Advocate Health forgives medical debt linked to real estate liens

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Advocate Health, the nation's third-largest non-profit health system, will begin canceling all judgment liens previously placed on homes and real estate as part of its efforts to collect unpaid medical bills, and will also forgive the outstanding debts associated with those liens, the health system said this week.

The move is part of a multiyear initiative to overhaul the system's approach to medical debt, including its announcement in 2022 that it would no longer file lawsuits nor seek liens or judgments as part of its collection efforts.

WHAT'S THE IMPACT?

In total, Advocate Health plans to cancel more than 11,500 liens, some dating back 20 years or more.

The organization has also implemented other system-wide policy changes geared to address medical debt. To date, the system has stopped reporting delinquent medical debt to credit agencies, expanded its automatic financial assistance program for low-income and uninsured patients, and increased the charity care threshold to 300% of the federal poverty level – meaning, for example, that a family of four earning up to $93,600 qualifies automatically.

According to Advocate, 80% of patients who qualify for financial assistance are not required to validate their eligibility. More than 168,000 patients received 100% charity care last year, the system said.

Advocate Health operates under three primary care delivery brands: Advocate Health Care in Illinois; Atrium Health in the Carolinas, Georgia and Alabama; and Aurora Health Care in Wisconsin. The health system will reach out to individuals whose liens are being canceled, beginning with the oldest cases. It began making contact with affected patients and family members earlier this week. 

The system said the process of canceling liens will take time to complete, as it requires collaboration with attorneys and courts in each jurisdiction.

THE LARGER TREND

Last month, Advocate Health signed onto a statewide plan in North Carolina aimed at forgiving medical debt incurred over the past 10 years. The plan will set statewide standards for providing no-cost and discounted care to eligible individuals. 

The state is still working to finalize the program, which is expected to take effect sometime next year. Advocate Health will begin eliminating patient balances in accordance with the policies stipulated by the state at that time.

ON THE RECORD

"We believe our financial assistance program is now among the most generous in the nation and Advocate Health is committed to being part of the solution to address the medical debt dilemma so many people are facing today," said Advocate Health Chief Financial Officer Brad Clark. "The $6.05 billion we provided last year in community benefit further underscores our commitment."

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.