According to nine metrics Forbes surveyed in a 2024 study, North Carolina suffered from the highest healthcare costs in the nation. In an effort to relieve this plight, the state legislature recently passed H434, the “Lower Health Care Costs Act.”
So overwhelming was the measure’s popularity, it garnered a 109-1 vote in the House and a 42-3 vote in the Senate. The bill betters multiple problematic laws, although it still fails to ameliorate some long-standing issues that need future attention.
Price Transparency
Healthcare businesses in the United States receive numerous taxpayer subsidies and therefore have the legal obligation to adhere to the strictest transparency standards, particularly in charges for their services. H434 contains numerous provisions related to cost and billing clarity for patients.
In one notable positive example, facilities must now “provide good faith estimates and not send unpaid amounts to collections unless a line-item bill has been provided.” Patients have long been unpleasantly shocked and befuddled by unexpected charges. Due to the often urgent and even life-threatening circumstances of healthcare decisions, patients sometimes have little choice but to accept care with no prior knowledge of the final price.
Furthermore, in-network hospitals must inform patients in both emergency situations and several non-urgent circumstances that some services may be billed separately. These hospitals also must explain that they may utilize out-of-network providers, whom they must identify by name, and they must explain what coverage protections this may remove from the patient.
Perhaps most importantly, H434 imposes a specific penalty for failure to comply. The responsible facility will pay a daily fine of at least .01% of the hospital CEO’s annual salary, although not more than $2,000 per infraction. Although this may sound insignificant, it will quickly add up for repeat offenders with each failure.
Certificate Of Need Changes
Many states, including North Carolina, have struggled for decades with certificate of need (CON) laws. These mandates enable current providers to shut prospective practitioners out of the market, simply by convincing CON boards that no new providers are necessary in their region. This results in decreased care availability and increased prices.
North Carolina is second only to Hawaii in the number of medical services subject to these restrictions. It has regulations limiting 27 types of providers and procedures (compared to 28 in Hawaii). This affects nearly every aspect of health care.
H434 makes an incremental inroad in this mammoth problem by removing CON restrictions on the major aspects of rehabilitation resources. This includes related facilities, any additional beds, and the rehabilitative care services themselves.
Although this move constitutes progress, it can hardly be considered a large step. The doctors and patients involved in all procedures still covered by remaining restrictions need more action. According to Sen. Jim Burgin, who has extensive experience serving on a hospital board, hopeful providers usually must spend $500,000 and two years to obtain a certificate.
A Mixed Bag
Ultimately, H434 delivered a decidedly odd blend of results. The powerful hospital organizations that hold so much political sway received many appropriate restrictions. On the other hand, they retained their inappropriate sway in restricting their fellow providers. Fortunately, more related legislation is pending, and legislators have an obligation to make far more progress than H434 accomplished.