Governor Roy Cooper of North Carolina announced a groundbreaking initiative where all eligible hospitals in the state have agreed to participate. This initiative aims to provide higher Medicaid payments to hospitals if they alleviate medical debt for low- and middle-income patients and establish measures to prevent future patients from incurring debt. The proposal, introduced six weeks ago by Cooper and State Health and Human Services Secretary Kody Kinsley, was submitted to federal Medicaid regulators to help nearly 2 million state residents eliminate around $4 billion in hospital debt.
At a news conference, Governor Cooper stated that all 99 qualifying hospitals, including major hospital systems in the state, have committed to this voluntary effort to eliminate medical debt for patients. The plan, approved by the Centers for Medicare and Medicaid Services, will build upon an existing Medicaid reimbursement program for acute-care, rural, and university-connected hospitals.
Changes to benefit consumers are set to begin in the coming months. By next July 1st, medical debt dating back to early 2014 for Medicaid enrollees will be eliminated. Furthermore, hospitals will gradually write off medical debt that is over two years old for non-enrollees with certain income thresholds or debts exceeding 5% of their annual income.
Hospitals will also implement future programs to deter medical debt, such as automatically enrolling eligible individuals in charity care programs by January 1st if they qualify for government aid programs. They will also adjust debt collection practices by refraining from reporting unpaid bills to credit agencies and capping interest rates on medical debts by July.
The initiative builds upon the Healthcare Access and Stabilization Program (HASP) approved by the General Assembly last year, which expanded Medicaid coverage to working adults. Hospitals participating in the HASP program will receive higher reimbursement rates by agreeing to the medical debt relief measures, potentially accessing an estimated $4 billion this fiscal year and $6.3 billion in the next.
Governor Cooper mentioned that although some hospitals initially had reservations about the medical debt effort, they eventually recognized the benefits to patients and communities and decided to participate. The North Carolina Healthcare Association expressed readiness to assist hospitals in implementing the debt relief program and addressing the underlying causes of medical debt to enhance access to affordable, high-quality care.
