NC treasurer's report slams state hospitals for profiting millions from Medicare

North Carolina Treasurer Dale Folwell says although hospitals claim to be losing millions on treating Medicare patients, the new report shows NC hospitals actually profited $151 million on Medicare in 2019 and $66 million in 2020 during the pandemic.

“These hospitals have lost their mission," Folwell said. "They have turned into investment banking [and] real estate development companies."

Hospitals, however, are pushing back on these claims. The NC Healthcare Association calls this report “incomplete” with “misinformation.”

The skyrocketing cost of healthcare has leaders worried about the future of the State Health Plan, which covers 750,000 teachers and other state employees. Folwell said he's worried about runaway inflation when it comes to medical costs — and he is calling on hospitals to be more transparent about what they are charging.

“Number one, we are looking for the hospitals to get rid of their secret contracts," Folwell said. "This is like an onion. It gets bigger and the more we peel it, the more we cry."

Folwell points out many hospitals are given tax-exempt status in exchange for community benefits — like Medicare. He believes hospitals should be spending more of their tax savings on charity care for patients. He’s also calling on hospitals to end the practice of surprise medical billing.

“When we try to inquire what it costs, we are told it’s none of our dang business," he said. "And then, when you don’t pay the bill, you ultimately can be turned into a credit rating agency."

The North Carolina Health Association responded to the report, saying, "This report, like others the Treasurer has commissioned, fails to account for the incredible complexity of our healthcare system, including health insurance companies’ role in rising costs, and does nothing to advance affordable, high-quality healthcare in our state. The reality of the current situation in North Carolina is that a majority of hospitals have negative operating margins this year and that both Medicaid and Medicare reimburse hospitals for caring for patients below the actual costs of providing that care."

The treasurer did acknowledge WakeMed as one of the “good actors” in trying to match its tax-exempt savings with the charity care it gives its patients.