NC Medical Debt

Versión en Español

North Carolina Medical Debt Frequently Asked Questions

On July 1, North Carolina Governor Roy Cooper and the Department of Health and Human Services (NCDHHS) announced new actions leveraging the state’s Medicaid program that will encourage hospitals to relieve existing medical debt and ease the burden of medical debt on North Carolinians in the future. NCDHHS has asked CMS to approve the medical debt policies as a condition of eligibility for North Carolina hospitals to receive an enhanced level of payment under the Healthcare Access and Stabilization Program (HASP), a program that began at the same time as Medicaid expansion. This FAQ describes important details of the new program and how it will impact North Carolina consumers.

Tab/Accordion Items

All acute care hospitals in North Carolina have the option to participate in the medical debt mitigation program. Hospitals that participate will be eligible for an enhanced level of Medicaid reimbursement under the HASP program. NCDHHS will share updates on participating hospitals at a later date.   

Medicaid enrollees will have all outstanding medical debt dating back to January 1, 2014 that is owed to participating hospitals relieved.

Other consumers not enrolled in Medicaid with incomes at least at or below 350% of the Federal Poverty Level (FPL), or for whom total medical debt owed to a participating hospital exceeds 5% of income, will have all medical debt that is more than two years old dating back to January 1, 2014 and owed to participating hospitals relieved (exceptions apply to individuals who have a payment plan agreement with the hospital).

Hospitals have the option to participate so this may not apply to all hospitals.

NCDHHS expects participating hospitals will begin to forgive debt for eligible consumers in 2025 and 2026. The Department plans to communicate more details on the timeline in the near future.

Patients do not need to take any action now. Participating hospitals will work with a third-party vendor to identify outstanding debt that is eligible for relief.

Participating hospitals will also implement new policies designed to prevent low and middle-income consumers from incurring medical debt in the future. Most of the policies described below will apply to both uninsured and insured patients with incomes less than or equal to 300% of the FPL, which in 2024 for a family of four is $93,600:   

  • Providing discounts on medical bills of between 50-100%, with the amount of the discount varying based on the patient’s income.
  • Automatically applying discounts on patient bills based on the patient’s income or participation in other government programs, rather than requiring patients to apply for financial assistance.
  • Not selling any medical debt for consumers with incomes at or below 300% FPL to debt collectors.   
  • Capping interest rates on medical debt held by participating hospitals at 3%.
  • Committing to not reporting medical debt to credit agencies.
  • Other policies to protect consumers from the harmful effects of medical debt. 

While CMS is reviewing NCDHHS’ application, the Department will work with interested hospitals to prepare for implementation. Upon CMS approval, the Department will begin to implement the program, including working with hospitals on medical debt relief and initiating enhanced Medicaid reimbursement for eligible hospitals.

The Department encourages hospitals to participate in the program, which is a win-win for both consumers and hospitals. The medical debt relief announced today will not impact consumers with debt owed to hospitals that opt out of the program.

No. The program does not impact provider participation in Medicaid.  As always, Medicaid enrollees should make sure to access an in-network hospital if they are enrolled in a managed care plan. A directory of Medicaid providers in-network with each plan is available here.