North Carolina to boost Medicaid pay for hospitals that write off medical debt
By Alan Condon / July 2, 2024
Gov. Roy Cooper and the North Carolina Department of Health and Human Services are using the state's Medicaid program to push hospitals to relieve $4 billion in medical debt for about 2 million low and middle-income people.
The state department of health wants CMS to approve certain conditions hospitals must meet to be eligible for expanded Medicaid payments. The conditions include relieving existing medical debt and establishing policies to prevent the accumulation of medical debt for low- and middle-income North Carolina residents.
If approved by CMS, hospitals that implement medical debt relief and mitigation policies will be eligible for improved payments under the Healthcare Access and Stabilization Program. Hospitals that choose not to implement the policies will be eligible for HASP payments at a lower level.
These policies will provide relief to consumers by writing off existing debt, guarding against the accumulation of future medical debt and preventing problematic debt-collection practices. Hospitals will be required to implement the following policies as a condition of eligibility for enhanced HASP payments:
Relieve all medical debt deemed uncollectible dating back to January 1, 2014, for individuals not enrolled in Medicaid with incomes at least at or below 350% of the federal poverty level or for whom total debt exceeds 5% of annual income.
Relieve all unpaid medical debt dating back to January 1, 2014, for those enrolled in Medicaid.
Provide discounts on medical bills of between 50% to 100% for patients with incomes at or below 300% FPL. The discount amount will vary based on the patient's income.
Automatically enroll people into financial assistance by implementing a policy for presumptively determining individuals eligible for charity care through a screening approach.
Not sell any medical debt for consumers with incomes at or below 300% FPL to debt collectors.
Not report a patient's debt covered by these policies to a credit reporting agency.
While hospitals are not the only form of medical debt, they are the largest, according to the governor's office. North Carolina hospitals hold an estimated total of $4 billion of debt and often expect to receive a small fraction of the original value through collections practices.