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Article Link: States Move to Protect Hospital Patients from Heavy Medical Debt - WSJ

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More states are imposing new limits on hospital billing practices, making fresh attempts to help patients avoid heavy medical debts.

At least 10 states, including Connecticut, Maryland, New Mexico and Maine, enacted laws last year with a range of provisions affecting healthcare providers and collection agencies, including requirements for hospitals to provide financial assistance to people with low incomes or limit aggressive debt-collection practices. Other states, including Washington and Vermont, are currently considering bills to add or bolster consumer medical-billing protections.

The activity is a sign of the heightened scrutiny that hospitals are facing after reports about bare-knuckle tactics used to collect on medical debts and after some facilities' own disclosures of high prices and limited financial assistance for certain patients.

North Carolina's treasurer, Dale Folwell, a Republican who has been critical of hospitals in his state, recently released a report that faulted hospitals for billing poor patients and falling short on charity-care obligations.

"They are not doing enough for the lower- and fixed-income people of our communities," he said in an interview. State lawmakers said they planned to follow up on the findings.

The North Carolina Healthcare Association said nonprofit hospitals were "proudly fulfilling their charity care and community benefit commitments to North Carolinians."

State officials are focusing on the issue, as evidence grows that despite expanded health coverage under the Affordable Care Act, many Americans are unable to pay their medical bills.

Some 19% of U.S. households had medical debt, with the share higher among Black and Hispanic householders, according to a Census Bureau analysis released last April, based on 2017 data. The median amount owed was $2,000.

Medical bills are the biggest source of debt in collections, larger than all other types of debt combined, including credit cards and utilities, according to an analysis of a sampling of credit reports from TransUnion published in the Journal of the American Medical Association last July.

The study estimated $140 billion in medical debt in collections, but said the projection was limited to the debt reported to TransUnion, one of the three major credit-reporting agencies.

Healthcare prices, as well as insurance plans that can require patients to pay large sums out of their own pockets, have contributed to the debt levels, according to health economists and consumer advocates.

Data first disclosed last year by hospitals have revealed the variety of prices that the facilities can charge for the same service, depending on who is paying, with some of the highest rates often going to uninsured patients.

Hospitals have also disclosed that some patients don't get financial assistance even though they are eligible. Hospitals say this happens when patients fail to apply, but consumer advocates say the process can be unclear and daunting.

The American Hospital Association said hospitals have provided more than $700 billion in uncompensated care since 2000, as well as offering many other forms of community benefit.

"The hospital field does more than any other part of the healthcare sector to support patients from all backgrounds," giving treatment regardless of their ability to pay," said Stacey Hughes, an executive vice president at the association.