Advocate Health, the nation’s third-largest nonprofit health system, announced it would vacate more than 11,500 debt judgments it holds against people who failed to pay their medical bills.
The move comes after more than a year of public scrutiny of the hospital conglomerate’s aggressive debt collection practices, including news articles by the Guardian and other news organizations, and a study by Duke University School of Law and the North Carolina State Treasurer. I was disappointed. The chain is headquartered there.
The study, released in August 2023, found that the hospital group filed more debt lawsuits against patients (2,482) than any other hospital system in the state between 2017 and 2022. It turned out.
Advocate Health, which operates under the name Atrium Health in North Carolina, South Carolina, Georgia and Alabama, called the debt cancellation effort “a bold step to address medical debt.” The company announced it would cancel all liens held on homes and other real property owned by indebted patients and forgive all debts related to those liens.
This debt forgiveness will help patients like Terry Belk, 68, a used car salesman from Charlotte, North Carolina. He has been sued twice by the hospital system, including in 2005 for more than $23,000 to pay for his late wife’s breast cancer treatment. In 2010, he paid $7,000 for his prostate cancer treatment.
His case drew national attention to the hospital group’s debt collection methods after the Guardian newspaper and Charlotte television station WTBV reported on his ordeal last year. His story was featured again in an NBC News report earlier this month. Days later, Atrium’s parent company, Advocate Health, announced it was canceling the debts of Belk and thousands of other patients.
“I was so happy and ecstatic” after hearing the news, Berg said. “But at the same time, I would like to see a law put in place to prevent them from doing something like this,” he said. “Right now, that’s Atrium’s policy. It’s good policy, but it could change at some point.”
North Carolina State Treasurer Dale Falwell announces debt forgiveness as Advocate Health CEO Gene Woods and other leaders grapple with fallout from hospital group’s debt collection tactics He said the responsibility does not end.
“Repent doesn’t just mean stopping, it means turning around,” Falwell said. “Gene Woods and the board will go back and figure out how much harm they have done to patients through these practices over the decades.
“The fact is that Atrium is doing this because they got caught, and because of the sunlight, and because people are trying to catch them months, even years later. Falwell added that he had placed a lien on his property without telling him.
In response to questions from the Guardian, an Atrium spokesperson said Mr Falwell’s comments were “neither accurate nor fair”. We are on a continuous journey to make health care more affordable and accessible to all. ”
The hospital group said in a statement about its debt relief plan that previous policy changes aimed at reducing medical debt include the decision to stop reporting medical debt to credit bureaus and This included expanding financial assistance programs, he said.
Brad Clark, Advocate Health’s chief financial officer, said in a statement that when the chain expanded its charity care policy, it “immediately began evaluating all past unpaid lien holders and “We have determined that most of our patients are eligible under our new policy.” As the next step in our roadmap to make health care more affordable, we will accelerate this process and remove judgment liens that have been placed on homes and real estate to cover unpaid medical bills. Masu. ”
The hospital chain said patients do not need to take any action to have their liens removed. “Advocate Health is working to resolve cases both old and new.” “We will communicate with the individuals named in the lien at the appropriate time. may take some time.”
It’s unclear whether the liens Advocate is seeking to cancel span multiple states or are located primarily in North Carolina. In addition to our operations in four southern states, we operate in Wisconsin as Aurora Health Care and in Illinois as Advocate Health Care. The chain said it will waive liens “across the territory it serves.”
Roughly 1 in 10 North Carolinians have medical debt, according to an Urban Institute analysis. White communities and communities of color do not share the burden equally. In Mecklenburg County, where Atrium is headquartered, 12% of people in communities of color collect medical debt, compared to just 5% of white communities.
“Regardless of how[Americans]feel about every other topic in life, there is something wrong with this system when people have a greater fear of the bill than they do of the process,” Treasurer Falwell said. “Everyone knows there is a problem.” .
Debt judgments are particularly punitive in North Carolina, and the judgment automatically creates a lien on the property. This makes it impossible for the debtor to sell, buy, or refinance the home without paying off the lien.
In addition, Atrium instructed its attorneys to pursue maximum interest (8% per annum) against the debtor. That means some debtors ended up paying much more than their original hospital bills.
Many of the liens held by Atrium are more than 10 years old, so many debtors are already affected. Medical debt is the leading cause of bankruptcies in the United States, and debt judgments can severely impact your credit score, which is used by everyone from landlords to employers.
“My credit is still affected by this,” Berg said. “There’s still a lot of the aftermath of when they first did it.” In Berg’s words, “the blood is still fresh.”
Berg, whose experience has made him an unofficial spokesperson for people struggling with oppressive medical debt, said there is more work to be done by U.S. hospitals and public officials to combat the problem.
“Is it fair that we are the richest country in the world and yet we penalize people for getting sick and seeking medical care?” he asked.
