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In California, hospitals looking to collect on bills can’t garnishee wages or put liens on the homes where patients live.
In Texas, nonprofit hospitals are required to provide a certain amount of charity care.
In Washington state, hospitals must provide free or discounted care to indigent patients – and report to the state how much they spend to provide that treatment.
No such laws protect North Carolina’s patients.
An investigation by The News & Observer and The Charlotte Observer found that while North Carolina hospitals get tax breaks worth hundreds of millions, some are doing little to help the poor. Instead, many hospitals are pursuing uninsured patients with lawsuits or collections agencies that can destroy their credit.
Patient advocates say the state could be doing far more.
“North Carolina is not in good shape,” said Jessica Curtis, a hospital expert for Community Catalyst, a Boston group working to improve access to health care. “If you’re a consumer in North Carolina and you need free care, there’s nothing in the state law or the regulations that would protect you.”
The newspapers discussed what could be done with consumer advocates, industry experts and the N.C. Hospital Association. Following are seven proposals that advocates say would likely help North Carolina patients:
1. Require credit reporting agencies to remove medical debts from reports after the bill is paid.
U.S. Rep. Heath Shuler, a Waynesville Democrat, has introduced a bill to require credit reporting agencies to remove medical debts of less than $2,500 from credit reports 45 days after the balance goes to zero.
Mark Rukavina, executive director of The Access Project of Boston, which works to improve health care for the poor and uninsured, said: “Here you have people doing the right thing – paying off their bill – and it can hurt their credit for up to seven years It’s simply wrong that people can have their credit ruined simply because they got sick – and then paid their bill.”
Adam Linker, a policy analyst at the N.C. Health Access Coalition, says he doesn’t think Shuler’s bill goes far enough: “I don’t think medical debt should go on credit reports, period.”
2. Require hospitals to post their charity care policies in prominent places.
Jessica Curtis: “If they can send a bill, they can also send a note about financial assistance or charity care.”
3. Make it easier for patients to apply for charity care.
Adam Linker: “It’s not really charity care if you require that much reporting and make it that difficult.”
Other hospitals and hospital systems – including Novant Health – run soft credit checks on uninsured patients. Those checks do not affect a patient’s credit score, but do provide the hospitals enough financial information to determine whether they qualify for charity care. That means patients can get help without the burden of providing lots of documents.
4. Require North Carolina hospitals to report charity care spending to the state.
Patient advocates say better disclosure would likely encourage some hospitals to provide more financial help to uninsured patients.
Requiring hospitals to report the extent of their charitable spending isn’t a new idea. California, Connecticut and Illinois are among the nine states requiring that an accounting of charity care be made public.
5. Set state rules on who gets charity care.
Adam Searing, director of the N.C. Health Access Coalition: “A number of major hospitals in the state meet that, and it doesn’t seem unreasonable to me.” Novant, for example, gives free care at all of its hospitals to patients at 300 percent of the federal poverty guideline or less.
6. Prohibit hospitals from putting liens on the homes of patients with few resources.
State law allows public hospitals to garnishee up to 10 percent of patients’ wages if they don’t pay their bills – and if their income exceeds 200 percent of the federal poverty level. At least one hospital – Wilkes Regional Medical Center in North Wilkesboro – does that.
Says Jessica Curtis: “If a person can’t pay a bill, why squeeze blood from a stone? Why go after the little bit of security they have in their income or owning their own home?”
When the hospital mailed a bill for $48,000, Miller said he had no way to pay it. Carolinas HealthCare System, which owns the hospital, sued, won a judgment and put a lien on Miller’s small three-bedroom house on Charlotte’s westside. The home’s tax value: less than $70,000.
7. Make hospital prices more transparent.
Both Aetna and Blue Cross and Blue Shield of North Carolina have voluntarily created cost estimators for their customers.
New Hampshire and Maine post price information based on paid claims data collected from health insurers. Their websites show estimates not just for the hospital bill, but for the total bill, including doctors’ fees and other services.
Twelve other states have also passed laws requiring collection of health care cost data, but they have not yet published it on websites.
To read other stories in our "Prognosis: Profits" series, click here.