A bipartisan health-care consumer-protection bill has been introduced in the state House at the bequest of state Treasurer Dale Folwell.
House Bill 1039, submitted Tuesday, is titled “Medical Debt De-Weaponization Act.” Primary sponsors are Democrats Howard Hunter of Hertford and Billy Richardson of Cumberland, and Republicans Ed Goodwin of Chowan and Bobby Henig of Currituck.
The bill has to clear the House Banking, Health and Rules and Operations committees before reaching the chamber floor for a vote.
There’s an intriguing mix of 39 conservative and progressive co-sponsors as well, including Reps. Pricey Harrison, D-Guilford, and Reps. Lee Zachary and Jeff Zenger, both R-Forsyth.
“I have been very troubled by all of the stories I have read and heard about the overwhelming burden of medical debt,” Harrison said. “It’s responsible for two-thirds of bankruptcies, including my constituents.”
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“Of course, it would help some if we pass Medicaid expansion, but this proposal seems to provide some protection from abusive pricing,” Harrison said.
Intent of bill
According to the bill and a statement from Folwell, the bill’s mission is to “create a pro-family, anti-poverty, consumer protection law that sets parameters around the provision of charity care and limits the ability of large medical facilities to charge unreasonable interest rates and employ unfair tactics in debt collection.”
Folwell’s primary interest in requesting HB1039 is his oversight authority of the State Health Plan, which has more than 727,000 participants that include current and retired state employees, teachers and legislators. It is North Carolina’s largest purchaser of medical and pharmaceutical services.
“With inflation at 40-year highs and North Carolinas suffering great anxiety, families need protection from the weaponization of medical debt,” Folwell said. “One of the ways you do that is to ensure that large medical providers are transparent concerning the availability of financial help, and that appropriate levels of charity care are available to working families in need.
“A lifesaving procedure shouldn’t cost your life savings.”
The N.C. Hospital Association said Friday it “is still digesting and analyzing this bill and does not have a position on it.”
“An initial high-level take is that federal law already addresses several requirements in the bill, and the North Carolina General Assembly already passed legislation in 2013 that addresses many of the state-specific issues related to fair billing and collections practices.”
The NCHA said hospitals’ charity care spending and community benefit investment activity “is transparent and accountable.”
“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.”
HB1039 represents a legislative response to an analysis of North Carolina’s not-for profit and nonprofit hospitals released in October by Johns Hopkins Bloomberg School of Public Health. That analysis was requested by Folwell and the SHP, over which the treasurer has oversight authority.
The analysis determined that many of those hospitals — including the three largest in the Triad — are not fully honoring their charitable mission. A video link to the presentation is at https://www.youtube.com/watch?v=pL1j4-n3ea8.
The report found that North Carolina’s largest nonprofit hospital systems reaped tax breaks worth more than an estimated $1.8 billion in 2019-2020. Across the majority of these systems, charity care spending did not exceed 60% of the value of their tax breaks, according to researchers.
For the major health-care systems serving the Triad, the Johns Hopkins report listed annual projected value of tax exemptions compared with the systems’ disclosed charity care funding.
Atrium Health was reported with receiving state tax exemptions worth $440.1 million, while providing $260.1 million in charity care.
Novant Health was reported with receiving state tax exemptions worth $324.1 million, while providing $179.1 million in charity care.
Cone Health was reported with receiving state tax exemptions worth $131.6 million, while providing $105.7 million in charity care.
Wake Forest Baptist Medical Center, now an affiliate of Atrium, was reported with receiving state tax exemptions worth $210.3 million, while providing $54.8 million in charity care.
Medical debt laws
The bill is similar to legislation in other states’ consumer-protection laws that seek to protect families from the impact of medical debt on Americans.
Another study, conducted by Rice University’s Baker Institute of Public Policy, the National Academy for State Health Policy and the SHP found that in 2019 some of North Carolina’s nonprofit hospitals billed $149.2 million to poor patients who should have qualified for free or discounted charity care under the hospitals’ own policies.
Additionally, up to 28.7% of hospital bad debt was billed to impoverished patients likely eligible for charity care.
HB1039 would require health care facilities develop a Medical Debt Mitigation Policy that would build on an existing framework of financial assistance plans under the federal Affordable Care Act.
Folwell said his pursuit of the consumer medical bill protections has been spurred by the lack of progress on addressing the medical debt issues over the past four decades.
Zachary said he chose to co-sponsor the bill because of its potential to “limit the predatory lending and collection practices of some medical providers/lenders.
“According to some folks who work with Treasurer Folwell’s office, consumer debt, whether for necessities or consumer debt, is all under the same statute.
“This bill would create a new statute for medical/veterinary debt for necessary procedures,” Zachary said. “That is something Democrats and Republicans can both vote yes on.”
Attorney General review
In January, Atrium Wake Forest Baptist, Cone and Novant were determined to be in full compliance with meeting federal regulations to improve price transparency for patients, according to the N.C. Attorney General’s Office.
However, the office listed eight community or specialty hospitals in the 14-county Triad and Northwest N.C. region as not being fully compliant as of the time of the report. The federal Centers for Medicare and Medicaid Services rolled out Jan. 1 implementation of a hospital price-transparency initiative.
Every hospital “will be required to provide clear, accessible pricing information online about the items and services they provide,” CMS said. Hospitals may face civil monetary penalties for noncompliance.
The Attorney General Office’s review found that 122 hospitals statewide are fully compliant with the CMS regulations.
Meanwhile, 16 hospitals are not compliant with the requirement that they provide a machine-readable list of services and prices. Hospitals listed in that category are Alleghany, Ashe, Hugh Chatham in Elkin, Northern in Mount Airy and Randolph in Asheboro.
One hospital — Holly Hill — is not compliant with the requirement that it provide a consumer-friendly shoppable list.
Eight hospitals are not compliant with either, including Kindred in Greensboro, LifeBright in Stokes County and Select Specialty in Greensboro.
Some hospitals in the non-compliant categories told the Attorney General’s Office they were in the process of updating their tools to comply with the regulations.
In June, Attorney General Josh Stein wrote North Carolina hospitals “to encourage them to come into compliance to better provide patients with the information they need to make informed choices about their health care.”
“When hospitals make their prices transparent it empowers patients to shop around and keeps health care costs in check,” Stein said.