Report says North Carolina hospitals have profited millions on Medicare

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Published: Oct. 25, 2022 at 2:26 PM EDT
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RALEIGH, N.C. (WITN) - The North Carolina Department of the State Treasurer says hospitals in our state have made millions in profit on Medicare.

The State Health Plan and State Treasurer Dale Folwell released the report Tuesday that found “huge disparities” between the Medicare losses claimed by hospital executives and the numbers that hospitals reported to the federal government.

“This raises serious concerns over hospitals’ commitment to their patients and their charitable mission, and the steep costs passed on to the nearly 740,000 members of the State Health Plan,” the department says.

Folwell says hospital executives have justified their tax exemptions and their price inflation by claiming to lose billions on Medicare patients. North Carolina hospital lobbyists claimed they lost $3.1 billion on Medicare in 2020, but really, the hospitals made a total of $87 million in Medicare profits.

“The questionable loss claim was 3,670% larger than hospitals’ self-reported Medicare profits,” Folwell says.

The treasurer says North Carolina hospital systems got more than an estimated $1.8 billion in tax exemptions in 2020. In return, nonprofit hospitals are supposed to give benefits to the community, but past reports have exposed widespread failures in charity care that have exposed impoverished patients to million in medical debt.

Folwell says the state ranks as one of the most unaffordable and monopolistic states in the nation for health care, and that health care costs are crippling North Carolinians’ upward mobility.

“One in five families is in medical debt collections. The average worker now loses 20% of a paycheck to health care costs. State employees must work one week out of every month just to pay their family premium, and the State Health Plan is facing fiscal insolvency in less than three years unless costs are cut,” Folwell says.

WITN is told that on average, state hospitals charge 280% of Medicare rates, which forces patients and employers to pay thousands more for medical care. The report relies on Medicare Cost Report data.

The report found that North Carolina was in the top 10 states with the highest average hospital Medicare profit margins for years and that taxpayers are not getting a meaningful return for billions of dollars in tax breaks given to nonprofit hospitals in North Carolina.

We reached out to ECU Health for their reaction. Here is their response:

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