Hospital changes debt-collection policies

A United Methodist-affiliated hospital system is making changes after making headlines for suing its own employees for unpaid medical bills.

Calls to follow the United Methodist Social Principles played a role in the new policies aimed at helping low-income patients, said hospital leaders.

Methodist Le Bonheur Healthcare in Memphis, Tennessee, announced July 30 it would raise its minimum wage to $15 an hour over the next 17 months and no longer sue its employees or garnish their wages for unpaid medical bills.

The nonprofit health system also said it is revising its financial assistance policies so that it will:

  • No longer pursue legal action against any patient making up to 250% of the federal poverty guideline — regardless of that patient’s insurance status.
  • No longer accept court-ordered interest on medical debt nor collect court-allowed attorney fees and court costs from any patient.

Under the new policy, uninsured patients also will be eligible for financial assistance if their income is up to 250% of the federal poverty level — up from the current threshold of 125%. The new financial assistance policies take effect in August.

“Today’s announcement marks the renewal of our commitment to do our part to address poverty in our community,” said Michael Ugwueke, chief executive officer and president, during a conference call.

With the wider eligibility, he said, a family of three making up to $53,000 could receive assistance. That means more than half of the Memphis population would be eligible for the health system’s financial help, Ugwueke added.

The changes come after an investigative report by MLK50: Justice Through Journalism in partnership with ProPublica found that from 2014 through 2018, the hospital system filed more than 8,300 lawsuits against patients, including some of its own workers.

Earlier this month, the hospital system said it was suspending legal actions against former patients who still owe medical bills as it evaluated its financial assistance policies.

During the review process, hospital leaders held more than 20 listening sessions with employees and patients to learn how they could do more for the economic well-being of the people they serve.

Methodist Le Bonheur engaged a third party to review how the hospital system’s billing and collection practices compare to other similarly sized, urban, mission-drive health care organizations.

The hospital system also received pressure from United Methodists.

Among the church members publicly calling for change was Bishop Bill McAlilly, who leads the Tennessee and Memphis conferences and serves on Le Bonheur’s board.

In a blog post, the bishop wrote that he urged “the leadership of the hospital to ensure that policies and procedures are aligned with the Social Principles of The United Methodist Church and our Wesleyan Heritage.”

Such calls have an effect, Ugwueke acknowledged during the conference call.

“Our vision and mission calls for us to follow the Social Principles of The United Methodist Church, so that has a significant impact on everything that we do,” he said.

The Social Principles, while not church law, represent the denomination’s “prayerful and thoughtful effort” to speak to contemporary issues such as climate change, immigration and trade from a biblical and theological perspective.

The Social Principles contain a section that calls health care “a basic human right.” The document also asserts, “Every person has the right to a job at a living wage.”

Changes to Methodist Le Bonheur’s wages will take place over time. The health system said it would raise its minimum pay from $10.08 to $15 an hour by January 2021. Effective in September this year, minimum pay will increase to $13.50 an hour.

The minimum-wage increase will cost the health system an additional $14 million, said Carol Ross-Sprang, chief human resources officer. About 17% of Methodist Le Bonheur’s more than 11,000 employees currently make below $15 an hour.

The hospital system also committed to create more opportunities for interested employees to gain skills, experience and education to advance to higher-paying positions.

Chuck Lane, Methodist Le Bonheur’s chief financial officer, said even with the new policies, the hospital also would make every effort to work with patients on payment — bringing collection in house.

“We certainly recognize that some insured patients have high co-pays and deductibles that result in a burden,” he said. “Our commitment is to work directly with those patients in need of financial relief to establish affordable payment plans they can manage.”

McAlilly, who has been associated with the hospital system for more than 30 years, applauded the health care system’s long legacy of healing ministry and its work to address concerns around medical debt.

He noted that Methodist Le Bonheur’s roots stretch back more than 100 years to Methodist layman John H. Sherard Sr., who had a vision for a hospital in the city of Memphis that would offer quality care for people from all walks of life.

“We give thanks that excellent care is accessible for all persons as MLH has provided care across the years,” McAlilly said. “The presence of Methodist Le Bonheur Health Systems in the city of Memphis is a gift.”

Bishop Gary Mueller, who leads neighboring Arkansas Conference and serves on the hospital system’s board, shared that sentiment.

“I am very grateful that the Methodist Le Bonheur Healthcare system has taken the opportunity to re-evaluate the collection practices as part of its ongoing commitment to faithfully carrying out its mission and the Social Principles of The United Methodist Church,” he said.

Ugwueke said the hospital system is taking on important step to uplift workers, patients and its wider community.

“Through this process,” he said, “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.”

Hahn is a multimedia news reporter for UM News. Contact her at (615) 742-5470 or [email protected]. To read more United Methodist news, subscribe to the free Daily or Weekly Digests.


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