Memphis’s Methodist Hospital System Suspends Wage Garnishment Practice Over Unpaid Bills

Memphis, Tenn.’s largest hospital system, Methodist Le Bonheur Healthcare, is immediately suspending its court collection activities pending a review of their policies. When attorney R. Alan Pritchard appeared in Shelby County General Sessions Court in Memphis on July 3, he asked the court to drop over 24 cases related to unpaid hospital bills.

Methodist Le Bonheur Healthcare came under fire recently after MLK50 and ProPublica Local Reporting Network published an article highlighting the aggressive debt collection tactics the hospital system uses against low-wage patients who cannot pay their bills. In June, Mary Washington Healthcare in Virginia was similarly exposed in the Journal of the American Medical Association for seeking legal action against low-income individuals for unpaid bills. The hospital also suspended the practice until they can review their policies.

Critics of Methodist Le Bonheur Healthcare say the non-profit hospital pays no tax in return for serving Memphis. Instead, the health system filed 8,300 lawsuits in five years to collect debts. They point to the case of Carrie Barrett who ran up a $12,019 bill in 2007 for a necessary heart catheterization. The non-profit system garnished her less than $13 wage multiple times and added interest to her debt. Barrett, now 63, owes $33,000 which she cannot pay.

According to NPR.org, part of the problem is Methodist’s policy of ignoring patients needing financial assistance to help with their out-of-pocket expenses. The hospital owns its own collection agency which goes after judgments to garnish wages. Lawmakers expressed surprise at the hospital system’s debt collection practices as did the Rev. Anthony Anderson, an elder at Memphis’s Faith United Methodist Church.

According to the hospital system’s own statements, they made $86 million in 2018 after expenses. In 2017, CEO Dr. Michael Ugwueke earned $1.6 million in total compensation and his assistant, former CEO Gary Shorb earned $1.2 million as Ugwueke’s advisor.

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