Special to IFN
RALEIGH — The N.C. Department of Health and Human Services has received approval from the Centers of Medicare and Medicaid Services to continue the Healthcare Access and Stabilization Program (HASP) that makes hospital incentives for the state’s medical debt relief initiative possible.
The first two years were approved in July 2024. This new approval supports the state’s work to relieve more than $4 billion and a decade’s worth of medical debt for nearly 2 million low- and middle-income North Carolinians and prevent accumulation of new debt going forward.
“Carrying medical debt for too many people is like carrying a financial anvil. North Carolina’s medical debt relief initiative is giving these folks a clean credit slate,” said Gov. Josh Stein. “I am pleased that CMS has approved this initiative for another year so we can continue to create a stronger health care system and healthier North Carolina for every person.”
In its third year, for services provided to Medicaid managed care enrollees from July 2025 to June 2026, the HASP program will include nearly $6.5 billion in gross revenue if all North Carolina hospitals continue to participate in the medical debt relief initiative. Importantly, HASP dollars are not being used to implement medical debt relief for consumers. Rather, hospitals are required to relieve medical debt deemed uncollectable and adopt certain charity care policies as a condition of eligibility to receive enhanced HASP payments.
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.
“North Carolina’s innovative medical debt relief plan ensures people with low-income are protected from harmful debt collection practices and financial ruin,” said NC Health and Human Services Secretary Dev Sangvai. “This program is a win-win for North Carolina so that people can receive the care they need without fear of costly medical debt while supporting financial sustainability for hospitals.”
Last year, all 99 acute care hospitals in the state signed on to participate. In addition to mitigating medical debt, hospitals are also required to implement more robust and standardized financial assistance policies and eliminate reporting of medical debt to credit agencies.
More than 20 million Americans had outstanding medical debt in 2021. Among those experiencing health care-related debt nationally, more than 40 percent have fully or nearly exhausted personal savings or taken on credit card debt to cover their medical debts. Other than income and job loss, medical expenses are the highest contributor to personal bankruptcy in the United States. The ultimate impact is significant harm to patients – eight in 10 people with medical debt have deferred needed medical care due to the expense.
Research shows that medical debt relief is a highly bi-partisan issue with strong support from Democratic and Republican leaders. Polling shows 80 percent 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.
People who are eligible do not need to take any action to have their medical debt relieved. Hospitals are working with Undue Medical Debt to notify patients directly if they meet the eligibility requirements. For more information about HASP and North Carolina’s Medical Debt Relief Incentive Program, please see the FAQ and Toolkit for other states interested in implementing similar programs.