Outer Banks Health, Bertie Memorial Hospital and Sentara Albemarle Hospital are three of 99 North Carolina hospitals that signed on to a new state program this month to automatically forgive or relieve medical debt for some patients and adopt new policies dictating debt collection.
In exchange for their participation, hospitals will be eligible for higher Medicaid reimbursement payments from the state, which is using money from Medicaid expansion to cover higher payments to hospitals.
“Large medical bills from sickness or injury can cripple the finances of North Carolinians, particularly those who are already struggling,” North Carolina Gov. Roy Cooper said in a press release announcing the program in July.
“Freeing people from medical debt can be life changing for families, as well as boost the overall economic health of North Carolina.”
Cooper said hospitals spend millions of dollars a year to recoup only a fraction of payments patients owe them – contracting with debt collection agencies, taking patients to court and employing legal professionals to seize assets.
A 2023 study from Duke University researchers found that between 2017 and 2022, North Carolina hospitals filed just under 6,000 lawsuits against 7,517 patients to collect medical debt.
The study found interest and fees added to overdue bills totaled $20 million.
“Many people struggle with the burden of medical debt, which can cause them to hold off on getting the essential health care and services they need," said Kody Kinsley, North Carolina’s secretary of Health and Human Services.
"This debt relief program is another step toward improving the health and well-being of North Carolinians while supporting financial sustainability of our hospitals."
East Carolina University Health runs Bertie Memorial Hospital and Outer Banks Health. In a statement to WHRO, a spokesperson for the health system said they believe the medical debt relief program is in the best interest of their patient population, which is in “one of the most difficult rural markets in the nation, with a disproportionate number of community members who rely heavily on government payor sources like Medicare and Medicaid.”
The health system said it provides more than $200 million worth of uncompensated care every year throughout its network.
According to the Duke study, ECU Health’s hospitals in northeastern North Carolina didn’t file any judgments against patients for unpaid bills between 2017 and 2022.
