From 28th to 2nd: New bill would make NC near best nationwide at protecting patients from medical debt collection

CHARLOTTE, N.C. (WBTV) - A new bill in the North Carolina General Assembly would make the Tar Heel State one of the best in the nation at protecting patients from crippling medical bills and predatory debt collection.

Lawmakers are taking action after a months-long WBTV investigation spotlighting the impact medical debt can have on people’s lives. The new Medical Debt De-Weaponization Act would alleviate some of the problems uncovered by WBTV, but the lobbying group for North Carolina hospitals claims that aspects of the bill are ‘political grandstanding.’

State Representative Ed Goodwin is one of the sponsors of the bi-partisan Medical Debt De-Weaponization Act. The new bill would require hospitals to offer screening of patients for charity care, mandate free coverage for patients at 200% of the federal poverty level and prevent hospitals from foreclosing on patients’ homes or garnishing their wages.

Goodwin says he thinks about those patients when taking care of his mother.

“My mom has had cancer five times,” Rep Goodwin said holding back tears.

“And just think about it. If we couldn’t come up with the money to pay insurance or pay the hospital, what’s going to happen to my momma?”

The bill is sponsored by 45 NCGA representatives including the majority and minority leaders of both parties.

“This is not a Democrat, Republican, unaffiliated issue. This is a moral issue,” NC State Treasurer Dale Folwell said.

State Treasurer Dale Folwell has been fighting to reform the medical billing system for years.

“This is a product that people would rather not consume when they try to inquire what it costs or told us no other dang business, and when they don’t pay that bill, they get punished and their credit scores get weaponized,” Folwell said.

In a statement, the lobbying group for North Carolina hospitals, the North Carolina Healthcare Association, wrote the organization had not taken a position on the bill yet but claimed “Through federal oversight by the Internal Revenue Service, it (charity care) is regulated, reported, and audited.”

But policy experts say the regulations on hospitals at the federal level are not as stringent as what’s found in many states.

Gabriela Elizondo-Craig is a post-graduate fellow at Innovation for Justice, which recently released a study ranking states based on their medical debt policies.

“The state level is where we can do a lot of immediate change,” Elizondo-Craig said.

North Carolina came in 28th in the rankings but Elizondo-Craig re-ran the calculations based on the provisions in the Medical Debt De-Weaponization Act. The bill would dramatically increase North Carolina’s ranking if it passes.

“North Carolina would jump up to second,” Elizondo-Craig said.

“That means there’s a lot of real-world consequences for people where they’re able to problem-solve their debt, they’re able to go about their lives.”

“So much potential here within just that bill,” Elizondo-Craig said.

North Carolina Attorney General Josh Stein’s office would be tasked with enforcing the law’s provisions and adopting rules to keep hospitals in compliance.

In a statement to WBTV, AG Stein wrote “HB 1039, which seeks to protect North Carolina health care consumers, is a good bill with several strong provisions setting minimum standards for charity care, requiring transparency of charity care policies and hospital pricing, and establishing limitations on certain billing and collection practices.”

Stein also said the bill should strengthen his office’s authority to enforce these types of consumer rules.

A spokesperson for NCHA took issue with the name of the bill, writing “To suggest that hospitals ‘weaponize’ medical debt is nothing but political grandstanding. Hospitals do more than any other part of the health care field to assist vulnerable patients.”

Rep Ed Goodwin said he believes more can still be done.

“Forget all the arguments, forget all the money,” Goodwin said.

“I would rather know that I saw the face of God one day and he said ‘thank you for saving that man’s life rather than him saying ‘I was ashamed of you when you walked by that man and let him die’.”

Entire Statement from NCHA

The North Carolina Healthcare Association is still analyzing this bill and hasn’t taken a position on it yet. An initial high-level take is that federal law already addresses several requirements in the bill and the North Carolina General Assembly passed legislation in 2013 that addresses many of the state-specific issues related to fair billing and collections practices.

North Carolina health systems and hospitals have millions of health care interactions with patients and families each year. They actively work with patients to help them understand their health care coverage and financial obligations. They try to make it easy for patients to connect to information about financial assistance and repayment options. Hospitals publish their financial assistance policies on their websites and typically have a variety of resources available to provide information and to answer patients’ questions, from onsite financial counselors to staffed call centers, virtual chat tools, and more.

In the event of an unpaid bill, the federal Internal Revenue Service has prescribed an extensive series of steps and wait times that hospitals must follow before taking any collection actions, which is a last resort. To suggest that hospitals ‘weaponize’ medical debt is nothing but political grandstanding. Hospitals do more than any other part of the health care field to assist vulnerable patients. Their doors are always open, regardless of a patient’s ability to pay. Hospitals’ charity care spending and community benefit investment activity is transparent and accountable. Through federal oversight by the Internal Revenue Service, it is regulated, reported, and audited. Enforcement is the responsibility of the United States Treasury. North Carolina’s nonprofit hospitals annually submit audits to state and federal tax regulators who determine that hospitals meet their tax status obligations. Non-compliance can result in a revocation of a hospital’s tax-exempt status, which has never happened in North Carolina.

When patients need financial assistance, making that happen is a two-way process. Under IRS rules, patients must provide financial information in order to be qualified.

Hospitals want to make all types of financial assistance and debt payment options they offer very convenient and easy for patients.

If you look at any hospital, you see a place filled with people who come to work for the set purpose of helping and healing others. Clinicians and hospital employees want to support patients’ well-being and provide a great patient experience. They appreciate customer feedback on how they can improve.

Entire statement from Attorney General Josh Stein

“Every North Carolinian should be able to get the health care they need without being overwhelmed by medical debt. HB 1039, which seeks to protect North Carolina health care consumers, is a good bill with several strong provisions setting minimum standards for charity care, requiring transparency of charity care policies and hospital pricing, and establishing limitations on certain billing and collection practices. The bill needs to be improved by strengthening my office’s authority to enforce this and other consumer protection laws against hospitals in violation. But our first conversation to address the burden on health care consumers must be about expanding Medicaid. That is the most important step we can take right now to protect people’s health and strengthen the delivery of health care in North Carolina.”

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