By Michelle Crouch | The Charlotte Ledger | North Carolina Health News
Earlier this year, Trinity Moravian Church in Winston-Salem received national attention for doing something extraordinary: It erased nearly $3.3 million in medical debt for 3,355 local families living below the poverty line.
The tiny church, with an average attendance of about 75 on Sundays, did it by raising $15,000 and partnering with RIP Medical Debt, a national nonprofit that buys unpaid medical debt and forgives it.
RIP Medical Debt has wiped out billions of dollars in medical debt across the country in less than a decade. Recent campaigns in North Carolina have benefited residents in Davidson, Forsyth, Durham, Orange and Wake counties.
But when retired Atrium Health physician Chris Lakin contacted RIP to see about launching a campaign to forgive debt for Charlotte residents, the charity said it wasn’t possible.
Why? Because RIP hasn’t been able to purchase enough qualifying medical debt in Mecklenburg County, RIP spokesman Daniel Lempert said.
The problem is not a lack of medical debt in Charlotte. Rather, the issue is that Atrium Health and Novant Health — the area’s two big hospital systems — haven’t been willing to sell or donate their bad debt to RIP.
“If we can’t get our hands on it, we can’t abolish it,” Lempert said.
With health care costs escalating, nearly seven in 10 U.S. adults have received a medical bill they could not afford, according to an August 2023 poll commissioned by RIP, along with the American Cancer Society and the Leukemia and Lymphoma Society. The poll also found that about half of U.S. adults don’t realize that health care providers offer financial assistance.
Medical debt is an especially acute problem in Mecklenburg County, where 18 percent of families have medical debt in collections, compared to a national average of 13 percent, according to data compiled by the Urban Institute.
Nationally, two-thirds of bankruptcies cite medical debt as a cause.
Atrium’s and Novant’s unwillingness to work with RIP baffles Lakin, who sees an opportunity to change people’s lives in a significant way, with some positive public relations for the hospitals.
“Here is a chance to do some good,” Lakin said. “I believe it would be a win-win for the hospital, and they wouldn’t even have a conversation with RIP.”
The hospitals said they already have charity policies and financial assistance programs to serve patients. Atrium also said that the community would be better served by directing one-time funds toward other programs, and that working with RIP could undermine efforts to get people to sign up for Medicaid.
The RIP model
RIP Medical Debt was founded in 2014 by two former debt collectors who saw a new way to help those in need. Their idea was simple: Buy up large bundles of delinquent medical debt, which gets sold at pennies on the dollar — the same way third-party debt collectors do. But instead of aggressively pursuing patients for payment, they send patients a letter telling them that their debt has been forgiven.
The nonprofit abolishes debt for individuals who earn less than 400 percent of the federal poverty level — about $120,000 for a family of four — or whose debts exceed 5 percent or more of their annual income.
On average, a $1 donation to RIP erases about $100 in debt, the charity said.
Most RIP campaigns have been launched by charitable organizations that want to help people in their communities who are under financial stress. But governments have also gotten involved. Local officials in Cook County, Illinois (which includes Chicago), and Toledo, Ohio, used federal COVID relief funding from the American Rescue Plan Act to erase millions in medical debt in their communities.
More recently, New York City cancer patient Casey McIntyre made international news after she set up an RIP Medical Debt fund to cancel others’ medical debt as a parting gift after her death on Nov. 12, 2023. So far, her campaign has raised more than $800,000 and canceled more than $60 million in debt nationwide.
Hospitals: We already have charity policies
Lempert said a Charlotte church ran an RIP campaign in 2019, before the charity could buy directly from hospitals, that erased the Charlotte debt that was available on the secondary market. To make a bigger dent, RIP would need the hospitals — which dominate the local health care market — to release more, he said.
In emailed responses to questions from The Ledger/NC Health News, Novant and Atrium both said they already have generous financial assistance and charity care policies that serve patients.
“We work alongside our patients to manage the cost of care, including providing care at no cost to our uninsured patients with a household income of up to 300 percent of the federal poverty level through our robust financial assistance policy,” the Novant statement response read. “This policy covers about 90 percent of all uninsured patients. The remaining 10 percent of uninsured patients receive individualized support, including significant discounts and interest-free payment plans for those who need the option of paying their balance over time.”
