The Healthcare Access and Stabilization Program (HASP)
NC passed both Medicaid expansion and approved participation in the Healthcare Access and Stabilization Program (HASP). HASP is administered through the Centers for Medicare and Medicaid Services (CMS); this program reimburses eligible hospitals for Medicaid-covered care at a rate closer to the cost of care. This enables hospitals to pay for the non-federal share costs of Medicaid expansion. Payments are calculated based on in-network Medicaid managed care payments to acute care hospitals, critical access hospitals, and hospitals owned or controlled by the University of North Carolina Health Care System and ECU Health Medical Center.
In 2022, 1 in 5 North Carolinians had medical debt in collections. Only 3 other states had a higher prevalence of medical debt in collections.
NC Governor Roy Cooper's initiative
The governor created a HASP initiative with input from hospitals and with bipartisan support; it was approved by CMS in July 2024. Hospitals that opt-in to the program will receive enhanced federal funds from the HASP if they take certain measures to forgive medical debt and bolster charity care. Hospitals that do not opt-in will be eligible for base-level federal funds from the HASP.
11 conditions that hospitals have to meet to be eligible for enhanced HASP payments:
- Debt forgiveness for Medicaid enrollees: Hospitals must forgive all unpaid patient medical debt dating back to 2014 for patients currently enrolled in Medicaid. That includes debts subject to a patient payment plan. Effective date: July 1, 2025.
- Debt forgiveness for low-income patients: Hospitals must forgive medical debt deemed uncollectible dating back to 2014 for patients with incomes at or below 350% of the federal poverty level ($52,710 for an individual or $109,200 for a family of four), as well as for patients for whom the debt exceeds 5 percent of their annual income. Effective date: By March 1, 2025, hospitals must enter into an agreement with Undue Medical Debt (formerly RIP Medical Debt) or another vendor to meet the requirement. The debt relief itself will take longer.
- Automatic charity care for certain patients: Hospitals must automatically qualify patients for charity care if they are homeless, mentally incapacitated with no one to act on their behalf, or enrolled in a public benefit program such as Medicaid, Supplemental Nutrition Assistance Program (SNAP), or the Special Supplemental Nutrition Program for Women, Infants and Children (WIC). Effective date: Jan. 1, 2025.
- Free care and discounts to low-income patients: Hospitals must adopt a financial assistance policy that offers free care to patients with incomes at or below 200% of the federal poverty level ($30,120 for an individual or $62,400 for a family of four), as well as discounts of 50% to 75% for patients with incomes up to 300% of the federal poverty level (45,945 for an individual or $93,600 for a family of four). Effective date: Jan. 1, 2025.
- Presumptive eligibility for financial assistance: Hospitals will develop a process to screen patients for charity care without requiring patients to apply for assistance. Effective date: Jan. 1, 2026.
- Limits to payment plans: Payment plans for individuals with incomes up to 300% of the federal poverty level may not exceed a duration of 36 months with monthly payments no greater than 5% of monthly household income. A payment plan can run for longer than 36 months if the total amount collected doesn’t exceed what would have been collected under a 36-month/5-percent interest plan. Effective date: Jan. 1, 2025.
- Medical debt interest rate: The interest rate on all medical debt held directly by the hospital shall be capped at 3 percent. Effective date: July 1, 2025.
- Limits to debt collection processes: Hospitals must wait 120 days after the first bill has been sent to sell debt to third-parties, and it cannot take the following actions to collect medical debt: arrest, civil contempt/imprisonment, foreclosure, garnishing wages or state income tax refunds. Effective date: July 1, 2025.
- Reporting to credit agencies: Hospitals will not report a patient’s medical debt to a credit reporting agency. Effective date: July 1, 2025.
- Liability for medical debt: No individual except for spouses will be held liable for medical debt owned by the hospital or sold to third parties of any person age 18 and older. Effective date: July 1, 2025.
- Insurance appeals: Medical creditors/debt collectors will not initiate legal action against a patient or refer debts to an external debt collection agency if an insurance appeal or review is pending within the previous 60 days. Effective date: July 1, 2025.
- 99 acute care hospitals had the option to participate, and all hospitals elected to participate.
Concerns
- Rural hospitals may have trouble achieving and maintaining eligibility requirements.
- Policy may "disincentivize" people from getting health insurance and businesses from providing health insurance
- Could then increase cost of commercial insurance
- Unknowns: tax implications, enforcement, support for under-resourced hospitals that want to achieve and maintain eligibility
Works Referenced
