On July 26, 2024, CMS approved the plan of North Carolina Governor Roy Cooper and the North Carolina Department of Health and Human Services (NCDHHS) to use North Carolina’s Medicaid program to increase reimbursements to hospitals that forgive medical debts. The program would relieve as much as $4 billion in existing medical debt for families and individuals dating back to 2014, and it would also help prevent new debt in the future.
On July 1, 2024, Governor Cooper and NCDHHS announced that NCDHHS had submitted a request to CMS to approve the plan, which allows hospitals to elect whether to participate in the program and requires them to satisfy a set of conditions to be eligible for an increased amount of Medicaid funds. Hospitals that participate in the program and meet the eligibility conditions will receive higher reimbursement under the Healthcare Access and Stabilization Program (HASP), a federally funded program through CMS designed to bring hospital reimbursement rates in line with commercial insurer rates and the cost of providing care. Hospitals that elect not to participate in the program will receive base HASP payments.
To be eligible for enhanced HASP payments, hospitals that opt in to the program must do the following:
- Relieve all outstanding medical debt owed by current Medicaid enrollees, dating back to January 1, 2014;
- Relieve all medical debt deemed uncollectible dating back to Jan. 1, 2014, for any individuals not enrolled in Medicaid with incomes at or below at least 350% of the federal poverty level (FPL) or for whom total debt exceeds 5% of annual income;
- Relieve all unpaid medical debt dating back to January 1, 2014, for individuals who are enrolled in Medicaid;
- Provide discounts on medical bills of between 50-100% for patients with incomes at or below 300% FPL, with the amount of the discount varying based on the patient’s income;
- Automatically enroll people into financial assistance, known as charity care, by implementing a policy for presumptively determining individuals eligible for financial assistance through a streamlined screening and income validation approach;
- Not sell any medical debt for consumers with incomes at or below 300% FPL to debt collectors; and
- Not report a patient’s debt covered by these policies to a credit reporting agency.
In a press release, Governor Cooper indicated that the aim of the program is to provide debt relief for existing medical debt over the next two years.
Additional information is available in the Frequently Asked Questions on NCDHHS’s website
