North Carolina treasurer’s report criticizes how hospitals bill poor people


Nonprofit hospitals in North Carolina routinely bill poor people for medical care that they should write off because of their tax-exempt status, according to a report released Wednesday by the state treasurer’s office.

The report, produced by the National Health Program and the National Institutes of Health Policy, declared that a “lack of transparency overshadows” the prevalence of such billing and “existing laws provide little protection for patients and taxpayers.”

A bipartisan group of state legislators held a news conference with Treasurer Dale Folwell about the report and called for reform, according to news outlets. These include setting minimum requirements for how much charity care a nonprofit hospital must provide.

“The findings in this report point to the need for greater accountability,” Falwell said in a news release. “Despite generous tax breaks, not-for-profit hospitals don’t always provide more charitable services than for-profit hospitals.”

The North Carolina Healthcare Association, which represents for-profit and not-for-profit hospitals and hospital systems, said in a broad written statement that “charitable healthcare spending and community benefit investment activities are transparent and accountable.”

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The group slammed the news conference as Folwell’s “public relations stunt” as hospital staff are stretched thin as they deal with record hospitalizations amid COVID-19.

Falwell, a Republican re-elected in 2020, also released a report in October that found most of the state’s largest nonprofit hospital systems failed to provide more than 60 percent of the value of the system’s tax deductions they have received in recent years. Money Charity Care.

Wednesday’s report, peer-reviewed by Rice University researchers, found some nonprofit hospitals charged indigent patients $149.2 million in fiscal 2019 who should be eligible for charities under the hospitals’ own policies, Folwell said. care. But that covers less than 20 percent of the state’s nonprofit hospitals, the report said.

Citing 2019 federal tax filings, an average of 12 percent to 29 percent of the state’s nonprofit hospitals’ bad debt should come from charity care, compared with the 10 percent national average last recorded in 2017, the report’s findings show. The pandemic could make patient debt problems worse, the report said.

The report also said hospitals seeking to collect unpaid bills sometimes do so by sabotaging their credit scores or suing patients. Some hospitals are also encouraging patients to open “medical credit cards” that charge interest to pay their bills, the report said.

The Health Care Association has previously noted that hospitals provide community benefits for their coverage beyond charitable health spending, including research, health worker training and in-kind donations. According to the association, hospitals must submit annual audit reports to the tax watchdog to maintain their tax-exempt status.

“There is no question that the nonprofit hospital is proudly delivering on its commitment to charity care and community benefit to North Carolina people,” the association’s statement said Wednesday. The association said the pandemic is causing hospitals to spend their reserves, leaving them financially out of balance. The association supports expanding Medicaid to cover hundreds of thousands of additional low-income adults.

Folwell’s department oversees the state health program, which spends $3 billion a year on health care and pharmacy services to reach as many as 750,000 people — current and retired public officials and teachers, as well as their families.



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