The consumer protection bill focuses on medical debt. It was rebuffed at the committee hearing, despite bipartisan sponsorship | Government and politics
The first hearing of a bipartisan health care consumer protection bill delivered few punches on Tuesday when it comes to accusations of health systems ill will.
Meanwhile, at least one lawmaker at the House Banking committee meeting challenged some of the premises presented by the sponsors of Bill 1039 and state treasurer Dale Folwell.
The bill, filed May 24, is titled the Medical Debt De-Weaponization Act and was drafted at Folwell’s request.
The main sponsors are Democrats Howard Hunter of Hertford and Billy Richardson of Cumberland, and Republicans Ed Goodwin of Chowan and Bobby Henig of Currituck.
There’s also an intriguing mix of 39 conservative and progressive co-sponsors, including Reps Pricey Harrison, D-Guilford, and Reps Lee Zachary and Jeff Zenger, both R-Forsyth.
Tuesday’s addressing of HB1039 was just for discussion purposes, which lasted nearly 40 minutes.
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According to the bill and a statement by Folwell, the bill’s mission is to “create pro-family, anti-poverty and consumer protection legislation that sets parameters around the provision of charitable care and limits the ability large medical establishments to charge unreasonable interest. rates and employ unfair tactics in debt collection.
Folwell’s primary interest in the HB1039 application is its state health plan oversight authority, which has more than 727,000 participants, including current and retired state employees, teachers and legislators. It is the largest purchaser of medical and pharmaceutical services in North Carolina.
“I’m here to defend the invisible,” Folwell said. “With inflation at its highest level in 40 years and North Carolina residents suffering from high anxiety, families need protection from the weaponization of medical debt.
“One way to do this is to ensure that major medical providers are transparent about the availability of financial assistance and that appropriate levels of charitable care are available for working families in need.
“A life-saving procedure shouldn’t cost your life savings.”
Goodwin on Tuesday highlighted the “disarming” angle of HB1039.
“Fewer and fewer people can afford healthcare, but they need to have it and they still need to be treated,” Goodwin said.
“But, the way they’re being treated now… doesn’t seem appropriate to me.”
Goodwin focused on his concern that indigent people seeking care in hospitals are being moved away from charity care options and towards “a medical credit card” to pay their medical bills.
Goodwin said he was told that some hospitals also offer medical credit cards as options “to pay for gas, groceries or whatever you want.”
He said he sees offering the option as “taking on a needy charity case, and in this country I thought that kind of stuff was outlawed a long time ago…predatory lending is the way I refer to that”.
Goodwin said this option inevitably puts hospitals in the debt collection business, and they end up hiring third-party debt collectors who receive a portion of the debt paid as an incentive.
Representative John Szoka, R-Cumberland, questioned the accuracy of Goodwin’s presentation, saying he was not aware of any medical credit cards authorized to be used for non-medical purchases.
Szoka also questioned Folwell’s assertion that the weaponization of medical debt includes damage to consumers’ credit scores if they cannot pay their medical bills in the timeframes that health care systems deem appropriate.
Folwell said debt-lowered credit scores can lead to paying higher interest rates for large purchases.
In most cases, medical debt is not included in determining credit scores if the debt remains with the healthcare provider, but is counted if the account is turned over to a collection agent.
According to CNBC’s March reportThe three major credit reporting agencies – Equifax, TransUnion and Experian – have agreed to remove 70% of medical debt information from consumer credit reports starting in July.
The bureaus – Equifax, TransUnion and Experian – say medical collection debt will no longer appear on credit reports if that debt has already been paid.
CNBC reported that debts to debt collectors can linger on a credit report for up to seven years, although the new rule removes them if paid off.
Goodwin also expressed concern about health systems’ reluctance to tell patients the expected cost of their treatment in advance or bury the costs in coding that most people cannot understand.
Goodwin said the answer most people with health insurance tend to get is “you have insurance, don’t worry about it.”
HB1039 would set collection standards for the healthcare system, Goodwin said.
“This bill would allow them (indigent patients) to be treated with more respect than they are now,” Goodwin said.
The NC Healthcare Association reiterated Tuesday that it has not taken a position on HB1039.
“A first high-level position is that federal law already meets several requirements of the bill, and the NC General Assembly had already passed legislation in 2013 that addresses many state-specific issues related fair billing and collection practices.”
The NCHA said hospitals’ charitable care spending and community benefit investment activities “are transparent and accountable.”
“North Carolina nonprofit hospitals submit annual audits to state and federal tax regulators, who determine that the hospitals are meeting their tax status obligations.
“Non-compliance can result in the revocation of a hospital’s tax-exempt status, which has never happened in North Carolina.”
HB1039 represents a legislative response to an analysis of nonprofit and nonprofit hospitals in North Carolina released in October by the Johns Hopkins Bloomberg School of Public Health. This analysis was requested by Folwell and the SHP, over which the Treasurer has supervisory power.
The analysis determined that many of these hospitals – including the three largest in the Triad – are not fully honoring their charitable mission. A video link to the presentation is at https://www.youtube.com/watch?v=pL1j4-n3ea8.
The report found that North Carolina’s largest nonprofit hospital systems received tax relief estimated to be worth more than $1.8 billion in 2019-20. In the majority of these systems, charitable care expenditures did not exceed 60% of the value of their tax breaks, the researchers found.
For the major health care systems serving the Triad, the Johns Hopkins report listed the projected annual value of tax exemptions compared to charitable care funding disclosed by the systems.
Atrium Health reportedly received state tax exemptions worth $440.1 million, while providing $260.1 million in charitable care.
Novant Health reportedly received state tax exemptions worth $324.1 million, while providing $179.1 million in charitable care.
Cone Health reportedly received state tax exemptions worth $131.6 million, while providing $105.7 million in charitable care.
Wake Forest Baptist Medical Center, now affiliated with Atrium, reportedly received state tax exemptions worth $210.3 million, while providing $54.8 million in charitable care.
On Tuesday, Folwell reignited a years-long critique of the state’s largest nonprofit health systems by saying they were multi-billion dollar organizations run by multi-million dollar executives.” benefiting from a passive transfer of wealth, especially from low-income people.