Charity to wipe out $278M of patients’ hospital debt

[June 15, 2021: Celine Castronuovo]

A national charity dedicated to wiping out unpaid medical bills has committed to paying $278 million in patients accrued medical debt at a prominent hospital system in Tennessee and Virginia.

RIP Medical Debt through a partnership with Ballad Health will pay off the medical debt for roughly 82,000 individuals previously served by the health network, according to a Tuesday press release.

The agreement marks the first time RIP will buy out medical debt directly from hospitals, according to Ballad Health.

RIP has historically acquired accounts from debt buyers, collection agencies and other groups in the secondary debt market.

However, a July opinion from the Department of Health and Human Services Office of the Inspector General said that hospitals and physician groups may sell or donate medical debts directly to RIP “for the purpose of abolishing a patient’s liability under certain conditions.”

“Since the completion of our merger in 2018, Ballad Health has implemented a number of new policies and programs to reduce the cost of care for uninsured and under-insured individuals,” Lynn Krutak, Ballad Health’s chief financial officer, said in a statement Tuesday.

“It made sense for us to look at the RIP model to see if we could extend these efforts further,” she added.

The hospital network, which serves 29 counties spanning Tennessee, Virginia, North Carolina and Kentucky, said that letters have been sent to recipients who qualify under the debt relief partnership program, with anticipated delivery dates expected the week of June 28.

Allison Sesso, RIP’s executive director, told The Wall Street Journal Tuesday that some of the bills have followed individuals for as long as 10 years.

“They still owe that money,” Sesso said. “It’s a weight on them.”

The executive director added that as many as 1 in 5 residents in some ZIP codes have Ballad Health debt that will be relieved under the partnership.

Ballad Health specified Tuesday that some individuals with more than one account in the hospital system may only qualify under a single instance of debt, meaning they will still be responsible for meeting payments for nonqualifying accounts.

Ballad Health said that the program is just the latest in a series of moves to help ease the financial burden on patients, including reducing out-of-pocket costs for people who have “incomes up to 450% of the federal poverty level and who have suffered with higher deductibles and co-pays required by insurance companies."

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