North Carolina government is incentivizing hospitals to relieve patients of medical debt

RALEIGH, N.C. (AP) — North Carolina state government is seeking to rid potentially billions in medical debt from low- and middle-income residents by offering a financial carrot for hospitals to take unpaid bills off the books and to implement policies supporting future patients.

Democratic Gov. Roy Cooper’s administration unveiled Monday a plan it wants federal Medicaid regulators to approve that would allow roughly 100 hospitals that recently began receiving enhanced federal Medicaid reimbursement funds to get even more money.

But to qualify an acute-care, rural or university-connected hospital would have to voluntarily do away with patients’ medical debt going back ten years on current Medicaid enrollees — and on non-enrollees who make below certain incomes or whose debt exceeds 5% of their annual income.

Going forward, these hospitals also would have to help low- and middle-income patients — for example, those in a family of four making no more than $93,600 — by providing deep discounts on medical bills incurred. The hospitals would have to enroll people automatically in charity care programs and agree not to sell their debt to collectors or tell credit reporting agencies about unpaid bills. Interest rates on medical debt also would be capped.

Cooper said the plan has the potential to help 2 million people in the state get rid of $4 billion in debt, much of which hospitals are never going to recoup anyway.

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