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‘Something doesn’t seem right:’ Illinois AG office to review suspicious Cottage Hospital bills

Galesburg Cottage Hospital closed in January 2022, and the building is now owned by OSF HealthCare. But people have been getting years-old bills in the mail from Cottage that are postmarked in Michigan.
Jane Carlson
Tri States Public Radio
Galesburg Cottage Hospital closed in January 2022, and the building is now owned by OSF HealthCare. But people have been getting years-old bills in the mail from Cottage that are postmarked in Michigan.

Medical bills received by Galesburg area residents in the past few weeks have a familiar logo – a striped cross with a small heart next to the words Galesburg Cottage Hospital.

And they’re signed “thank you from the staff” at Cottage Hospital.

But Cottage Hospital has no staff.

The once-thriving hospital at Kellogg and Losey streets closed on Jan. 8, 2022, as it was set to lose Medicaid and Medicare participation because of patient care violations.

Two months later, the Illinois Department of Public Health revoked the hospital’s license.

And a month after that, OSF HealthCare bought the building.

But years-old medical bills from Cottage are coming from somewhere.

No record of the claims
Vince Marolla was surprised to see that Cottage logo when he opened up his mailbox a few weeks ago.

It was printed in red on the outside of an envelope postmarked in Pontiac, Mich.

A bill with the Galesburg Cottage Hospital logo has an address in Pontiac, Michigan.

“When I opened it up and saw three bills, I was even more surprised,” Marolla said. “Because these bills are from August of 2021. I don’t even know if I had all of the services because there’s nothing on the bills telling me what they were.”

The total charges on the bills were for over $17,000 for three separate days of outpatient services. After account adjustments and insurance payments, Marolla owed around $2,200, according to the bill.

Another red flag for Marolla: what he owed on two of the bills was a very round number of exactly $500 each.

“Which would make absolutely no logical sense. By the time everything gets discounted for insurance and payments, that’s not an amount that would seem logical,” he said.

So Marolla called his insurance company – and they had no record of the claims.

Marolla worries others who have received the bills might not be as suspicious as him and are being taken advantage of.

“There’s a generation that gets a bill like this, looks at it, writes a check, and mails it in,” he said. “You get a bill, it looks official, and you don’t question it. You just pay it.”

More red flags
TSPR took a look at Marolla’s three bills along with one recently received by another area resident for outpatient services in September 2021.

A few things stand out.

The statement date on the bills is May 1, 2023, but they weren’t received until November.

The address listed on the envelope and the bill is 142 S. Johnson St. in Pontiac, Mich. There is no 142 S. Johnson St. in Pontiac, but there is a 142 S. Johnson Ave.

That address is an apartment building adjacent to Pontiac General Hospital.

And Pontiac General Hospital is owned by the Sharma family, which purchased Cottage Hospital as SBJ Group of Austin, Texas, in 2020.

The phone number listed on the bills has an Austin, Texas, area code. It’s the same number on the website for Cottage Hospital that people are supposed to call to request medical records or patient statements.

But no one answers.

A message says the mailbox is full -- and then the call is disconnected.

Billing problems
Insurance companies have timely filing limits. It varies by company anywhere from 90 to 365 days, but if providers want payment – they have to file claims within those limits.

That was another red flag for Marolla.

Documents obtained by TSPR indicate Cottage Hospital was not billing patients in August and September of 2021, because of problems with an electronic health record system implemented by CEO Sanjay Sharma earlier that year.

In a report from the Department of Health and Human Services dated Nov. 19, 2021, Cottage’s registered nurse abstractor told investigators the system would not allow employees to extract data.

“We can get a few raw numbers like the number of admissions, but nothing else,” the RN abstractor said. “We couldn’t even bill because the electronic health record couldn’t pull codes for billing. Oh yeah, and they fired all the coders.”

The same report shows 118 employees of Cottage Hospital had resigned or been fired in the previous six months.

File a complaint
State Rep. Dan Swanson, R-Alpha, heard from several constituents who got similar medical bills in their mailboxes in recent weeks.

“Something doesn’t seem right,” Swanson said. “We know Cottage Hospital closed in January of 2022 and they’re just now receiving bills.”

Swanson reached out to a contact at Illinois Attorney General Kwame Raoul’s office.

“They ran it through the AG staff and determined the best avenue of approach is for people to file a Health Care complaint within the AG’s office and they would do some further investigation,” Swanson said.

If you have received a statement or bill from Galesburg Cottage Hospital, you can file a complaint online. The Illinois Attorney General Health Care Bureau hotline is (877) 305-5145.

“When you file the complaint, also upload a copy of the documentation you received. The AG's staff will review and as appropriate, reach out to the hospital to mediate the claim,” Swanson said.

Tri States Public Radio produced this story.  TSPR relies on financial support from our readers and listeners in order to provide coverage of the issues that matter to west central Illinois, southeast Iowa, and northeast Missouri. As someone who values the content created by TSPR's news department please consider making a financial contribution.

Jane Carlson is TSPR's regional reporter.