Agreement to cancel medical debt for 193,000 needy patients in Southern states

NEW ORLEANS (AP) — A New Orleans-based system of hospitals and clinics serving Louisiana, Mississippi and Alabama is working with a New York nonprofit to wipe out $366 million in medical debt for about 193,000 needy patients.

The Times-Picayune/The New Orleans Advocate reported Wednesday that the deal involving Ochsner Health was arranged by Undue Medical Debt, a donor-funded organization that negotiates with hospitals, doctors’ offices and ambulance services to purchase and erase the outstanding medical debt of those least able to afford it.

Ochsner is the largest health system in Louisiana and has 46 hospitals and 370 clinics and urgent cares in the three states it serves.

“Ochsner is proud to have worked with Undue Medical Debt to enable the organization to acquire and cancel past one-time debts for eligible residents,” the company said in a statement.

The deal followed a Monday announcement of an agreement between Ochsner, Undue Medical Debt and New Orleans to wipe out more than $59 million in medical debt for about 66,000 patients in that city.

The city had agreed last year to provide Undue Medical Debt with $1.3 million in federal money from the 2021 American Rescue Plan Act, a pandemic program to acquire qualifying debt and erase it.

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“The city government gets a lot of credit for getting the ball rolling,” said Daniel Lempert, vice president for communications and marketing at the nonprofit. “Once we got in the door and explained our model to the hospital, there were other debts that qualified for the program.”

Lempert said that in addition to the pandemic dollars, his organization used money it received from donations and grassroots fundraising both locally and nationwide to purchase the debt from Ochsner.

He declined to say how much it paid, but based on what the organization has said it typically pays — about 1 cent for each dollar of debt — the amount would be around $3.6 million.