One thing few people realize is that medical debt is generally considered joint debt in North Carolina under the “Doctrine on Necessaries.” That means you are generally responsible for the medical bills of your spouse. This can pose real problems and allow a medical provider to obtain a lien against a martial residence owned jointly that otherwise would be exempt under Tenancy by the Entireties in NC. (But See NCGS 131E-91 below) Furthermore this can also extend to medical debt incurred by minors.
Generally speaking there is a three (3) year statute of limitation for medical debt in North Carolina. That being said, few providers wait that long to sue. In fact many medical providers in NC such as Novant have a generally policy against filing a lawsuit for unpaid medical bills. That does not mean they won’t have debt collectors harass you for payments. Carolinas Medical Center or “CMC” does on occasion sue patients and sometimes their spouse for medical treatment. I have even seen a widow sued for $80,000.00 after her husband died in the hospital. Talk about asking for a counter-suit for medical malpractice.
So what can you do to protect yourself? For one- do not sign anything when taking a friend or relative to the hospital in which you guarantee payment. Second make sure you do not cancel health insurance on a spouse until after divorce. Some attorneys even recommending filing a separation agreement with the Register of Deeds to put hospitals on notice that you are not responsible for his/her medical bills. Third, realize that if you are sued you may be able to argue the medical treatment was not necessary depending on the nature of the care.
The following statute is new as of October 2013 and is poorly written and not yet applied by the Courts. Certainly it should be raised as a possible defense, but is far from a sure bet as a defense to doctrine of necessaries.
§ 131E-91. Fair billing and collections practices for hospitals and ambulatory surgical facilities.
(a) All hospitals and ambulatory surgical facilities licensed pursuant to this Chapter shall, upon request of the patient, present an itemized list of charges to all discharged patients detailing in language comprehensible to an ordinary layperson the specific nature of the charges or expenses incurred by the patient. Patient bills that are not itemized shall include notification to the patient of the right to request, free of charge, an itemized bill. A patient may request an itemized list of charges at any time within three years after the date of discharge or so long as the hospital or ambulatory surgical facility, a collections agency, or another assignee of the hospital or ambulatory surgical facility asserts the patient has an obligation to pay the bill. Each hospital and ambulatory surgical facility shall establish a method for patients to inquire about or dispute a bill.
(b) If a patient has overpaid the amount due to the hospital or ambulatory surgical facility, whether as the result of insurance coverage, patient error, health care facility billing error, or other cause, and the overpayment is not in dispute or on appeal, the hospital or ambulatory surgical facility shall provide the patient with a refund within 45 days of receiving notice of the overpayment.
(c) A hospital or ambulatory surgical facility shall not bill insured patients for charges that would have been covered by their insurance had the hospital or ambulatory surgical facility submitted the claim or other information required to process the claim within the allotted time requirements of the insurer.
(d) Hospitals and ambulatory surgical facilities shall abide by the following reasonable collections practices:
(1) A hospital or ambulatory surgical facility shall not refer a patient's unpaid bill to a collections agency, entity, or other assignee during the pendency of a patient's application for charity care or financial assistance under the hospital's or ambulatory surgical facility's charity care or financial assistance policies.
(2) A hospital or ambulatory surgical facility shall provide a patient with a written notice that the patient's bill will be subject to collections activity at least 30 days prior to the referral being made.
(3) A hospital or ambulatory surgical facility that contracts with a collections agency, entity, or other assignee shall require the collections agency, entity, or other assignee to inform the patient of the hospital's or ambulatory surgical facility's charity care and financial assistance policies when engaging in collections activity.
(4) A hospital or ambulatory surgical facility shall require a collections agency, entity, or other assignee to obtain the written consent of the hospital or ambulatory surgical facility prior to the collections agency, entity, or other assignee filing a lawsuit to collect the debt.
(5) For debts arising from the provision of care by a hospital or ambulatory surgical center, the doctrine of necessaries as it existed at common law shall apply equally to both spouses, except where they are permanently living separate and apart, but shall in no event create any liability between the spouses as to each other. No lien arising out of a judgment for a debt owed a hospital or ambulatory surgical facility under this section shall attach to the judgment debtors' principal residence, or, if the land upon which the principal residence is located is greater than five acres, then no lien shall attach to the judgment debtors' principal residence and the surrounding five acres, held by them as tenants by the entireties or that was held by them as tenants by the entireties prior to the death of either spouse where the tenancy terminated as a result of the death of either spouse.
(6) For debts arising from the provision of care by a hospital or ambulatory surgical center to a minor, there shall be no execution on or otherwise forced sale of the principal residence of the custodial parent or parents for a judgment obtained for the outstanding debt until such time as the minor is either no longer residing with the custodial parent or parents or until the minor reaches the age of majority, whichever occurs first.
(e) The Commission shall adopt rules to ensure that this section is properly implemented. The Department shall not issue or renew a license under this Article unless the applicant has demonstrated that the requirements of this subsection are being met. (1991, c. 310, s. 1; 2013-382, s. 13.1; 2013-393, s. 2.)
301 S. McDowell St., Suite 1014
Charlotte, NC 28204
110 E. Jefferson St.
Monroe, NC 28112