Solving the Medicaid Debt Crisis Goes Beyond Medicaid Expansion, Certification Need Repair

The fate of a bipartisan Medicare Consumer Protection bill that addresses medical debt could be linked to expanding Medicaid and certification of need legislation during the 2023 hearing.

Electing a Republican supermajority to the North Carolina Senate and being shy of one seat from a Republican supermajority in the NC Senate could be a factor in whether House Bill 1039 advance to a hall vote in either House – or address it at all.

Supporters of Medicaid expansion cite multiple studies indicating that between 450,000 and 650,000 North Carolinians became eligible for Medicaid coverage.

The objective of the Certification of Need (CON) process is to reduce unnecessary duplication of services in the community.

Those who promote CON reform say the new competition – primarily from independent and for-profit providers – will push non-profit healthcare systems to lower the cost they impose on many procedures.

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However, state Treasury Secretary Del Fulwell said that both efforts only address the symptoms of the systemic medical debt problem without offering a potential cure.

Instead, Fulwell continues to refer to HB1039introduced on May 24, titled “Medical Debt Disarmament Act.”

The bipartisan bill was introduced on Fulwell’s will, but stalled in the House Banking Committee after only one information-only hearing.

Fulwell said he thinks the odds are “very high” to work on HB1039 during the 2023 session.

Fulwell’s primary interest in HB1039 is his supervisory authority over the government’s health plan, which has more than 727,000 participants including current and retired state employees, teachers and legislators. It is the largest purchaser of medical and pharmaceutical services in North Carolina.

According to the bill and a statement from Folwell, the bill’s mission is to “create a pro-family, anti-poverty and consumer protection law that sets standards around the delivery of charitable care and limits the ability of large medical facilities to charge unreasonable interest rates and use unfair debt-collection tactics.”

Tucked in HB1039 is a language that can provide free medical care or significant financial discounts to some low-income families.

“Everyone knows there’s something wrong,” Fulwell said.

Growing awareness of the financial burden caused by medical debt has drawn state and national attention to Fulwell’s advocacy.

For example, it was cited heavily in a recent national story on the topic on NPR.

Medicaid debt affects not only the uninsured and underinsured, Fulwell said, but also those who have employer-based or Federal Health Exchange insurance and who he says face unrealistic payment expectations from health care systems.

“Medical debt will continue to be an issue regardless of Medicaid expansion,” Fulwell said. “You can’t have a revenue solution to the cost problem.

“There are individuals who are afraid to get the medical care they need when they need it because of what could happen to them from a medical billing standpoint.

“The complexities of Certification of the Need for Reform and Medicaid Expansion have little to do with the weaponization of people’s credit scores associated with Medicaid debt,” Fulwell said.

HB1039 . Discussion

Medical debt law has the potential for setting precedent due to an intriguing mix of 39 conservative and progressive patrons, including Representatives Brassie Harrison and Dee Guilford, Representatives Lee Zachary and Jeff Zenger, both R Forsyth.

The House Banking Committee’s June 7 debate, which lasted about 40 minutes, took a few hits when it came to accusations of bad faith by health care systems.

Representative John Zuka, R-Cumberland, questioned Fulwell’s assertion that weaponizing medical debt includes consumers’ credit scores if they cannot pay their medical bills in a timely manner considered by health care systems.

Depending on the debt and bad debt collection policies of the health care system, a patient who decides to have the ability to pay their bill can sell their account to a debt collector within a few months of submitting a payment request.

Representative Ed Goodwin, R-Chuan, focused on his concern that indigent individuals seeking hospital care are being directed away from charitable care options, and toward a “medical credit card” to pay their medical bills.

Goodwin said he’s been told that some hospitals also offer medical credit cards as options to “pay for gas, groceries, or whatever you want.”

This option inevitably puts hospitals into the debt-collection business, Goodwin said, eventually hiring third-party debt collectors who receive a portion of the debt paid as their incentive.

Szoka questioned the accuracy of Goodwin’s presentation, saying he was unaware of any medical credit card that was allowed for non-medical purchases.

Falwell said lower credit scores due to debt could lead to higher interest rates being paid for major purchases.

In most cases, medical debt is not included in determining credit scores if the debt remains with the health care provider, but is counted if the account is transferred to the debt collector.

