Accretive Health, Hospital Debt Collector, To Receive Millions In Tax Benefits In Chicago

Chicago To Give Aggressive Hospital Debt Collector Millions

Under an agreement approved by the City Council last year, Chicago is set to hand over $6 million in tax increment financing to Accretive Health, the hospital debt collector at the center of a growing row between Mayor Rahm Emanuel and Minnesota Attorney General Lori Swanson.

An Emanuel spokesman said Tuesday that the city has yet to turn over any of the money pledged under the agreement to Accretive Health. But a vocal critic of the way the city has used such "TIFs" said it was emblematic of the city's lack of transparency on such agreements.

Alderman Scott Waguespack voted for the TIF agreement in May 2011. But he says the city should be allowed to take developments like the news that Accretive is under investigation by Minnesota Attorney General Lori Swanson into account when it comes to dispersing the funds. He also says he was not aware of the company's practices -- which allegedly include stationing bill collectors at patients' bedsides -- until recent publicity about Swanson's lawsuit against the company.

"Unless you have time to dig into it yourself, it doesn't come out," Waguespack said.

"I don't see why people wouldn't be frustrated to see a company like this [receive money], if it's proven true that that's how they operate," he said. "Part of public policy is the moral compass of the city."

Over the next ten years, Accretive Health is supposed to train and hire 650 new, mostly entry-level employees to work in offices at 231 S. LaSalle Street. The jobs would average $35,506 in starting salary. Most of the positions, according to the agreement, "will primarily be business-to-business with little direct contact with individual patients."

In return, the city is supposed to turn over $4.6 million to the company for meeting hiring targets, and $1.3 million more for rehabilitating its LaSalle Street offices. The Department of Community Development noted in November 2011 that it was "the City's largest single TIF commitment for human capital development to date."

Accretive Health has also negotiated $1.42 million in tax and job training credits from the state of Illinois.

So far, said mayoral spokesman Tom Alexander, Accretive Health has not received any city money under the TIF program. The company has yet to turn in all the paperwork that would allow it to receive a "certificate of completion" kicking off its hiring requirements.

Jonathan Dedmon, an Accretive spokesman, said those documents would be coming soon. "We are proud to have actually exceeded our hiring target. We look forward to completing the final paperwork in the very near future," he said.

The company, which already has 150 employees in its Chicago headquarters, announced on Wednesday that its quarterly revenue had beaten market expectations.

Swanson has alleged that Accretive invaded patient privacy "to essentially monetize portions of the revenue and health care delivery systems of some nonprofit hospitals for Wall Street investors." The company has said that debt collection from patients makes up only a small part of its business, and that it is being unfairly targeted by Swanson.

Alexander said that Emanuel's pointed letter to Swanson last week asking her to go easy on Accretive was nothing out of the ordinary.

"He would do this on behalf of any constituent who he felt was not being treated fairly," he said. "They haven't been given fair treatment by her office, because they are working to resolve these issues which are related to a very small portion of their business."

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