In light of the Profiting from the Poor series by ProPublica and MLK50, Methodist is wisely reviewing its practices during a 30-day period. Methodist officials and other Memphis hospitals should use this opportunity to examine their financial assistance policies to ensure they align with their mission to effectively meet the needs of their community.
They can begin to repair the damage resulting from aggressive collection actions by working with patients, congregations, community organizations that serve low- and moderate-income people, hospital leadership, and the Methodist governance board to ensure that community stakeholders are front and center when the new financial assistance policy is developed. This shared process will ensure the policy is of mutual benefit.
As consumer advocates with decades of experience focusing on hospital billing and collections, we have worked with consumer advocates and policymakers at all levels of government to raise the bar for nonprofit hospitals so they will proactively inform patients of their financial rights and set fair, reasonable limits on bill collections. We have five suggestions for the Methodist Le Bonheur system as they review their policies.
1. Engage people who have been subjected to wage garnishments and other aggressive collection actions. Talk with patients directly to understand their plight and whether they were aware of the hospital’s financial assistance policy. According to Methodist’s own tax documents, half of their bad debt — outstanding bills Methodist was unable to collect — were associated with people who should have qualified for their financial assistance policy. This is a high percentage, and Methodist should work with patients and their advocates to understand what went wrong. The burden here is on the hospital, not its patients, to improve its procedures.
2. Base eligibility for financial help on need, not insurance status. Regardless of whether patients have insurance, hospital financial assistance policies should be based on a patient’s ability to pay their portion of the bill. As health plans’ out-of-pocket costs continue to climb, more people — many on fixed incomes — can’t pay their deductibles or copays. One study found rates of underinsurance nationally are at their highest point in 15 years. In Tennessee alone, the average deductible for a family with employer-sponsored health insurance has steadily climbed to over $3,500 — a steep price for people living on modest incomes. A policy that fails to include insured patients of modest means is out of step with the times.
3. Adopt a Do-No-Harm collections policy. Lawsuits and wage garnishments are costly for both parties, punitive for patients, and harmful for the long-term economic health of families. Collection agency and legal fees drain patients’ finances, and do nothing to improve the Methodist bottom line. Rather than spend hospital resources on legal fees for oppressive claims, Methodist should instead redirect staff to develop no-interest payment plans with reasonable repayment periods based on patient incomes.
4. Stop garnishments. Cease garnishing wages so that working people with limited means are no longer humiliated and brought to the brink of financial disaster. Instead, work with people on terms that will allow them to successfully resolve their bill.
5. Provide better training to hospital staff. Employees should not only be aware of the policy but be willing to help people apply for assistance. Post signs and provide information and financial assistance applications in admitting areas, lobbies and the emergency department. Work with faith groups, community-based and legal service organizations to promote the policy outside of the hospital and across the community. Next, clarify and publicize the policy internally and externally. A meaningless policy would be one that fails to reduce the numbers of patients who should have qualified for financial assistance but were instead subjected to aggressive collection actions.
This is a golden opportunity for Methodist, as a charitable institution, to right a wrong and learn from its mistakes. Taxpayers support nonprofit hospitals, and in turn, these hospitals have a legal obligation to provide benefits to the communities they serve. And in other spheres, Methodist has been a leader in developing community health initiatives that target childhood asthma, seek to lower racial disparities in health outcomes for cancer and infant mortality, and address other community health priorities.
Methodist’s lauded Congregational Health Network serves as a national model for how health systems can partner with faith-based congregations to improve patient health. It’s clear the collection practices exposed by investigative reporting by ProPublica-MLK50 conflict at a fundamental level with these goals. Nonprofit hospitals interested in improving community health ignore their own billing and collections policies at their peril — and at the cost of patient well-being.
Jessica L. Curtis, J.D., is a senior advisor, and Mark Rukavina, MBA, is the business development manager at the Center for Consumer Engagement in Health Innovation at Community Catalyst, national non-profit advocacy organization.
The Methodist Debt Machine Series
The story that started it all: Methodist Le Bonheur Makes Millions, Owns a Collection Agency and Relentlessly Sues the Poor and everything that came after, here.
This story is brought to you by MLK50: Justice Through Journalism, a nonprofit reporting project on economic justice in Memphis. Support independent journalism by making a tax-deductible donation today. MLK50 is also supported by the Surdna Foundation, the Southern Documentary Project and Community Change.