Atrium Health said it offers “robust, equitable and long-term support to patients of all income levels” and proactively helps patients enroll in Medicaid or other health insurance options.
“We believe our policies and practices afford patients and our communities a better long-term and ongoing solution to addressing and preventing medical debt,” the hospital added.
Atrium also claimed the community would be better served by directing one-time funds toward other needs such as public health initiatives that focus on improving health in the region. (Read Atrium’s answers to our questions andfull statement.)
Marcus Kimbrough, who handles government affairs and community engagement for Atrium in the greater Charlotte area, sent a similar response via email to Lakin.
“RIP’s proposal is well-intended but conflicts with our charity care policy (which is thoughtfully crafted to be consistent, fair and equitable) and may undermine efforts to promote enrollment in insurance coverage, which is particularly important right now due to Medicaid redeterminations,” the email said.
Both Atrium and Novant noted in their responses to The Ledger/NC Health News that they don’t sell bad debt to debt buyers. (Hospitals that don’t sell their debt often contract with a secondary collection agency that tries to collect bad debt on their behalf. That appears to be Atrium’s practice, per its billing and collections policy.)
RIP: Program would supplement, not conflict
In response to the hospitals’ concerns, RIP said its program would supplement their financial assistance programs, not conflict with it.
While Atrium and Novant give free care to uninsured families who meet their requirements and earn up to 300 percent of the federal poverty level, RIP assists families who earn up to 400 percent. In addition, RIP said, some patients don’t know that hospitals offer assistance, may be too proud to apply or may assume they aren’t eligible because they have insurance.
"Hospitals don’t find everyone who qualifies for financial assistance, and working with RIP Medical Debt is like a safety net for accounts that weren’t found, or perhaps didn’t qualify because of geography or other limitations in the existing policy,” said Ruth Lande, RIP’s vice president for hospital relations.
RIP can then give hospitals valuable, confidential data on the income level and circumstances of patients with bad debt, she added, allowing them to consider changes to their financial assistance policies to catch those patients.
Lande noted that RIP works with other hospitals that don’t sell bad debt. She said RIP offers an “industry-competitive” rate for debt that is intended to be financially appealing to hospitals, even if they don’t normally sell their debt.
“Most of these accounts are not collectible, it’s mostly people who are unable to pay, so it is a good deal (for hospitals),” she said.
If the hospitals work with RIP, it should not dissuade people from enrolling in Medicaid or insurance on the Affordable Care Act insurance exchange, Landes said, because RIP provides help long after patients have made decisions about purchasing insurance.
“We would be canceling older debts for lower income individuals, and the letter (to those patients) clearly states this is a one-time gift funded by the local community,” Lande wrote in an email. “Why would a person who gets that letter decide to cancel their insurance or not sign onto insurance?”
She said many patients helped by RIP already have insurance but can’t afford out-of-pocket expenses.
A 2022 study by a consulting firm found that the majority of hospital bad debt, 57 percent, is for patients who have insurance — a five-fold increase from 2018. The study attributed the change to the increasing prevalence of high-deductible plans and other insurance options that push more costs onto patients.
A growing number of hospitals work with RIP
Initially, RIP bought debt only from secondary providers such as debt collectors and debt buyers. However, the nonprofit started buying directly from hospitals in 2020 after a federal ruling clarified that the practice was allowed.
Since then, RIP has increasingly sourced its debt directly from health systems, Lempert said.
“We have a very dedicated hospital relations team doing a lot of work to explain our model to the revenue cycle folks at hospitals,” he said. “A fair amount of education has to happen. Every day, we are bringing more into the fold.”
Some hospitals — such as Georgia-based St. Mary’s Health Care System, Connecticut-based Trinity Health and Tennessee-based Ballad Health — have capitalized on the public relations value of their work with RIP and issued news releases about it.
