A Publication of WTVP

In late January, Attorney General (AG) Lisa Madigan introduced two bills during the legislative session—House Bill 4999: Hospital Fair Billing and Collection Practices Act and House Bill 5000: Tax-Exempt Hospital Responsibility Act. The AG’s stated reasons for proposing this legislation were two-fold. She stated HB 5000 “will ensure that hospitals taking advantage of tax exemptions earn that privilege” and HB4999 “will require all tax-exempt and for profit Illinois Hospitals to avoid unfair aggressive and harassing tactics when seeking payment from patients.”

In reality, HB 4999 would restrict severely hospitals’ ability to bill any payer for a patient’s medical care, and HB 5000 would require nearly every hospital in Illinois to pay what is in effect a “tax” to the Illinois Attorney General’s Office. These two bills would alter dramatically how health care is provided in the State of Illinois, which is why the Illinois Hospital Association (IHA), the Illinois Catholic Hospital Association, the Metropolitan Chicago Healthcare Council, the editorial boards of most major newspapers, and our four area non-profit hospitals have opposed this legislation publicly.

According to IHA, the charity care mandates proposed in HB 5000 would cause 28 hospitals, which are already losing money, to lose an additional $158 million a year, as well as push an additional 45 hospitals into deficits. The impact on OSF Healthcare System would be $59 million annually. Ironically, HB 5000 will strain hospitals’ ability to meet the basic needs of the underserved members of the community, who are the very citizens the bill purports to assist.

In the spirit of cooperation, many health care leaders, including myself, have met with the AG’s staff to propose modifications to each bill to better accomplish the AG’s stated goals. We’ve also met with numerous legislators and their staffs to craft amendments that, again, would accomplish the AG’s stated goals and be acceptable to all of us involved in non-profit hospitals. Peoria area legislators, both Republican and Democrat, have been very supportive of our concerns and have assisted in delivering our message to the AG’s office.

Through the diligent and ingenious work of OSF Healthcare System Corporate Director of Legal Services Vance Parkhurst, an amended HB 4999 has been drafted that has the support of the health care community and most legislators. This amended HB 4999 extends reasonable protections for health care consumers and, hopefully, will be passed without any negative amendments. That’s the good news.

The bad news is the capital markets on Wall Street have reacted in a very strong, negative fashion to this proposed Illinois legislation. The major health care bond insurers generally have frozen their activity in Illinois, and major institutional health care bond buyers evidently are eliminating Illinois health care debt from their portfolios. The three major credit rating agencies are watching these developments on a daily basis and are prepared to take across-the-board negative action against all Illinois health care providers if anything like the proposed HB 5000 were to become law. Two major construction projects in the Chicago area, which were slated to begin early this spring, have been placed on hold due to the financing (via bond issues) being delayed. HB 5000 has to be modified substantially or defeated outright or the bond markets won’t look upon Illinois non-profit hospitals’ requests for major financing very favorably. That means either the interest rates will be much higher, or, worse than that, bond financing may not even be available. If the latter scenario becomes common, certainly the stated goals of the AG never will be achieved, and we’ll continue to grapple with the challenge of funding and providing health care for the uninsured because there will be fewer hospitals surviving to do so. IBI