CMS has approved North Carolina's plan to push hospitals to relieve $4 billion in medical debt for about 2 million low and middle-income people.
The state's health and human services department will now begin working with hospitals to implement the program, according to a July 29 news release from North Carolina Gov. Roy Cooper's office.
Each hospital can elect whether to participate in the program, according to the release. Hospitals that choose to meet the eligibility criteria, including medical debt relief, will receive 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 Jan. 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 Jan. 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.
The North Carolina Department of Health and Human Services is partnering with Undue Medical Debt — formerly RIP Medical Debt — to support participating hospitals and help them identify medical debt that is eligible for relief, according to the release.