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County To Collect Hospital Debts From State Tax Refunds

Managing Editor

NEW HANOVER CTY - The New Hanover County Board of Commissioners voted unanimously at their February 3rd meeting to include New Hanover Regional Medical Center Debt with County Debt in the NC Debt Setoff Program.
In short, if you owe a bad debt to New Hanover  Regional Medical Center that money could be taken from your North Carolina Income Tax Refund in the future.
According to Lisa Wurtzbacher, County Finance Director, "North Carolina's Debt Setoff program assists North Carolina local governments with the recovery of delinquent debts by offsetting debtors' North Carolina state tax refunds and Education lottery winnings. The County has used the state's debt setoff program since 2006 to collect delinquent accounts such as property taxes, animal control citations, sheriff and fire citations, health department charges, and library fees. Since inception of this program, the County has collected $1,060,721 through debt setoff, with the amounts collected each year steadily increasing."
She explained in a memo to the Board, "New Hanover Regional Medical Center (NHRMC) has requested that the County collect a portion of their delinquent debts through the state's debt setoff program. New Hanover County has a guarantor relationship with the county-owned hospital and is vested in its financial well-being. Any positive impact the debt setoff program can have on New Hanover Regional Medical Center (NHRMC) benefits the County and the community as a whole. It is a component unit of the County and the County is the issuer of NHRMC's bonded debt. Further, NHRMC's realty and fixtures are owned by the County and the Board of County Commissioners appoints the governing board of trustees for NHRMC."
She explained, "Including NHRMC's delinquent debt in the debt setoff program is not expected to cause the County any significant additional costs and NHRMC will repay the County for any costs borne by including them in this program. The County's debts will continue to have priority over the debts submitted on behalf of NHRMC. Only individuals who have gone through the normal collections process unsuccessfully and have been placed in a bad debts status will be submitted to the program. It will not be used for individuals approved for charity care, children under 18 or those who are currently on an approved payment plan."
Many local governments in North Carolina utilize the Debt Set-off Collection Act at the same time as traditional collection methods. A collection agency takes up to 20% or more of the funds collected while the N.C. Local Government Setoff Debt Clearinghouse charges $5 per case. There's no warning required and usually people only discover it after filing their taxes.