We set out to determine how aggressively Memphis, Tennessee, hospitals, including market leader Methodist Le Bonheur Healthcare, use the courts to collect on unpaid medical debts.
Once it became apparent that Methodist filed more lawsuits against patients and proportionately more garnishment orders, we also wanted to know how many Methodist employees have had their wages garnished by Methodist.
Finally, we compared Methodist’s financial assistance policy with those of other hospitals across Tennessee and the country.
Counting Lawsuits and Garnishments
To compare lawsuits filed by Methodist with those brought by other hospitals in Shelby County, which includes Memphis, we requested a series of datasets from the county General Sessions Court. For every year since 2014, we asked for lists of new cases, as well as judgments and garnishments. All told, more than 163,000 cases were filed during that time.
To get some summary statistics, we created a series of pivot tables in Microsoft Excel and combined different variations of Methodist’s name. The results showed that Methodist filed the second-highest number of lawsuits of any plaintiff between 2014 to 2018, after Midland Funding. Methodist had the most garnishment orders of any plaintiff.
We also wanted to know the percentage of cases for which Methodist secured garnishments over the years, compared with other nonprofit hospitals. Our summary tables showed us that Methodist secured garnishment orders in 46% of cases filed from 2014 through 2018, compared with 36% at Regional One and 20% at Baptist. (Our data was retrieved in March 2019, so the garnishment rates could be higher today.)
Comparing Financial Assistance Policies
The Affordable Care Act requires that all nonprofit hospitals have financial assistance policies, which must be available online.
At our request, Definitive Healthcare, an analytics firm, made a list of all hospitals in Tennessee and a separate list of tax-exempt hospitals. Then Definitive Healthcare calculated the share of charity care provided by each of the nonprofits based on the hospitals’ Medicare Cost Reports for the period ending Dec. 31, 2017.
Each nonprofit’s charity care market share was calculated by dividing the charity care provided by that hospital over all the charity care provided by the 34 identifiable nonprofit hospitals in Tennessee.
MLK50 and ProPublica focused on the top 10 hospitals, which together make up 85% of the nonprofit charity care market. This list does not include Regional One Health, which is a government-owned hospital.
Those 10 hospitals are, in order of share of the nonprofit charity care market: Methodist University Hospital, Vanderbilt University Medical Center, University of Tennessee Medical Center, Saint Thomas Rutherford Hospital, Saint Thomas Midtown Hospital, Holston Valley Medical Center, Baptist Memorial Hospital, Bristol Regional Medical Center,
Saint Thomas West Hospital and Fort Sanders Regional Medical Center.
(Methodist North, Methodist South, Methodist Germantown and Le Bonheur Children’s Hospital did not individually report charity care, but they are grouped under Methodist University Hospital.)
Then we examined the financial assistance policies available online from those 10 hospitals. Our primary question was this: Does the hospital’s financial assistance policy offer free or discounted care to patients with insurance?
At eight of the 10 hospitals, the answer was yes.
At one hospital — Fort Sanders Regional Medical Center, part of Covenant Health — the financial assistance policy is not clear. The plain-language summary online states: “Patients are eligible for financial assistance based on their income level and assets. Patients with a family income of up to 200% of the Federal Poverty Level may be eligible for a discount of 100%. Patients with a family income of 200–299% of the Federal Poverty Level may be eligible for a discount of 90%.”
But Fort Sanders’ webpage states, “if you are an uninsured person with no public or private source of payment for medical services, Fort Sanders Regional Medical Center will provide, at a reduced rate, medically indicated services.”
A representative from the billing office said that patients with insurance do qualify for a discount based on the balance left after insurance has paid its share. This hospital represents less than 3% of the total nonprofit charity care market.
Only Methodist does not offer any free or discounted care for patients with insurance, according to its financial assistance policy available online. It represents nearly 22% of the total nonprofit charity care market. (Methodist said in a statement that it offers 0% interest payment plans for insured patients but declined to answer questions about whether it offers any other assistance.)
A caveat: Definitive Healthcare said “it is possible that some [nonprofits] have been left off the list if we were unable to identity the hospital correctly.”
Methodist Suing Its Employees
To determine how many Methodist employees had their wages garnished by Methodist while they were hospital employees, we again turned to Shelby County General Sessions Court, the court’s civil docket report databases available online and garnishment answers uploaded to the court’s website.
We started with a database of all garnishment orders issued between 2014 through 2018.
Then, we looked for cases in which Methodist was both the plaintiff and the garnishee. We included variations of Methodist’s name, taking care not to include separate entities.
We found 160 cases in which Methodist was the plaintiff and the garnishee.
To narrow these results to the cases in which Methodist actually garnished an employee’s paycheck, we turned to the court’s civil docket report database. We reviewed the docket report results, which are a chronology of events in a case, for all 160 cases. We looked for cases in which a payment was received, signaling that the employer garnished an employee’s wages and sent that amount to the court. The dollar amount of the garnishment is included in each of these docket entries. We also looked for evidence that the court sent the payment received to the plaintiff.
In some instances, there were multiple defendants on a single suit, such as in the case of a married couple. If we were unable to identify which defendant worked at Methodist, we excluded those cases. In cases in which the docket report results were unclear, we excluded those cases.
We’re interested in hearing from people who know more about Methodist Le Bonheur or other hospitals or doctors’ offices in Memphis. Talk to us if:
- You’ve been sued by a hospital or doctor
- You have medical debt that’s been difficult to pay off
- You work for a hospital or collection agency and have something to share about their financial practices
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