Tennessee Nonprofit Hospital System Cancels Debt for 7,000 Patients

The largest nonprofit hospital system in Memphis, Tennessee has relieved the debt of about 7,000 patients.

Methodist Le Bonheur Healthcare has erased the debt for many patients and those affected have seen the balance they owe either fully or partially reduced, the Commercial Appeal reported.

“We are implementing the policies and practices we announced in July, and we have reached out individually to patients who currently have legal proceedings to provide information related to their specific situation,” a health system spokesperson said in a statement to the news outlet. “Formal letters to those patients were mailed last week.”

Methodist Le Bonheur Healthcare came under fire in June when investigative reporting by MLK50: Justice Through Journalism in partnership with ProPublica found that the nonprofit healthcare system had regularly sued its low-income patients and some of its low-wage employees. The report stated that Methodist filed more than 8,300 debt lawsuits from 2014 through 2018 and pursued low-income defendants who did not really have the ability to pay. To put this approach into perspective, nearly one in four residents live below the poverty line in Memphis, according to the Commercial Appeal.

Following the report from June, the non-profit announced in July that it would update its financial assistance policy.

“Nationally, and here at home, a conversation is occurring about elevating those in need and caring for medically underserved patients. Methodist is working to do our part to be a positive force for change in this important conversation,” said Michael Ugwueke, President and CEO of Methodist Le Bonheur Healthcare, in a statement from July. “We work each day to improve every life we touch by uplifting our Associates, patients, and the community.”

“At our core, we are a learning organization committed to continuous growth. We are now taking another step in our journey to uplift our Associates, patients, and the community we serve,” Ugwueke continued.

“Through this process, we were humbled to learn that while there is so much good happening across our health system each day, we can, and must, do better.”

The new policy revision states that uninsured patients who have an income of up to 250 percent of the federal poverty guidelines now will be eligible for financial assistance. The policy also pledges that Methodist will not pursue legal action against anyone who is at or below 250 percent of the federal poverty guidelines. The non-profit health care system also stated it would “no longer collect court allowed attorney fees and court costs from any patient.”

“Our updated policy will better reflect the needs and circumstances of those we serve. More importantly it will help us better care for all members of the community. With our revised policy, families of three with a household income of $53,325 or less, will have access to financial assistance. This represents more than half of the population of greater Memphis,” said Ugwueke.

Methodist also stated that it would raise its minimum wage for employees to $15 an hour over the next 17 months. By September, the hospital system’s minimum wage will increase from $10.08 to $13.50, and by January 2021, the nonprofit stated the minimum wage will become $15 an hour.

“Our culture is built on the Power of One. It’s the idea that each of us — no matter our role or position within the health system — has the power to make a difference in the lives of our patients, their families and each other. With our Associate advancement effort, we are working to build on our culture by creating opportunities for our Associates to have a more financially secure and rewarding future,” said Ugwueke.

A Methodist spokesperson told The Commercial Appeal any patient with questions about their bill can contact the Methodist billing department at (901) 842-1260.

In May, Johns Hopkins Hospital was accused of targeting low-income and Black patients with financial lawsuits over unpaid medical debt. The Coalition for a Humane Hopkins, the AFL-CIO and National Nurses United previously released a report on the nonprofit hospital’s policy of filing lawsuits targeting low-income patients in Maryland. In the report, it found that the median debt of former patients equaled to $1,438, with many of the former patients qualifying for reduced payments.

The coalition called on Hopkins to stop medical debt lawsuits and create a system for patients who are eligible for charity or reduced payments.

“[John Hopkins] is an economic anchor in the city and state,” Dr. Marisela Gomez, who worked with the coalition, previously told The North Star. “However, in its process of building its reputation in these areas, it has not been a good neighbor. It has physically expanded into the land of its neighbors since its first buildings were constructed.”

About the Author

Maria Perez is a breaking news writer for The North Star. She has an M.A. in Urban Reporting from the CUNY Graduate School of Journalism. She has been published in various venues, including Newsweek, Juvenile Justice Information Exchange, City Limits, and local newspapers like The Wave and The Home Reporter.