RYE, N.Y.–A national charity said it plans to buy medical debt totaling $278 million, directly from hospitals as it seeks to speed financial relief to patients, many of whom shouldn’t have been billed at all under the hospitals’ financial-aid policies, according to a policy.
RIP Medical Debt, which uses donations to wipe out unpaid medical bills, has reached a deal with nonprofit Ballad Health, a dominant hospital system in Tennessee and Virginia, to buy debt owed by 82,000 low-income patients, according to the Wall Street Journal. Many likely qualified for free care under Ballad’s policy but didn’t get it, executives at Ballad involved in the agreement told the Journal. The patients lacked applications, they added.
According to the report, RIP Medical Debt will abolish the total amount and is expected to notify households of the debt relief this month. Some bills are 10 years old.
“They still owe that money,” Allison Sesso, RIP Medical Debt’s executive director, told the Journal. “It’s a weight on them.”
As many as one in five residents in some ZIP Codes have Ballad debt that will be relieved, according to Sesso.
“Often you’ll see, ‘You might be eligible for financial assistance’ in tiny print, but it’s pretty hard to find,” Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York, told the Journal. “It’s like playing ‘Where’s Waldo.’”
Pennies on the Dollar
Hospitals can sell unpaid bills to debt buyers in the secondary debt market, where RIP Medical Debt typically buys portfolios for pennies on the dollar. Terms of the deal with Ballad weren’t disclosed, the Journal reported.
RIP Medical Debt is seeking to strike more direct hospital deals, Sesso told the Journal, allowing the charity to provide debt relief more quickly.
Ballad hospitals reported about $49.6 million of outstanding debt from patients who likely qualify for financial aid, but who got bills instead, according to its most-recent Internal Revenue Service filings. Ballad wrote off $37.7 million for patients who qualified for financial aid in the same year, according to the Journal.