Goodwin said HB1039 will set collection standards for health care systems.

“This bill would allow them (indigent care patients) to be treated with more respect than they are now,” Goodwin said.

HB1039 . support

Since the solo committee hearing, Fulwell has continued to speak about his medical debt concerns, including presentations on September 7 in Asheville and October 17 in Elizabeth City. He has plans for additional events.

Fulwell said that despite the lack of progress in the legislature, the initiative is gaining popular support and advocacy groups.

“We are grateful that these organizations are finally on alert for the reports that have been coming out of the treasurer’s office for nearly a year,” Fulwell said.

Fulwell called out healthcare system executives for their unwillingness to go to a public forum and address their medical debt and charitable care policies.

“Obviously anyone trying to politicize this by talking about Democrats or Republicans doesn’t know that they are on the wrong side of history,” Fulwell said.

Having such bipartisan care, and Fulwell as an advocate, would keep it on the sidelines of the North Carolina universal health care reform debate, said Mitch Cockay, senior policy analyst at the John Locke Foundation for Conservative Ideas.

Although Kokai said HB1039 “is not directly related to the discussion about Medicaid expansion and certification of need reform,” policymakers will likely tie key healthcare legislation together moving forward. “

“If nothing else, concerns about the questionable use of medical debt could play a role as a bargaining chip in ongoing negotiations on other proposed reforms.”

NCHA استجابة response

The NC Healthcare Association has confirmed that it has not taken a position on HB1039.

“One high-level initial action is that federal law already addresses many of the requirements in the bill, and the North Carolina General Assembly previously passed legislation in 2013 that addresses several state-specific issues related to fair billing and collection practices.”

The NCHA said hospital charitable care spending and community benefit investment activity is “transparent and accountable.”

“North Carolina nonprofit hospitals submit audits annually to state and federal tax regulators, which determine that hospitals meet their tax status obligations.

“Failure to comply could lead to the hospital’s tax-exempt status being revoked, which has never happened in North Carolina.”

In a comment provided to the NC Policy Watch, the NCHA said, “We have significant concerns that this law could cause hospitals to absorb millions of additional dollars in unpaid care.”

This, in turn, can increase the cost of caring for others.”

In a separate statement sent to the media, the NCHA said that “North Carolina’s health systems and hospitals have millions of health care interactions with patients and families each year.

They actively work with patients to help them understand health care coverage and financial obligations. They are trying to make it easier for patients to contact information regarding financial assistance and reimbursement options.”

When it comes to an unpaid bill, the NCHA said, “The Federal Internal Revenue Service has identified a wide range of steps and waiting times that hospitals must follow before taking any collection actions, and this is a last resort.

“To suggest that hospitals are using medical debt as a weapon is nothing but political glorification.”

Opinions of local legislators

“It’s too early to say what legislation may or may not be introduced,” said Representative Donny Lambeth, R Forsyth, a leading health care expert in the House of Representatives.

Lambeth said he has mixed feelings about the medical debt issue.

“Medical debt is a serious problem, not just in North Carolina, but across the country,” Lambeth said.

“But when we buy a product or service, we are obligated to pay for that service. Medical services are no different.

“The system typically works with a person or family to help them manage the cost of health care used, such as helping them get help, maybe helping them qualify for Medicaid, or using an indigent fund to cover the cost of care,” Lambeth said.

Lambeth, the former CEO of NC Baptist Hospital, has been a major proponent of expanding Medicaid in the House, including introducing bills in recent sessions.

“The expansion is sure to help tremendously, because it will add coverage for many of the people who don’t have coverage,” Lambeth said.

“Expansion will go a long way to helping medical providers recover the cost of caring for people in need.”

“Citizens are responsible for all debts they incur, including medical debts,” said Senator Joyce Krawick, R Forsyth, a leading advocate of need-certification reform in the Senate.

However, there are many who simply cannot fulfill these obligations. There are many who can’t afford insurance currently, but could qualify for Medicaid under the expansion.”

Her main concern, Krawick said, “is that there are many medical billing errors that need to be addressed. I’m aware of credit complications due to medical billing errors.”

We must continue to find ways to lower the cost of care and improve access to it. One way to help with this process is to fix the need certificate.

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