This overview is excerpted from Manatt on Health, Manatt’s subscription service that provides in-depth insights and analysis focused on the legal, policy and market developments.
On July 26, Centers for Medicare & Medicaid Services (CMS) approved North Carolina’s plan to condition enhanced Medicaid payments on hospitals’ participation in a statewide medical debt relief policy initiative. Hospitals that agree to implement a set of medical debt mitigation policies established by North Carolina’s Department of Health and Human Services are eligible for enhanced reimbursement through North Carolina’s Medicaid state directed payment (SDP) program. North Carolina is the first state to use SDPs to incentivize hospitals to address patient medical debt.
To qualify for these enhanced payments, hospitals will be required to:
- Forgive or donate past medical debt for Medicaid enrollees and other low and middle-income patients;
- Provide financial assistance for patients with incomes up to 300% of the federal poverty level; and
- Establish restrictions on billing and collections activities intended to limit medical debt going forward.
