The North Carolina Department of Health and Human Services today released a toolkit aimed at assisting other states seeking to tackle the burden of medical debt. The Medical Debt Toolkit is based on an innovative program recently launched by NCDHHS to address the issue of medical debt among North Carolinians. It builds on record enrollment as North Carolina marks one year of Medicaid expansion.

“North Carolina is leading the nation with an innovative approach to easing the burden of medical debt,” said Governor Roy Cooper. “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.”

More than 20 million Americans held $20 billion in outstanding medical debt in 2021. For many low- and middle-income consumers, medical debt causes significant financial distress and can prevent patients from getting the care they need. This issue is particularly acute in states that have not expanded Medicaid as permitted under the Affordable Care Act. Research shows that medical debt relief is a highly bi-partisan issue with strong support from Democratic and Republican leaders. Polling shows 80% of people want their state and federal elected officials to pass policies to reduce health care costs. Medical debt relief is an initiative leadership can use to significantly improve the lives of their constituents.

“Medical debt is a disease in our health system. Relieving this debt can lead to healthier individuals and a stronger health system overall,” said Health and Human Services Secretary Kody H. Kinsley. “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 program is the first in the nation to leverage Medicaid state directed payment authority to encourage hospitals to both relieve historical medical debt and adopt forward-looking protections to prevent the accumulation of debt. While the program is optional for hospitals, all 99 acute care hospitals in the state have agreed to participate. Through the program, hospitals are expected to relieve up to $4 billion in existing medical debt for two million North Carolinians. Participating hospitals also will be required to implement more robust and standardized financial assistance policies, proactively screen patients for eligibility for financial assistance, eliminate reporting of medical debt to credit agencies and implement certain other protections.

Currently, there is a very clear pathway for states to pursue similar initiative. NCDHHS compiled a toolkit providing guidance and discussing key considerations on critical program design and implementation issues. Specifically, the toolkit focuses on the following areas:

  • The structure of the state-directed payments (SDP) arrangement.
  • Required hospital medical debt mitigation policies (tied to enhanced payments under SDP program).
  • Interaction of the program with other federal requirements (e.g., federal fraud and abuse laws).
  • Communications and stakeholder engagement strategy.
  • Operational considerations.

The toolkit also links to several resources for states to reference, including:

  • Key excerpts of relevant documents.
  • A landscape assessment of other states’ medical debt mitigation policies.
  • Press releases and communications from NCDHHS related to the program.

The toolkit can be found on the NCDHHS website.

NCDHHS is committed to increasing access to the right care at the right time for all North Carolinians. Expanding Medicaid, implementing Medical Debt Relief, investing $835 million in behavioral health, launching Healthy Opportunities Pilots and being supported by a Community Partner Engagement strategy are all examples of the department’s work toward its three priorities of Supporting Child and Family Well-Being, Building an Inclusive Workforce and Investing in Behavioral Health Resilience. [source]