New North Carolina law targets medical debt

A new bill in North Carolina allows the state to take all or some of a patients tax return to cover medical debt.

Unpaid medical debt can greatly affect a hospital or practice's ability to provide patients with quality medical care. Each year, these unpaid bills amount to millions of dollars in losses that many area hospitals are unable to sustain.

In an effort to protect hospitals from these losses. the North Carolina State House has passed a bill aimed at increasing collections. The State Offset Debt Collection Act (SODCA) allows state agencies to collect on unpaid medical debt by taking some or all of a patients tax refund or lottery winnings. 

Many of the major care providers in North Carolina are facing problems of mounting debt. The Brody School of Medicine currently has $20 million in unpaid patient charges, and supports the bill as a means of protecting the facility's ability to provide care. 

"With the changes in health care reimbursement that is going on nationally, it is inevitable what we're able to do here at Brody and at ECU Physicians is going to change," Nicholas Benson, the Vice Dean of the Brody School of Medicine, told local news source WNCT.com.

Currently, the Brody School of Medicine allows a patient 90 days to make a payment before sending the bill to a collections agency, which is fairly standard practice for the industry. If the bill still is not paid, the North Carolina Department of Revenue is authorized by the new bill to take the full or a partial amount from the patient's state tax refund and lottery winnings.

While this bill may provide relief to facilities in North Carolina, many hospitals and practices across the country are still struggling with insurance claims management. These providers can benefit from outsourcing receivables management to Professional Medical Services.