by Michelle Crouch and Charlotte Ledger, North Carolina Health News
October 29, 2024

By Michelle Crouch

Co-published with The Charlotte Ledger 

Five hospitals responsible for nearly all of North Carolina’s lawsuits filed against patients for medical debt have committed to erasing all of their existing judgments, The Charlotte Ledger/NC Health News has learned.

Atrium Health, the state’s largest health care system, announced in September that it would clear old judgments and lift liens against thousands of patients. It had quietly stopped filing medical debt related lawsuits in early 2023.

This week, four other systems — Gastonia-based CaroMont Health, Asheville-based Mission Health, Sampson Regional in southeastern North Carolina and Community Health Systems, which owns Lake Norman Regional Hospital in Mooresville — confirmed that they’re either in the process of taking a similar step or have already done so.

Together, the five systems accounted for 96 percent of the medical debt lawsuits in North Carolina between 2017 and mid-2022, according to a 2023 report by the state treasurer’s office and Duke University Law.

During that time period, according to the report, those hospitals filed a total of 5,922 medical debt lawsuits and won $58.7 million in judgments, with an average judgment of $16,623.  

In North Carolina, medical debt judgments can last for 20 years and automatically place liens against patients’ homes, allowing hospitals to collect when the home is sold or the owner dies. They also accrue 8 percent interest per year as long as they remain unpaid.

The release of those judgments means patients can sell their homes without worrying about the outstanding debt.

As a growing number of Americans grapple with medical debt, hospitals nationwide have come under fire for their aggressive collection practices. About one in five North Carolina residents has medical debt in collections, one of the highest rates in the country, according to an analysis by the Washington, D.C.-based Urban Institute.

Nonprofits sent letter to hospital CEOs

Rebecca Cerese, health policy advocate for the NC Justice Center, said her organization was one of 26 nonprofits that signed a September letter sent to the presidents of CaroMont, CHS, Mission Health (now owned by HCA Healthcare) and Sampson Regional, asking them to follow suit after Atrium’s announcement.

They got no response to the letter, Cerese said, so she was happy to hear that the hospitals were forgiving the debt. 

“We’re so excited that these hospital systems are realizing the detrimental impact that these liens have on people,” she said. “People build generational wealth through their homes. They should not be losing that because they got sick or had an accident.”

Most of the hospitals said they recently ended the practice of suing patients and are in the process of clearing judgments and removing liens. 

CaroMont Health, which filed the second highest number of medical debt lawsuits behind Atrium, stopped pursuing liens in September “to align with the letter and spirit of the state’s medical debt relief program,” spokeswoman Meghan Berney said.  

The state’s new medical debt relief program requires hospitals to forgive medical debt dating back to 2014 for low- and middle-income patients and to beef up their charity care policies — in return for billions of dollars in federal money. 

HCA Healthcare started releasing judgments associated with Mission Health when it acquired Mission in 2019, according to spokeswoman Nancy Lindell. The Nashville-based for-profit system does not file lawsuits related to medical debt, Lindell said. 

Patients celebrate

The hospitals said affected patients do not need to take any action. Lifting the liens would take time to complete, they said, because it requires coordination with courts in multiple jurisdictions.

For Lionel and Brenda White, the relief came about two weeks ago when they received a letter from Atrium that the hospital system was canceling its $50,529 lien on their Charlotte home.

The debt, which came from Lionel’s three-day stay at Carolinas Medical Center in 2018, was more than either of them makes in a year.

Last year, after learning Atrium had stopped suing patients, the couple reached out to an Atrium attorney to see if their debt could be cleared, but at the time he told them they were out of luck, they shared with the Ledger/NC Health News.

When they got the recent letter, they were overjoyed.

“Everything was canceled,” Brenda White said. “We were like, ‘Thank God.’ We didn’t need that hanging over our heads. I don’t know who could pay that kind of money. So we feel a lot of relief.”

This article is part of a partnership between The Charlotte Ledger and North Carolina Health News to produce original health care reporting focused on the Charlotte area. 

You can support this effort with a tax-free donation. 

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