RIP Medical Debt to buy $ 278 million in Ballad Health bills

About 82,000 former Ballad Health patients will receive nearly $ 278 million in outstanding bills eliminated under an agreement with a charity that buys and forgives debt.

The agreement with Ballad, a nonprofit system based in Johnson City, Tennessee, marks the first purchase of RIP Medical Debt directly from a hospital. RIP has previously acquired only medical debts from collectors. An HHS of July 2020 Consultative opinion of the Office of the Inspector General opened the door for hospitals to sell or donate direct debts to the group.

“This is really the tipping point for us going forward,” said Allison Sex, RIP’s executive director. “We look forward to working with many more hospitals. Even those who feel they have a very robust charity policy in place should give them a call to review who has escaped the cracks.”

In Ballad, many patients eligible for free or discounted care – known as charity care – do not understand it. In a press release announcing the RIP deal, Ballad’s population health chief said all those who have their debt abolished under the RIP agreement qualify for Ballad’s charitable care policy, but either have not benefited from it before and their circumstances are change.

“By removing this burden of old debt, we hope to engage better with our patients, so we can access care and other services when they need them without fear of unmanageable expenses,” Ballad’s Anthony Keck said in the statement. Ballata did not return a request for comment.

Tax forms for the two health systems that combined to form Ballad in early 2018 show that 37% of patients whose unpaid bills were marked as a bad debt would have qualified for care. financial. Ballad did not disclose this information in its tax form.

Mark Rukavina, head of the Catalyst Community’s Community and Economic Stability Project, said it is unusually high, and wonders why the health care system is not reaching those patients and gave them financial assistance.

“It is incumbent on hospitals that have such numbers to look at their policies and find out why a third of that bad debt has been attributed to patients who have qualified for financial care,” Rukavina said.

One of the reasons for Ballad’s high debt load could be his arduousness application process for financial assistance, Said Rukavina. Patients will be given a detailed breakdown of their monthly expenses, including mortgage payments, electricity, water, food and clothing. There is also a $ 10,000 property limit, not including the patient’s primary residence.

“On the surface, I would say this is a very heavy application,” Rukavina said. “Asking all this information will scare some people.”

Patients whose debt is forgiven will receive letters informing them at the end of June. That probably won’t include the thousands of patients battling for Ballad’s cause. That’s because any debt you buy RIP is free of anything related to the courts, Sex said.

Ballad asks patients aggressively for unpaid bills. It is filed about 5,700 lawsuits against patients in their first fiscal year as a health system.

The benefit of buying debt directly from hospitals instead of debt collectors is more recent, which means less time for collection efforts and patients are less likely to delay future medical care, he said.

“The sooner you have relief and your spine, the mental anguish of trying to figure out how to pay for that, that everything gets relieved sooner,” Sex said. “That’s our goal.”

Some of the RIP bills bought by Ballad are about a decade old, he said.

RIP buys debt at rates that are competitive with debt collection professionals who otherwise sell to sellers, Sex said. She declined to disclose how much RIP paid Ballad for the debt.

In his press release, Ballad noted that he has raised eligibility for full charitable assistance from 200% to 225% of the federal poverty level. Despite this, the health system has fallen short of the terms of its charity requirements mandated by the state in fiscal 2020.

The terms of Ballad’s certificate of public benefit – a state contract that allowed him to train – require him to provide more free or discounted care – known as charity care – and Medicaid is not reimbursed until before the merger. formed the health system. Ballata spent about $ 24 million in fiscal year 2020 on charitable assistance, which is lower than the minimum requirement of $ 38.4 million for that year, the the financial situation of the system shows.

Ballad said it’s partly because Medicaid enrollment has increased over the years, which reduces the demand for charitable care. However, Ballad’s lack of providing care to Medicaid patients was even greater than his charity mission. What was it about $ 36 million in fiscal 2020, well below the $ 67.5 million minimum sent by the state.

Ballad also attributed the lower cost in part to a decrease in patient volumes during the COVID-19 pandemic, the common return among the largest non-profit health systems in the country. Regardless, regulators in Tennessee and Virginia have it asked the health system to verify the access of their patients and demonstrate that uninsured patients are not limited to receiving medical care. That check is due to be completed this year.

Larry Fitzgerald, the officer in charge of monitoring Ballad’s compliance with the COPA, wrote in a letter to state regulators that change to Tennessee’s Medicaid program definitely reduces the number of patients in need of charitable care. Based on this, he stated that Ballad will never be able to provide charitable assistance above the minimum set in 2017. He approved Ballad’s request to waive his charitable assistance requirement in fiscal 2020.

Sex said RIP is in discussions with other health systems who are considering donating and selling their debt to charity. The organization chose Ballad to be first because of a suggestion from a donor, a nonprofit Virginia group called The Secular Society. She said Ballad should receive credit for being the first.

“They took a risk being the first ones here,” he said, “and, frankly, they’re open to a bigger view of their practices, which isn’t always an attractive thing to do.”

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