Four More N.C. Hospital Systems Cancel Old Medical Debt Judgments
By Michelle Crouch
Co-published with The Charlotte Ledger
October 29, 2024
In a significant move towards alleviating the burden of medical debt, five hospital systems in North Carolina, which have been responsible for the majority of lawsuits filed against patients for unpaid medical bills, have committed to erasing all existing judgments. This decision comes as a response to growing concerns about the impact of medical debt on individuals and families across the state.
Background on Medical Debt in North Carolina
Medical debt has become a pressing issue for many Americans, with approximately one in five residents in North Carolina facing debt in collections. This statistic places North Carolina among the states with the highest rates of medical debt in the country. A recent report by the state treasurer’s office and Duke University Law revealed that between 2017 and mid-2022, the five hospital systems—Atrium Health, CaroMont Health, Mission Health, Sampson Regional, and Community Health Systems—accounted for a staggering 96 percent of medical debt lawsuits in the state. During this period, these hospitals filed nearly 6,000 lawsuits, resulting in judgments totaling $58.7 million, with an average judgment amount of $16,623.
The Shift in Hospital Policies
Atrium Health, North Carolina’s largest healthcare system, was the first to announce its commitment to canceling old medical debt judgments. In September 2024, Atrium revealed plans to clear judgments and lift liens against thousands of patients, having already ceased filing medical debt-related lawsuits earlier in the year. Following Atrium’s lead, four additional hospital systems—CaroMont Health, Mission Health, Sampson Regional, and Community Health Systems—have either begun or completed similar actions.
CaroMont Health, which had the second-highest number of medical debt lawsuits, announced that it stopped pursuing liens in September to align with the state’s medical debt relief program. This program mandates hospitals to forgive medical debt incurred by low- and middle-income patients dating back to 2014, in exchange for federal funding.
The Impact of Medical Debt Judgments
Medical debt judgments in North Carolina can last for up to 20 years, automatically placing liens on patients’ homes. This means that hospitals can collect the owed amounts when the property is sold or upon the owner’s death, often accruing 8 percent interest annually if left unpaid. The cancellation of these judgments allows patients to sell their homes without the looming threat of outstanding medical debt, providing a much-needed financial reprieve.
Rebecca Cerese, a health policy advocate for the NC Justice Center, expressed her satisfaction with the hospitals’ decisions. Cerese was part of a coalition of 26 nonprofits that urged the hospitals to follow Atrium’s example, emphasizing the detrimental impact of medical debt on individuals’ ability to build generational wealth through homeownership.
Patient Experiences and Reactions
For many patients, the cancellation of medical debt judgments has brought immense relief. Lionel and Brenda White, a couple from Charlotte, recently received a letter from Atrium informing them that the hospital system had canceled a $50,529 lien on their home. This debt stemmed from a three-day hospital stay in 2018, an amount that exceeded their annual income. The couple had previously sought assistance from Atrium to clear their debt but were told they had no options. The recent cancellation, however, has lifted a significant burden from their shoulders.
Brenda White expressed their gratitude, stating, “Everything was canceled. We were like, ‘Thank God.’ We didn’t need that hanging over our heads. I don’t know who could pay that kind of money. So we feel a lot of relief.”
Conclusion
The decision by these North Carolina hospital systems to cancel old medical debt judgments marks a pivotal moment in the ongoing battle against medical debt in the United States. As more hospitals recognize the detrimental effects of aggressive collection practices on patients and their families, there is hope for a more compassionate approach to healthcare financing. The actions taken by Atrium Health, CaroMont Health, Mission Health, Sampson Regional, and Community Health Systems serve as a powerful reminder of the importance of prioritizing patient welfare over profit, paving the way for a healthier and more equitable healthcare system.
This article is part of a partnership between The Charlotte Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area. You can support this effort with a tax-free donation here.
This article first appeared on North Carolina Health News and is republished here under a Creative Commons license.