Federal Medicaid regulators have approved a groundbreaking proposal put forth by North Carolina Governor Roy Cooper’s administration to incentivize hospitals in the state to erase patients’ medical debt and implement strategies to prevent future liabilities. The Centers for Medicare and Medicaid Services gave the green light to the plan, initiated by the state Department of Health and Human Services, which focuses on providing financial incentives to hospitals to eliminate debt held by low- and middle-income patients and to assist residents in avoiding medical debt in the future.
The plan, lauded as a pioneering initiative in the country, aims to aid around 2 million low- and middle-income individuals in North Carolina in eradicating approximately $4 billion in medical debt. State Health and Human Services Secretary Kody Kinsley expressed that this debt relief program is a crucial step in enhancing the well-being of North Carolinians while also ensuring the financial sustainability of hospitals in the state. The proposal concentrates on offering increased Medicaid reimbursement payments to eligible hospitals through the Healthcare Access and Stabilization Program.
Under the program, approximately 100 hospitals in the state can receive higher levels of reimbursement if they choose to eliminate patients’ medical debts dating back to early 2014 for current Medicaid enrollees and individuals with specific income criteria. Additionally, these hospitals must provide significant discounts on medical bills for low- and middle-income patients, automatically enroll individuals in charity care programs, abstain from selling debts to collectors, and cap interest rates on medical debt. Future debt relief for individuals is anticipated to take place in 2025 and 2026.
While the initiative received praise from Vice President Kamala Harris, some hospitals initially showed resistance. However, Cooper mentioned that several hospitals have engaged in discussions and provided valuable input to optimize the procedures. The success and continuation of the program may depend on the outcome of the upcoming gubernatorial election, as Cooper’s term concludes in January. The effort mirrors actions taken by other states and cities utilizing federal funds to alleviate residents’ medical debt.
Vice President Harris commended North Carolina for its proactive approach in addressing medical debt, showcasing it as an example for other states to emulate. Harris emphasized the importance of forgiving medical debt and highlighted efforts made with President Joe Biden to alleviate significant amounts of medical debt nationwide.
