Methodist Le Bonheur Healthcare, the largest hospital system in Memphis, said it has suspended “court collection activities” over unpaid medical bills, days after an investigation by MLK50 and ProPublica detailed its relentless pursuit of debts held by poor people and even its own employees.
“We recognize that we serve a diverse community and we are always thinking about how we can do more and serve our community better,” Methodist said in a statement. “Over the next 30 days we will be reviewing our policies and procedures to ensure we are doing everything possible to provide the communities we serve with the care and assistance they need. Also, we will immediately suspend any further court collection activities during this period.
“As a learning organization that is committed to continuous quality improvement, we want to be absolutely sure that our practices continue to support our mission and vision of improving every life we touch regardless of ability to pay.”
A spokesperson did not immediately answer questions about whether the suspension applied to ongoing debt collection cases or only to new ones.
From 2014 through 2018, the hospital system affiliated with the United Methodist Church filed more than 8,300 lawsuits, according to an MLK50-ProPublica analysis of Shelby County General Sessions Court records. That’s more than all but one creditor during that five-year period.
One story chronicled the struggle of Carrie Barrett, who makes $9.05 an hour at Kroger, to pay her 2007 hospital bill for $12,019. The bill has ballooned to more than $33,000 due to interest and attorney’s fees.
Another detailed how Methodist sues its own employees, some of whom make less than $13 an hour, for unpaid bills related to care delivered at its hospitals. Its health plan doesn’t allow workers to seek care at hospitals with more generous financial assistance policies.
Defendants talked about how the lawsuits upended their lives and left them in a position where they would never be able to pay off their debts, which grew from year to year as interest mounted.
With $2.1 billion in revenue and a health system that includes six hospitals, Methodist leads the market: In 2017, it had the most discharges per year and profits per patient, according to publicly available data analyzed by Definitive Healthcare, an analytics company. Methodist says it has “a hospital in all four quadrants of the greater Memphis area, unparalleled by any other healthcare provider in our region,” plus more than 150 outpatient centers, clinics and physician practices. The system also said it provides community benefits of more than $226 million annually.
The number of lawsuits Methodist files isn’t out of proportion to its size, at least compared to competitor Baptist Memorial Health Care and Regional One Health, the county’s public hospital. But Methodist stands out in other respects.
Its financial assistance policy, unlike those of many of its peers around the country, all but ignores patients with any form of health insurance, no matter their out-of-pocket costs. If they are unable to afford their bills, patients then face what experts say is rare: A licensed collection agency owned by the hospital.
Also, after the hospital sues and wins a judgment, it repeatedly tries to garnish patients’ wages, which it does in a far higher share of cases than other nonprofit hospitals in Memphis. A court-ordered garnishment requires that the debtor’s employer send to the court 25% of a worker’s after-tax income, minus basic living expenses and a tiny deduction for children under 15.
Methodist secured garnishment orders in 46% of cases filed from 2014 through 2018, compared with 36% at Regional One and 20% at Baptist, according to an analysis of court records by MLK50.
Methodist’s announcement follows calls by lawmakers and even a Methodist bishop to reevaluate its practices.
“I was surprised to read about Methodist Le Bonheur’s billing practices, and I’m glad that the company is reexamining them,” U.S. Rep. Steve Cohen, D-Tenn., said Tuesday, before the hospital announced the suspension of legal actions. “The company has always served Memphis well and hasn’t abandoned the city for Mississippi. The hospital has had two African-American presidents and has built a reputation on its mission to provide high-quality, affordable care. I will continue to monitor this situation and look forward to the company’s assessment.”
United Methodist Church Bishop Gary E. Mueller, a member of the hospital’s board, also praised the hospital system for reconsidering.
“I am very grateful, though not surprised, that the hospital is taking this opportunity to evaluate the current collection practices as part of its ongoing commitment to faithfully carrying out its mission and the Social Principles of The United Methodist Church,” Mueller wrote on Tuesday.
“The healthcare landscape is constantly changing and offers significant challenges for providers such as Methodist LeBonheur, especially as they serve those who struggle financially. However, even as Methodist addresses these very real challenges, I cannot imagine the pain and hurt so many would feel if this outstanding system were not present in the communities it serves.”
New data obtained from Shelby County General Sessions Court shows that Methodist has filed more than 600 new lawsuits this year. Its most recent suits were filed on June 21, days before the MLK50-ProPublica stories were published.
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