Can cash coax hospitals to erase medical debt?
Plus: SouthPark rezoning would allow nearly 1,000 homes near Barclay Downs; Median home sale price approaches $500,000; Court decision upholds red-light cameras; Roy Cooper for VP?
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N.C. health officials propose dangling money in front of Atrium and Novant to help low-income patients; 1 in 5 N.C. residents has medical debt in collections
by Michelle Crouch
Co-published with N.C. Health News
Charlotte’s big hospital systems made headlines last year when they refused to work with a national nonprofit dedicated to erasing old medical debt for low-income patients.
Now, Gov. Roy Cooper and state health officials want to entice Atrium Health, Novant Health and other N.C. hospitals to take action by offering them cold, hard cash.
Under a plan unveiled earlier this month, the state’s Department of Health and Human Services would offer extra federal money to hospitals that take specific steps to ease medical debt for low-income patients, including forgiving old medical debt dating back to 2014.
To get the money, hospitals would also have to abide by other conditions, such as offering discounts ranging from 50% to 100% to those patients, capping interest rates on hospital-held medical debt at 3% and agreeing not to report medical debt to credit agencies.
The program aims to address a growing medical debt crisis in North Carolina, where one out of five N.C. residents has medical debt in collections — making the state fourth-worst in the nation.
‘Positive reception’ from federal government: The program, believed to be the first of its kind nationwide, is awaiting approval from the federal agency that oversees Medicaid and Medicare.
DHHS Chief of Staff Jonathan Kappler told The Ledger on Thursday he expects to hear back “within weeks,” and the proposal has received a “positive reception” from federal officials.
“It has engendered a lot of excitement across the state and, frankly, across the country and has captured people’s imaginations about what is possible,” he said. “We are riding that energy and enthusiasm and working hard to try and get this locked in.”
The program would be paid for by new federal dollars coming to North Carolina because the state shifted to Medicaid managed care.
It would mean millions of extra dollars for hospitals that choose to participate.
Kappler said the department has received feedback and questions from hospitals across the state, including from Atrium and Novant. He declined to share specifics.
Hospitals are noncommittal: In statements released immediately after the program was announced, Atrium and Novant said they were reviewing the proposal and hadn’t decided yet if they would participate.
Both hospitals noted that parts of their current financial assistance policies already meet or exceed some of the state’s proposed requirements.
For example, Atrium offers discounts to patients at or below 400% of the federal poverty level, while the state would require discounts for those with incomes at or below 300% of the federal poverty level.
“While we will be reviewing the details of the proposal, it’s worth noting Atrium Health has proactively addressed many of the items in the plan and currently offers one of the most generous financial assistance and charity care plans in the state,” Atrium said.
And Novant’s statement had this line: “We have industry-leading policies against predatory debt collection practices and are proud to offer one of the best financial assistance policies in North Carolina and the country that is significantly more robust than the state’s proposal.”
How old medical debt would be forgiven: Hospitals that participate in the DHHS program would be required to work with Undue Medical Debt — formerly known as RIP Medical Debt— a national nonprofit that forgives medical debt for people living below the poverty line.
The organization buys old medical debt for pennies on the dollar, and then sends patients letters forgiving it. It has erased more than $11 billion in medical debt across the country.
Earlier this year, retired Atrium Health physician Chris Lakin launched an unsuccessful public campaign to encourage both Novant and Atrium to work with Undue.
At the time, the hospitals said they already had generous financial assistance and charity care policies to serve patients.
On Thursday, Lakin said he was thrilled to hear that the state proposal would offer a financial incentive to get Atrium and Novant to work with Undue.
“My first hope was that the hospitals would do this voluntarily, because I see it as a win-win for patients and hospitals,” Lakin said. “But I understand that money talks.”
➡️ Read more about the state’s proposal and the specific policies it would require N.C. hospitals to adopt at North Carolina Health News.
Michelle Crouch covers health care. Reach her at mcrouch@northcarolinahealthnews.org.
This article is part of a partnership between The Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area. We make these articles available free to all. For more information, or to support this effort with a tax-free gift, click here.
Related Ledger/N.C. Health News articles:
“Charlotte hospitals say ‘no thanks’ to charity’s efforts to reduce medical debt” (Dec. 11, 2023)
“Charlotte leaders urge Atrium to consider new approach on medical debt” (Jan. 29, 2024)
SouthPark rezoning proposal would allow nearly 1,000 apartments; Site backs up to $1.5M homes in Barclay Downs
Developer Childress Klein is proposing to redevelop a mostly vacant office building in SouthPark’s corporate-office corridor into as many as 975 apartments.