Hospital Dropping Lawsuits After Report Calls Out ‘Aggressive’ Collection Tactics

Yielding to public pressure, a healthcare network in Memphis, Tenn., is erasing the debts owed by more than 6,000 former patients it had filed lawsuits against for unpaid debts.

In June, a published report spotlighted the collection practices at Methodist Le Bonheur healthcare in Memphis, Tenn. The report chastised the organization for filing more than 8,000 lawsuits against former patients, including some employees, in a five-year period. Less than a month after the report was published, Methodist announced changes to its collection practices, including no longer filing lawsuits against individuals who make less than 250% of the federal poverty guidelines. The hospital also announced it was increasing its minimum wage.

Methodist has been filing “case satisfied” notices for about 6,500 lawsuits, according to a published report. It has not filed any new lawsuits in the past three months.

Consumer advocates praised the decision by the hospital to cease its collection efforts.

“I was trying to remember when have I seen such a rapid switch,” said Jessica Curtis, a senior adviser at Community Catalyst. “I don’t know that I’ve seen that before. The scale of what they are attempting to rectify is really commendable from what we’ve seen thus far.”

Hospitals in Virginia, Oklahoma, New York, Tennessee, and Maryland have all been accused of being too aggressive with their collection efforts. Earlier this month, the Washington Post reported that the University of Virginia Health System has filed more than 36,000 lawsuits in the past six years against individuals with unpaid debts.