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Healthcare Lawsuits Continue to Get Scrutinized

More pressure from consumer advocates, lawmakers, and other officials regarding the practice of filing lawsuits against individuals who do not pay their debts has led another hospital to say it is re-evaluating its policies and procedures.

A report last week cited the number of lawsuits filed by Methodist Le Bonheur Healthcare, which operates a number of hospitals in Memphis, Tenn. The report accused the hospital of “relentlessly suing the poor,” including suing and garnishing the wages of its own employees. Methodist was the most prolific filer of lawsuits against individuals with unpaid medical bills between 2014 and 2018, according to the report, which was released a day after a separate study indicated that non-profit hospitals were more likely to file lawsuits and seek garnishments for unpaid bills than their for-profit brethren.

“Even with all this, we recognize that we serve a diverse community and we are always thinking about how we can do more and serve our community better,” wrote Dr. Michael Ugwueke, Methodist’s president and chief executive, in a guest column. “Over the next 30 days we will be reviewing our policies and procedures to ensure we are doing everything possible to provide every Memphian with the care and assistance they need. We want all patients to know and understand our financial assistance policies and we want to ensure our policies reflect our mission.”

About 10% of the 857,000 individuals who went to a Methodist Le Bonheur facility last year did not have insurance, according to Ugwueke, and lawsuits were filed on fewer than 0.1% of those individuals without insurance and “only then after all other means to collect were exhausted.”

“In every case, the only time we pursue legal action to collect a debt is when the patients who can pay refuse to work with us,” Ugwueke wrote.

More hospitals across the country — as well as those that purchase their debts or collect on their behalves — can expect to receive additional scrutiny about the lawsuits that are filed seeking to recover unpaid debts. This appears to be a trend that is generating more attention, especially from media outlets and consumer advocates, and companies should start preparing themselves for how they will handle questions when they knock on their door.

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