“Everyone who will receive their debt abolished through this collaboration with RIP Medical Debt qualifies for our charity care policy, but for various reasons, they did not take advantage of it in prior years, or their circumstances have changed, leaving many without assistance,” Ballad Health executive Anthony Keck said in a 2021 news release. “By removing this burden of old debt, we hope to better engage with our patients, so they access care and other services when they need them without the fear of unmanageable expenses.”
Retired physician hits roadblocks
Lakin, a pediatrician who retired from Atrium in 2018, said he’s still trying to get his former employer to reconsider and work with RIP Medical. He sent RIP’s responses to Kimbrough, who he said didn’t respond despite a follow-up. He also emailed an Atrium physician executive about the program; she responded by emphasizing the hospital’s charity care program.
Then, Lakin looked for a way to get in front of the board of the Charlotte-Mecklenburg Hospital Authority, the public entity that does business as Atrium Health.
However, a spokesman said the board does not allow public comment and did not offer an alternative way to contact the board, according to Lakin. An email Lakin sent to a physician on the board went unanswered.
Lakin then contacted several Mecklenburg County commissioners. He said he thought they might have some influence over Atrium, since it is a public hospital authority.
Mecklenburg County Board of Commissioners Chair George Dunlap, who approves appointments to the hospital authority board, said that despite Atrium’s public charter, the county can’t tell the hospital what to do.
“The decision to sell medical debt is solely the decision of the board of directors of Atrium,” he said. “We don't have any say. We can't force the hospital to sell it. That’s not our role.”
County Commissioner Laura Meier told The Ledger/NC Health News that she doesn’t understand why Atrium is opposed to working with RIP Medical, but beyond connecting Lakin to a contact at Atrium, she didn’t know how the county could help.
“I told Dr. Lakin, ‘The county just doesn’t have influence over the hospitals,’” she said.
(Read Lakin’s email exchanges with Atrium here)
Elected officials in Milwaukee County, Wis., ran into similar obstacles when they tried to work with RIP.
After they announced that they were going to leverage $1.6 million in federal COVID relief money to eliminate $153 million in local medical debt by partnering with RIP, the area’s four major health care systems – including Atrium partner Advocate Aurora Health – would not cooperate, according to a local news report.
A debt-burning ceremony that went viral
John Jackman, pastor of the Winston-Salem church that works with RIP, said Trinity Moravian has hosted three “Debt Jubilee” fundraisers so far, abolishing a total of more than $8 million in medical debt for 7,222 families in Forsyth and nearby counties. (It’s now running a fourth fundraiser to benefit Wake County residents.)
Jackman said the response has been like nothing he has seen in “all my years of ministry.”
“Usually, I have to twist arms and make calls, but the money just flowed in,” he said. “For the first one, we set it up for six weeks, and we had all the money in two weeks. … I think it’s because almost everybody has a horror story about medical billing, or they know someone with a horror story. It just hit a lot of buttons for people.”
A video of a “debt burning” celebration after the church’s second campaign went viral on social media last April, racking up 28.8 million views on X, 13.5 million on TikTok, and national coverage from outlets including CNN, The New Yorker and MSNBC.
No more debt to buy
Trinity Moravian’s campaigns were so successful that they wiped out all of the qualifying medical debt that RIP could obtain in central North Carolina, Jackman said.
Then, Jackman said, he ran into the same problem that Lakin had in Charlotte. Wake Forest Baptist Health is now affiliated with Atrium and would not sell its debt to RIP. Neither would Novant, Winston-Salem’s other large health system.
Jackman said he had discussions with people at Atrium Health Wake Forest Baptist who were interested in releasing some debt to RIP, “but they had to go up the line to Atrium for a decision ... and it evaporated when it got up to the higher levels.”
Jackman said he was told Atrium believes its internal charity programs are doing enough. He disagrees.
“They are not doing anywhere near what needs to be done,” he said. “I don’t understand it from a business point of view. If I was a hospital executive looking for some good spin on my hospital system, I would do this in a heartbeat.”
Correction: An earlier version of this story incorrectly characterized a statement from Novant Health about why it does not work with RIP Medical Debt. The hospital said it doesn’t sell its debt and that it already has a charity care program to serve patients.
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