An Illinois Senate committee is investigating claims that Advocate Health Care System uses predatory collection practices to get underinsured patients to pay overdue bills.
The Health and Human Services Committee, chaired by State Sen. Barack Obama, D-Chicago, said a recent report by the Service Employees International Union (SEIU) prompted the investigation. The panel--which also includes State Senators Jacqueline Collins, D-Chicago, and James Meeks, I-Calumet City--will hold an initial hearing Oct. 22 at the Thomson Center in downtown Chicago.
The report by SEIU's health care research and advocacy unit compares debt collection practices at Advocate's eight Chicago area hospitals with those of 51 other acute-care hospitals in the area. It highlights the stories of 18 patients, most of whom did not have adequate insurance coverage, who landed in the hospital with medical emergencies and became mired in debt and legal problems.
The report alleges Oak Brook-based Advocate "not only overcharges the uninsured, but also ruins their credit, aggressively pursues them in court, negotiates predatory payment agreements," and drives some to bankruptcy or homelessness, said Mr. Obama.
The senator is running for the U.S. Senate seat now held by Sen. Peter Fitzgerald, R-Ill.
According to SEIU's report, Advocate sues for uncollected bills three times more than other local hospitals, and seeks nearly twice as much money.
"It is deplorable that those with the least ability to pay are subject to strong-arm tactics," said Joseph Geevarghese, director of the SEIU's Hospital Accountability Project, which issued the report.
Advocate spokesman Ed Domansky defended the health system's collection practices, which he says are mandated by a federal law that requires a "diligent" effort be made to recover costs. If Advocate doesn't comply with those regulations, it will not be allowed to treat Medicare patients who make up roughly 50% of Advocate's total volume, he said.
The health care system outsources most of its bill collection services, and uses many of the same outsourcing companies as other private hospitals in the area. He declined to name the collection companies Advocate uses.
Mr. Domansky also said Advocate treats a higher volume of patients than other private hospitals in the Chicago area, which results in more lawsuits filed. Still, he said, the number is relatively low. Of the 1.6 million patients Advocate treated in 2001--the year on which SEIU's report is based--about 1,150 lawsuits were filed to collect debt.
This isn't the first time Advocate has been targeted in an SEIU report. In June, the union's Hospital Accountability Project published a study on what hospitals charge the uninsured and concluded Advocate patients are expected to pay more, sometimes more than twice as much, for the same services than those covered by private insurance.
Advocate defended its pricing, saying that under federal law it is required to charge uninsured patients the "sticker price" for health care. However, just a month after the report Advocate lowered prices at Illinois Masonic Medical Center--which the union called the "worst perpetrator of discriminatory pricing"--and offered a bigger discount for the poor.
In addition to Illinois Masonic, the Advocate chain includes Trinity Hospital and Bethany Hospital in Chicago; Christ Hospital in Oak Lawn; South Suburban Hospital in Hazel Crest; Lutheran General Hospital in Park Ridge; Good Samaritan Hospital in Downers Grove; and Good Shepherd Hospital in Barrington.
SEIU said it wants Advocate to stop suing poor patients for unpaid medical bills and allegedly offering high-interest loans and payment plans that drive those patients further into debt.