North Carolina hospital company forgives debts of 11,500 people after NBC News report
Less than a week after NBC News detailed how the hospital system Atrium Health of North Carolina aggressively pursued former patients’ medical debts, placing liens on their homes to collect on hospital bills, the nonprofit company announced it would cancel those obligations and forgive the unpaid debts associated with them. Some 11,500 liens on people's homes in North Carolina and five other states will be released, Atrium’s parent company, Advocate Health, said with some dating back 20 years or more.
Advocate Health said it is changing its policy now as “the next logical step” following a 2022 decision to stop filing lawsuits and property liens to collect on patients’ medical debts. The company declined NBC News’ request for an interview about the shift.
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Reporting on the nationwide problem of medical debt last week, NBC News focused on Terry Belk, 68, a Charlotte resident whose wife died of breast cancer in 2012 and who was himself later diagnosed with prostate cancer. Both his wife’s treatment and Belk’s own racked up tens of thousands of dollars in bills their insurance did not cover. When Belk could not afford to pay them, Atrium Health pursued him in court, the company confirmed. In 2005, Belk signed what’s called a deed of trust with Atrium, granting it the right to receive $23,000 when he sold his family home.
Belk said he was stunned to receive a phone call from an Atrium Health executive Tuesday advising him that his debts would be forgiven. “There’s no way this would have happened without national coverage by NBC News,” Belk said.
Rebecca Cerese, health policy advocate at North Carolina Justice Center, a nonprofit fighting poverty in the state, said she was very pleasantly surprised by Atrium’s move and hopes other hospitals will follow suit. “I’m really thankful that folks like Terry have had the courage to speak out about something that is difficult to speak out on,” Cerese told NBC News. “Dealing with an illness or loss of a loved one is hard enough — we should not be compounding that with this additional stress of facing financial ruin.”
Americans owe some $220 billion in medical debt, according to KFF, a nonprofit health policy research, polling and news organization. The top three states for medical debt are South Dakota, where 18% of the population is affected, followed by Mississippi at 15% and Belk’s home state of North Carolina at 13%, KFF says.
From January 2017 through June 2022, North Carolina hospitals sued 7,517 patients and their family members to collect medical debt, according to a study by Duke University School of Law faculty and North Carolina’s Office of State Treasurer. Many of the legal actions resulted in default judgments in state district courts; interest charges and other added fees accounted for an astounding 35% of the $57.3 million in total judgments owed by patients.
In July, North Carolina Gov. Roy Cooper, a Democrat, announced a medical debt relief program that all of the state’s 99 eligible hospitals agreed to participate in, forgiving medical debts dating back to Jan. 1, 2014, for Medicaid beneficiaries. In addition, medical debt considered uncollectible for patients whose income is at or below at least 350% of the federal poverty level will be relieved under the program, as will past medical debt exceeding 5% of a person’s annual income. Nine Atrium hospitals in the state are among the participants.
But that program did not help many former patients carrying medical debt from prior years. For instance, Belk said his debt was excluded from the governor’s initiative.
Announcing its new lien release program, Advocate Health said it would start with the oldest cases first, resolving them individually “over the next several months.” The company warned that the process would take time as it coordinates with courts in each jurisdiction.
When NBC News contacted Atrium Health previously about Belk’s situation, the company spokesman provided a statement saying that the health system has used litigation against patients “as a last resort,” and that Belk signed both the deed of trust and the other judgment voluntarily, “and presumably on the advice of his attorney.”
The company statement added: “As the leading, nonprofit health system in the Southeast, Atrium Health works to ensure access to high-quality care for everyone in each community we’re privileged to serve. For us, there are no profits — just outcomes, in the form of improving health, elevating hope and advancing healing — for all.”
This article was originally published on NBCNews.com
