North Carolina hospitals billing patients eligible for charity care

Nonprofit hospitals in North Carolina bill patients eligible for charity care for millions of dollars in medical care each year, according to a Jan. 25 report from the office of the state treasurer.

The report found that an average of 11.9 to 28.7 percent of bad debt for North Carolina hospitals came from patients who were billed and unable to pay but were eligible for free or discounted charity care based on the nonprofit hospital policies. This compares to the national average of 10 percent.

Under the ACA, nonprofit hospitals must provide free or discounted charity care to poor patients or jeopardize their tax-exempt status. The report also found that the majority of nonprofit hospitals in North Carolina failed to provide enough charity care to equal tax breaks valued at more than $1.8 billion in 2020. 

The report named the five hospitals in the state that had the highest percentage of bad debt that was from patients likely eligible for charity care: 

1. UNC Rockingham Health Care (Eden) — 95.7 percent 

2. Randolph Health (Asheboro) — 85 percent

3. Scotland Memorial Hospital (Laurinburg) — 78 percent 

4. Chatham Hospital (Siler City) — 66.6 percent

5. Caldwell Memorial Hospital (Lenoir) — 66.1 percent

Hospitals often defend low charity care spending by pointing to how much they spend on other benefits or underpayments by Medicare and Medicaid.

"A closer look at hospital systems' own community benefit reports reveals troubling problems with this defense," the report says.

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