Tennessee health system modifies debt collection practices after media probe

After a review of its practices, Memphis, Tenn.-based Methodist Le Bonheur Healthcare said it will stop filing debt-collection lawsuits against the poorest patients.

The announcement, made July 30, comes about a month after  an investigation by ProPublica and MLK50 found that Methodist may be breaking IRS regulations for nonprofit organizations by not publicizing financial assistance policies. The investigation also found that the health system filed more than 8,300 lawsuits against patients from 2014 through 2018.

Subsequently, Methodist embarked on a review into the system's billing and collections practices. This included more than 20 listening sessions with employees, physicians and patients as well as engaging a third-party expert to conduct the 30-day review and suspending debt-collection lawsuits during the 30-day process, hospital officials said.

As a result of the review, the system will not file debt-collection lawsuits against patients who are at or below 250 percent of the federal poverty level. Methodist also will increase its threshold for financial assistance eligibility. Uninsured patients have been eligible for financial assistance if their income is up to 125 percent of the federal poverty level. That will change to 250 percent.

Additionally, Methodist said it won't accept court-ordered interest on medical debt anymore, or collect court-allowed attorney fees and court costs from patients.

The updates take effect in August. 

Methodist also revealed July 30 that it will gradually raise its employee minimum wage to $15 an hour by 2021.  The minimum wage will increase from $10.08 to $13.50, effective in September, and to $15 an hour by January 2021.


More articles on healthcare finance:

Senator, HHS chief respond to CMS proposal on hospital price transparency
4 things to know about federal hospital payments for low-income, uninsured patients
Hospital profitability declined in June, analysis finds

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