For patients Atrium Health sued over unpaid medical debt, relief is coming
Help is coming for the many people that North Carolina’s largest hospital system sued for not paying their medical bills.
Atrium Health says it will forgive medical debt and lift the liens it holds on their homes, a move expected to help thousands of North Carolinians.
It’s part of a just-announced decision by Advocate Health, Atrium’s parent organization, which will cancel liens on more than 11,500 homes in North Carolina and five more states, Advocate told The Charlotte Observer Thursday. Some of those liens date back 20 years or more.
Atrium, a nonprofit health system based in Charlotte, owns Carolinas Medical Center and more than three dozen other hospitals. For years, it filed thousands of debt-collection lawsuits against patients — and obtained liens on many of their homes.
Atrium quietly stopped suing patients in late 2022. Even after that, however, the liens remained, allowing the hospital to collect what it said it was owed when those patients died or sold their homes.
Now the hospital system will begin lifting those liens, Advocate said in an email. Removing the liens will require legal work, and it may take several months to cancel them all. The hospital system will cancel the oldest liens first, Advocate officials said.
Advocate Health said the move is “part of a multi-year initiative to overhaul the system’s approach to medical debt.” Previously the system stopped reporting delinquent medical debt to credit agencies, made it easier for patients to qualify for charity care, and automatically qualified more people for financial assistance.
“When we expanded our charity care policy, we immediately began assessing all previous outstanding liens and determined that most of those patients would qualify under our new policy,” said Brad Clark, chief financial officer of Advocate Health. “As the next step in our roadmap to make care more affordable, we are accelerating this process and removing judgment liens that were placed on homes and property to cover unpaid medical bills.”
Phone call brings relief
That’s welcome news to Terry Belk.
When his late wife, Sandra, was diagnosed with breast cancer years ago, the couple had health insurance. But they were still left with $23,000 in medical bills that they couldn’t pay.
In 2005, at the urging of a hospital lawyer, the couple agreed to sign a deed of trust to their east Charlotte home. That meant Atrium Health’s debt and attorney fees had to be paid before the Belks could sell their house.
About five years later, Belk was diagnosed with prostate cancer and was hit with more hospital bills. Atrium sued to collect about $7,000 and got a lien on the three-bedroom home.
Belk said the hospital debt haunted his wife until she died in 2012. She was so concerned that she was reluctant to go back to the hospital when her cancer returned, Belk said. Hoping to ease her worries, Belk began hiding Atrium’s bills from her.
Belk says the medical bills have damaged his credit and forced him to delay retirement. At age 68, he continues working as a car salesman.
On Tuesday, a phone call brought him relief. An Atrium vice president called to inform him that the hospital system will be releasing the financial claims it has on his home, he said.
“I was ecstatic,” Belk said. “I’m not a person of great means. And this puts a strain on a person.”
After years of criticizing Atrium for its debt collection practices, Belk this week had more positive things to say about the hospital system.
“I think it’s wonderful,” he said. “It’s going to alleviate a lot of stress for people who are sick. For people who are sick, that’s the last thing they need to worry about.”
Move follows years of scrutiny
The decision to cancel liens follows intense news coverage, and years of criticism from patient advocates and civil rights groups who contended the system’s debt-collection practices were too aggressive.
A 2012 investigation by The Charlotte Observer and the News and Observer found that nonprofit hospitals in North Carolina often strayed from their charitable missions.
Although they received billions in tax breaks, many nonprofit hospitals returned relatively little to the public in the form of charity care and other community benefits. Some, including Atrium, sued thousands of patients who didn’t pay bills.
State Treasurer Dale Folwell, a frequent critic of nonprofit hospitals, has in recent years released a series of reports that have come to similar conclusions.
Atrium sued almost 2,500 patients from 2017 to 2022, according to a report done by Folwell’s office and Duke Law School faculty last year. The average court judgment that the system obtained against patients: nearly $23,000. Other hospitals in the state filed more than 3,400 additional lawsuits.
In a statement issued yesterday, Folwell said:
“I am glad that Atrium is finally doing the right thing by cancelling medical debt and the punishing liens they have put on people’s homes. Unfortunately, it comes after many lives have already been ruined and thousands were thrown into generational poverty.”
Atrium had more than $5 billion in revenue last year — and more than $230 million in profit, according to its latest annual financial statement.
Advocate Health, the nation’s third largest nonprofit health system, owns hospitals in the Carolinas, Georgia, Alabama, Illinois and Wisconsin. It now serves more than 5 million patients. The system reported more than $31 billion in revenue and $2.2 billion in profit last year.
Advocate’s decision to lift liens also comes on the heels of a new plan, led by state health officials, that will erase hospital debt for up to two million North Carolinians.
