Four more hospitals in North Carolina have joined Advocate Health in announcing that they are voiding all existing judgments and liens for outstanding debts. All together, the five hospitals account for nearly all medical debt collection lawsuits in The Tarheel State.
Details:
- Advocate Health, the state’s largest healthcare system, announced in September that it would clear old judgments and lift liens against thousands of patients.
- Four other hospital systems — CaroMont Health, Mission Health, Sampson Regional, and Community Health Systems (which owns Lake Norman Regional Hospital) — have also confirmed they are taking similar steps.
- Together, these five hospitals accounted for 96% of the medical debt lawsuits in North Carolina from 2017 to mid-2022, according to a report by the state treasurer’s office and Duke University Law.
- Between 2017 and mid-2022, these hospitals filed 5,922 lawsuits and won $58.7 million in judgments, with an average judgment of $16,623.
Zoom out: In North Carolina, medical debt judgments can last for 20 years, automatically placing liens against patients’ homes. These liens accrue 8% interest per year until the debt is paid. The hospitals’ decision to release these judgments means patients can sell their homes without the burden of unpaid medical debt hanging over them.
The backstory: Hospitals across the country have faced increasing scrutiny for aggressive medical debt collection practices, particularly as the number of Americans struggling with medical debt continues to grow. North Carolina has one of the highest rates of medical debt in collections in the U.S., with roughly one in five residents affected, according to the Urban Institute.
What they’re saying: Rebecca Cerese, health policy advocate for the NC Justice Center, shared that her organization was one of 26 nonprofits that sent a letter to hospital CEOs in September, urging them to follow Atrium Health’s example. While they did not receive a response at the time, Cerese expressed satisfaction that the hospitals are now forgiving the debt.
