REPORT: NC hospitals claim Medicare losses. Other records show millions in profits

State report claims up to 66% of hospitals profited from Medicare patients.
Data reported by the hospitals but on different forms to different government departments show the discrepancy.
Published: Oct. 25, 2022 at 5:14 PM EDT
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CHARLOTTE, N.C. (WBTV) - North Carolina’s biggest and most profitable hospitals are mostly non-profits. They claim that part of the help they provide to the community is by taking big financial losses on Medicare reimbursements. But a new report shows that many hospitals are actually making money off of Medicare, raising new questions about why the price you pay keeps rising.

For months, WBTV Investigative Reporter David Hodges has been reporting on how people who can afford it least often end up with the biggest consequences of rising medical bills.

Investigations have shown hundreds of lawsuits filed against patients for medical debt they can’t afford.

In South Carolina, hospital patients are sometimes having their tax refunds and wages garnished to pay for medical debts they didn’t even know about.

In North Carolina, lawsuits against patients often turn into liens against their homes, making it impossible to move without paying medical debt they can’t afford.

Throughout WBTV’s reporting hospitals have touted how much money they contribute in what’s called charity care, or community benefits. But those numbers often include write-offs for Medicare losses.

In response to WBTV’s previous reporting on lawsuits and collection practices of medical debt, Atrium Health has mentioned how much free and uncompensated care it offers, which includes hundreds of millions in what the hospital system claims is unreimbursed or unfunded costs from Medicare.

“They are misleading. It’s impossible to tell why their numbers are so different,” Rice University’s Vivian Ho said.

Tuesday morning, officials from the North Carolina Treasurer’s Office, the NC State Health Plan, Rice University and the University of Southern California, unveiled a new report disputing North Carolina hospitals’ reported Medicare losses.

Data reported by the hospitals but on different forms to different government departments show the discrepancy.

The report finds that while Atrium reported Medicare losses of $640 million on one form, on another it claimed nearly $120 million in profit in 2019.

“The majority of North Carolina hospitals did not lose money on Medicare — they actually profited. Hospitals’ self-reported data show that up to 66% of hospitals profited off Medicare patients in North Carolina each year from 2015 through 2020,” the report found.

The number matters because it impacts how much you pay for health insurance and how much your employer charges you for that insurance.

“Literally there are millions of people who will never see a raise at their job because the premium cost next year for their employer will eat up any productivity,” USC’s Glenn Melnick said.

“Not only are employers and the state paying too much for their health insurance but it seems that the North Carolinians are losing out on community benefits that these non-profit hospitals should be contributing back to the public because of the tax breaks they receive,” Ho said.

North Carolina Treasurer Dale Folwell, says instead of community benefits, the money goes to growing bigger hospital systems, which he calls the cartel.

“Atrium Health, who is the biggest player of the cartel in North Carolina, has over $12 billion in the bank this morning. So these hospitals have lost their mission and turned into investment banking real estate development companies,” Folwell said.

In response to the report released Tuesday morning, a spokesperson for Atrium Health wrote in an email “it appears to be based on a completely false premise and, thus, incorrect conclusions.” The email from Atrium points at numerous filings that are not included in the report because they researchers didn’t have access to them.

Atrium also claimed it recorded losses from Medicare more recently than what was included in the report.

“Our most recent required filing of Medicare cost reports to the federal government clearly indicate that through the care that was provided at our hospital facilities in North Carolina, Atrium Health incurred unfunded costs of $85 million,” the spokesperson wrote in the email.