(The Center Square) – For years, UNC Health did not charge interest on payment plans patients used to pay off medical debts, but things changed in 2019.
That’s when the Chapel Hill-based nonprofit hospital system owned by the state signed a contract with AccessOne, a private equity-backed lender that finances patient loans for hospitals nationwide.
By February 2022, more than 100,000 UNC patients were enrolled in an AccessOne plan, with 46% in a loan with the highest 13% interest rate, according to research from the Keiser Family Foundation Health News.
It was a similar dynamic with Charlotte’s Atrium Health, which contracted with AccessOne in 2014. Billing records from 2021 analyzed by KFF Health News found as many as half of Atrium Health patients in AccessOne loans with the highest-interest plans.
UNC Health officials have justified the change by pointing to a responsibility to remain financially stable and have insisted patients enter into the loans at their own request. AccessOne executives say they’re providing an alternative to lawsuits with a means for patients to finance medical costs.
Other recent research shows hospitals in North Carolina have sued patients who could not make their payments, and billed $149 million to poor patients that should qualify for assistance. Studies have also shown nonprofit hospitals in the state have failed to match their tax exemptions with financial assistance for low income patients. The studies followed financial reports that peg UNC Health’s revenues at $5.8 billion and Atrium Health’s revenues at $7.5 billion in 2021.
The shift in lending practices, a national phenomenon, is now motivating efforts on the state and federal level to address increasing medical debt that’s crippling patients across the country. In North Carolina, 1-in-5 families are in medical debt collections, while Eastern North Carolina in particular is home to some of the highest concentrations of medical debt collections in the country.
In Greene, Lenoir, Tyrell and Duplin counties, between 38% and 44% of residents have medical debt in collections – about three times the national average.
KFF Health News on Tuesday posted AccessOne’s contracts with UNC Health and Atrium Health as federal officials launch an investigation into the trend toward high-cost medical credit cards and installment loans pushed on patients.
The Consumer Financial Protection Bureau, U.S. Department of Health and Human Services, and U.S. Department of Treasury announced last month officials are soliciting public input through September to consider ways to address the problem.
“Financial firms are partnering with health care players to push products that can drive patients deep into debt,” said Rohit Chopra, director of the consumer bureau. “We are opening a public inquiry to better understand how these practices are affecting patients in our country.”
North Carolina Treasurer Dale Folwell, a Republican candidate for governor who has worked to address rising health care costs since taking office in 2017, is promoting the Medical Debt De-Weaponization Act to strengthen hospital price transparency and regulate how large health-care facilities collect medical debt.
The bill would require hospitals to screen patients for eligibility for public assistance programs, and to publicize both a Medical Debt Mitigation Policy and prices online.
Other provisions would hold debt collections in abeyance during insurance appeals, shield family members from medical and nursing home debts, require detailed receipts of payments, and cap interest rates for medical debt at 5%.
Noncompliance with the law would lead to revocation of hospitals’ nonprofit status, if approved.
North Carolina hospital officials have disputed the accuracy of recent reports on charity care and medical debt, and have taken issue with the title of the legislation, but have not testified in committee hearings to oppose it.
The bill, Senate Bill 321, cleared the Senate by unanimous vote in May and is now pending in the House rules committee as lawmakers prepare to return to Raleigh next week.
