The country’s third-largest nonprofit health system announced Thursday it will strike all judgment liens on patients’ homes and real estate as well as eliminate the associated outstanding debts for unpaid medical care.
Advocate Health had ceased suing patients for unpaid medical bills in 2022, the same year it formed via the megamerger of Advocate Aurora Health and Atrium Health.
Ending and unwinding aggressive debt collection practices such as liens or court judgements helps improve access and affordability of care, the system said.
It’s also a safe political move for the organization, as prominent lawmakers and policy groups have recently taken a harder look at collection practices and calling these systems’ tax-exempt status into question.
“When we expanded our charity care policy, we immediately began assessing all previous outstanding liens and determined that most of those patients would qualify under our new policy,” Brad Clark, chief financial officer of Advocate Health, said in the announcement. “As the next step in our roadmap to make care more affordable, we are accelerating this process and removing judgment liens that were placed on homes and property to cover unpaid medical bills.”
Advocate said it plans to cancel more than 11,500 liens, some of which have stood for more than 20 years. The system plans to start with its oldest cases and work backward over the coming months. It will reach out to those that qualify as their case comes up for resolution but warned the process will take time “as it requires collaboration with attorneys and courts in each jurisdiction,” the system said.
Advocate—which spans 69 hospitals, reported $31.75 billion in total 2023 operating revenue and logs more than 33.4 million patient encounters per year—directly attributed its ability to waive the liens and debt to the “organizational strength created by the health systems combining to form Advocate Health.”
“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,” Clark said. “The $6.05 billion we provided last year in community benefit further underscores our commitment.”
With its 2022 policy changes, Advocate said it no longer reports delinquent medical debt to credit agencies and has a charity care threshold of 300% the federal poverty level.
Separately, its Atrium Health brand will be participating in a North Carolina program to forgive a decade of medical debt and set standards for discounted or fully covered charity care. The program is still being finalized, though North Carolina—where pre-merger Atrium Health had led the pack for patient lawsuits—said it has secured participation commitments from every hospital in the state.
The Biden administration has taken steps to remove medical debt from credit scores nationwide. On the other hand, a working paper published earlier this year threw some cold water on the practice of forgiving medical debt when it found near-negligible changes in credit, no improvements in financial well-being and even signs of worsened mental health among those with the most debts.