Methodist University Hospital: A “Nonprofit” that Seeks Profits by Suing the Poor, Including Its Own Low-Wage Employees

When Carrie Barrett rushed to the ER at Methodist University Hospital in Memphis, she needed an emergency heart catheterization. The procedure required a two-night stay at the hospital. That was in 2007. In 2010, the hospital sued her for not having paid her share of the medical services it provided: $12,109, close to what Barrett makes in a year.

Methodist University Hospital: A “Nonprofit” that Seeks Profits by Suing the Poor, Including Its Own Low-Wage Employees

The woman did not remember receiving any notices to pay before she was notified of the hospital’s lawsuit. Methodist Le Bonheur, the hospital system affiliated with the United Methodist Church, which is supposed to be a nonprofit, was not only seeking payment of the $12,109, but also attorney’s fees, court costs, and added interest.

Today, Barrett’s debt amounts to $33,000. Over the years, the hospital has managed to garnish money from her meager paychecks on 15 occasions.  

An investigation by the nonprofit news organization ProPublica revealed that Barrett is not the only victim of the hospital’s egregious collection tactics. Between 2014 and 2018, Methodist le Bonheur filed over 8,300 similar lawsuits.

While other nonprofit hospitals have been known to file such lawsuits against patients, Methodist sues them more often, frequently resorting to some egregious tactics, which include using its own aggressive collection agency.

Lawsuits are systematically filed whenever a patient cannot afford their bills, which is not uncommon in a place like Memphis, with a quarter of the population below the poverty line. If Methodist secures a favorable judgment, it immediately tries to garnish the defendants’ wages, and it very often succeeds.

Employees at Methodist are no exception, and they often get sued by the hospital over unpaid medical bills, sometimes higher than their yearly pay. In these cases, the hospital garnishes its own employees’ wages to secure payment of its steep bills.  

Because it is a nonprofit with significant tax exemptions, Methodist is expected to provide financial assistance and charity care to those in need. Thus, this type of hospitals should not be suing the poor on such a massive scale. In fact, many nonprofit hospitals have implemented policies against suing patients. This includes other hospitals affiliated with the United Methodist Church. In fact, some of them specifically have policies that state they will “at no time . . . impose extraordinary collection actions such as wage garnishments.” 

But that is not the case with Methodist Le Bonheur. According to NPR, “hardly a week goes by in which Methodist workers aren't on the court docket fighting debt lawsuits filed by their employer.”

Between January and June 2019, a journalist reporting on the hospital system’s collection tactics saw dozens of employees sued by Methodist, over unpaid medical bills, defending themselves in court. “On a single January day, there were 10 defendants on the docket whose place of employment was listed in court records as Methodist,” NPR reported.  

According to the terms of their health insurance benefits, Methodist employees can only seek care at the system’s hospitals. Thus, even though competitors offer more generous financial assistance and are less keen on suing patients, employees are stuck with Methodist and the threat of looming lawsuits. 

But this is not the only way life is made harder for Methodist workers, as their wages lag behind those of employees of other hospitals in the same region. Workers at Methodist can make as little as $10 per hour, and 18 percent of them make $15 per hour or less. Hardly enough to pay medical bills amounting to thousands of dollars. 

A woman who cleans hospital rooms at a Methodist facility for $11.95 an hour, and has two dependants, is being sued over unpaid bills surpassing her yearly salary. When she proposed to her employer’s collection agency that she could pay $50 bi-weekly, “they said it wasn't enough," the woman told reporters. "I would just have to go to court. They said I'd be owing them all my life." 

While the hospital system has repeatedly refused to answer questions from reporters regarding its peculiar bill collection tactics, and how they are supposed to embody the teachings of the Methodist Church, a retired Methodist minister from Memphis commented, "The employees should be paid an adequate minimum wage at the very least. Certainly, they should not be predatory to their own employees on medical bills. That's very much contrary to Scripture."

Three bishops from the United Methodist Church sit on the board of Methodist Le Bonheur. They have also failed to answer questions from journalists. 

If she manages to make her court-ordered payments on time and Methodist does not add any interest, Carrie Barrett (now 63) will be 90 years old by the time she pays off her debt to Methodist. Thousands of other poor residents of Memphis are in a similar situation.  

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