Innovative North Carolina Initiative Offers Hope for Tackling Medical Debt Nationwide
In a groundbreaking move, the North Carolina Department of Health and Human Services (NCDHHS) has unveiled a new toolkit designed to assist states in addressing the pervasive issue of medical debt. The Medical Debt Toolkit draws from an innovative program initiated by NCDHHS, which builds upon the state’s significant progress following a year of Medicaid expansion.
Governor Roy Cooper emphasized the importance of this initiative, stating, “North Carolina is leading the nation with an innovative approach to easing the burden of medical debt. Freeing people from medical debt is life-changing for families and a benefit to our economy, and I hope other states can use the roadmap we’ve laid out to make a difference.”
The issue of medical debt is a significant concern across the United States, with over 20 million Americans holding $20 billion in outstanding medical debt as of 2021. This financial strain is especially pronounced in states that have not embraced Medicaid expansion under the Affordable Care Act. Notably, medical debt relief enjoys bipartisan support, with polling indicating that 80% of the population desires legislative action to reduce healthcare costs. This makes medical debt relief a priority for leaders aiming to enhance the well-being of their constituents.
Health and Human Services Secretary Kody H. Kinsley remarked, “Medical debt is a disease in our health system. Relieving this debt can lead to healthier individuals and a stronger health system overall. The financial burden and fear of medical debt — a debt no one ever chooses to have — makes people avoid getting the essential and preventive care they need.”
North Carolina’s initiative is pioneering in its use of Medicaid state-directed payment authority, which incentivizes hospitals to both alleviate existing medical debt and implement preventative measures against future debt. All 99 acute care hospitals in North Carolina have opted into this voluntary program, which aims to forgive up to $4 billion in medical debt for two million residents. Hospitals participating in the program are required to enhance financial assistance policies, proactively determine patient eligibility for aid, stop reporting medical debt to credit agencies, and adopt additional protective measures.
For states interested in replicating this model, NCDHHS has created a comprehensive toolkit that addresses essential program design and implementation aspects. Key areas of focus in the toolkit include:
- The structure of state-directed payments (SDP) arrangements.
- Required hospital medical debt mitigation policies linked to enhanced SDP payments.
- The program’s interaction with other federal requirements, such as fraud and abuse laws.
- Effective communication and stakeholder engagement strategies.
- Operational considerations.
The toolkit also offers resources for states to consult, including relevant document excerpts, evaluations of other states’ medical debt policies, and communications from NCDHHS about the program. Interested parties can access the toolkit on the NCDHHS website.
NCDHHS remains committed to enhancing healthcare access for all North Carolinians, with initiatives such as Medicaid expansion, Medical Debt Relief, an $835 million investment in behavioral health, and the launch of Healthy Opportunities Pilots. These efforts align with the department’s priorities to support child and family well-being, build an inclusive workforce, and invest in behavioral health resilience.
Read More Here
