I-TEAM: Medical debt forgiveness letters going out; Lucas County/Toledo not billed for the money

TOLEDO, Ohio (WTVG) - Some people in the Toledo area are supposed to see letters telling them their medical debt is forgiven this week. But the 13 Action News I-Team has learned the groups funding these plans haven’t been asked for the money yet.

Mercy Health has a deal with the company called RIP Medical Debt to forgive debt for some in Toledo and Lucas County. But so far they’ve not been asked for the money to make it happen

On Oct. 6, dignitaries in downtown Toledo announced that Mercy Health had a deal with RIP Medical Debt to forgive more than $7 million in medical debt for some who qualify in Toledo and Lucas County.

RIP Medical Debt would buy all that debt for pennies on the dollar. RIP Medical Debt says patients should be getting notice very soon if they’re getting debt forgiven.

A spokesman for RIP Medical Debt telling the I-Team this week: “Letters are out and all of them should have arrived by the end of this week.”

But two groups that have not heard from RIP Medical Debt are Lucas County and the city of Toledo. Both have pledged the money to fund the medical debt forgiveness.

That RIP spokesman told us on Oct. 6: “We invoice the local government in advance of purchasing the medical debt”

Spokeswomen from both the city and county tell the I-Team that RIP Medical Debt has not invoiced their entity and neither has cut RIP Medical Debt a check.

It’s not clear how RIP Medical Debt has the money for when they eventually cut a check to Mercy Health, after taking their 10% fee.

UPDATE

The 13 Action News I-Team heard back from RIP Medica Debt after this original story aired.

Here is their full statement to the I-Team:

The Toledo contract wasn’t signed until June and Lucas was just signed in early October. We have been actively working to engage local providers to obtain qualifying medical debt so that we would be in a position to purchase and erase it once the contracts were finalized. We wanted both contracts finalized before invoicing the local governments since they geographically overlap.

We have unrestricted fund balances in place that can be used to temporarily support the closure of provider deals periodically while we wait for government or other funding sources to come in. That is the approach we took for this deal. The timing of government funding can sometimes be unpredictable. To prevent debt abolishment from being delayed, at times, RIP Medical Debt will leverage our unrestricted funds and recoup the funds later from the government. This is what happened in this case because we did not want the people in Lucas / Toledo living under the weight of medical debt to wait longer than necessary for relief.

This is aligned with our mission to end medical debt. The 10% indirect rate is not a “fee.” It is part of our costs. It is well documented that indirect rates for nonprofits are necessary to their ability to function and are typically 20% or higher. We have accepted the 10% rate because of our interest in removing the medical debt burdens for people in Lucas / Toledo. We are in the process of billing the local governments of Lucas and Toledo for this abolishment. We continue to be excited and energized by our partnership in the region and look forward to additional debt relief announcements.

It’s also worth mentioning that there are qualifying medical debts we purchased from Mercy Health that don’t fall in the geographic zones of Toledo/Lucas and we still purchase these using unrestricted funds and abolish them nonetheless.

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