claim against Caban, the Hospital Agreementobligated Dreyer to reimburse Copley for the difference between theamount due under the agreement and the amount Copley recovered fromCaban and her insurer.

Under the Hospital Agreement, Copley had a right toreimbursement from Dreyer for Blythe's medical costs afterpetitioners settled Caban's liability. However, nothing in theportion of the Hospital Agreement that the parties have submittedto this court suggests that Copley was obligated to bill Dreyer. Furthermore, petitioners offer no evidence and do not argue thatBlythe's admission to the hospital was conditioned on a promisethat Copley would bill Dreyer.

Petitioners complain that Copley has not supplied this courtwith the complete Hospital Agreement. However, as appellants,petitioners have the burden to present a sufficiently completerecord to support a claim of error, and, in the absence of such arecord on appeal, we will presume that the trial court's order wasin conformity with the law and had a factual basis. See Foutch v.O'Bryant, 99 Ill. 2d 389, 391-92 (1984). Any doubts that arisefrom the incompleteness of the record will be resolved against theappellant. Foutch, 99 Ill. 2d at 392.

Although we conclude that the Hospital Agreement did notrequire Copley to bill Dreyer, our analysis does not end there. Petitioners contend that section 2--8(a) of the HMO Act bars theenforcement of Copley's hospital lien against Blythe's estate. Section 2--8(a) incorporates a "hold-harmless" clause into everyHMO-medical provider agreement. The clause states as follows:

" 'The provider agrees that in no event, including but notlimited to nonpayment by the organization of amounts due thehospital provider under this contract, insolvency of theorganization or any breach of this contract by theorganization, shall the hospital provider or its assignees orsubcontractors have a right to seek any type of payment from,bill, charge, collect a deposit from, or have any recourseagainst, the enrollee, persons acting on the enrollee's behalf(other than the organization), the employer or group contractholder for services provided pursuant to this contract exceptfor the payment of applicable co-payments or deductibles forservices covered by the organization or fees for services notcovered by the organization.' " 215 ILCS 125/2--8(a) (West1998).

The parties agree that Blythe was an "enrollee" and that theHospital Agreement incorporated the hold-harmless clause. However,petitioners argue that section 2--8(a) bars Copley's lien because the lien was not filed to recover either (1) a copayment ordeductible for services covered by petitioners' policy or (2) feesfor uncovered services. Copley responds that it filed the lien torecover fees for allegedly noncovered medical services. Copleyessentially argues that, because Copley did not file a claim withDreyer for reimbursement under the Hospital Agreement, petitioners'policy did not cover the medical services rendered.

In construing a statute, a court must ascertain and giveeffect to the legislature's intent in enacting the statute. Wheretwo legislative enactments allegedly conflict, this court has aduty to construe those statutes in a manner that avoids aninconsistency and gives effect to both enactments, if such aconstruction is reasonably possible. The legislature is presumedto have intended that statutes relating to a single subject andcontrolled by a single policy will be consistent and harmonious,and any apparent conflicts between two such statutes will bereconciled if possible. Chavda v. Wolak, 188 Ill. 2d 394, 402(1999).

Copley contends that if we were to adopt petitioners'interpretation of section 1 of the Lien Act and section 2--8(a) ofthe HMO Act, the hold-harmless clause would invalidate all hospitalliens. We disagree. The relevant sections of the Lien Act and theHMO Act can be construed to give effect to both enactments whileavoiding any alleged inconsistency.

Our supreme court has held that a hospital lien may attach tomoney paid or due to the estate of a minor who settles a personalinjury claim. In re Estate of Cooper, 125 Ill. 2d 363, 369 (West1988). Although Cooper is instructive, the case does not controlthe outcome here because it did not address the hold-harmlessclause of section 2--8(a) of the HMO Act.

We hold that section 1 of the Lien Act permitted Copley tofile a lien against Blythe's estate. See 770 ILCS 35/1 (West1998); Cooper, 125 Ill. 2d at 369. However, under section 2--8(a)of the HMO Act, Copley had no right to "any recourse" againstBlythe or her parents except for (1) applicable co-payments ordeductibles for the medical services covered by petitioners' policyor (2) fees for services not covered by the policy. We concludethat the hold harmless clause of section 2--8(a) invalidates ahospital lien unless the lien has been filed to recover payment forone of the exceptions contained in the clause. Therefore, ifCopley's lien was filed to recover for either (1) co-payments ordeductibles for covered services or (2) fees for noncoveredservices, the lien is not void.

The record does not reveal whether the trial court decided thequestions of whether petitioners' policy covered the medicalservices Copley rendered or whether petitioners paid the deductibleas the policy required. Therefore, we remand the cause and directthe trial court to make a finding on these issues and to applysection 2--8(a) of the HMO Act in deciding whether Copley's lienshould be enforced.

Because our analysis of the HMO Act disposes of this case, weneed not address petitioners' remaining arguments.

For these reasons, the judgment of the circuit court of KaneCounty is reversed, and the cause is remanded with directions.

Reversed and remanded with directions.

HUTCHINSON, P.J., and BOWMAN, J., concur.