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Millionaire CEO of Nonprofit Hospital That Sues the Poor Promises Review of Policies

Methodist Le Bonheur Healthcare promised a policy review after an investigation by MLK50 and ProPublica found it had sued 8,300 patients — including its own employees — over medical debt. Its CEO has not responded to our questions.

Methodist University Hospital in Memphis.

This article was produced in partnership with MLK50, which is a member of the ProPublica Local Reporting Network.

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As criticism mounts about the aggressive debt collection practices of Methodist Le Bonheur Healthcare in Memphis, Tennessee, the nonprofit hospital system’s chief executive officer promised to reevaluate its financial assistance policies in the coming weeks.

“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,” said Dr. Michael Ugwueke, Methodist’s CEO and president, in a guest column published online Sunday in The Commercial Appeal.

An investigation published last week by MLK50 and ProPublica found that Methodist uses the courts as a hammer against low-wage patients who can’t afford their hospital bills. From 2014 through 2018, the hospital system affiliated with the United Methodist Church filed more than 8,300 lawsuits, according to an MLK50-ProPublica analysis of Shelby County General Sessions Court records. That’s more than all but one creditor during that five-year period.

One story chronicled the struggle of Carrie Barrett, who makes $9.05 an hour at Kroger, to pay her 2007 hospital bill for $12,019. The bill has ballooned to more than $33,000 due to interest and attorney’s fees. Another detailed how Methodist sues its own employees, some of whom make less than $13 an hour, for unpaid bills related to care delivered at its hospitals. Its health plan doesn’t allow workers to seek care at hospitals with more generous financial assistance policies.

Ugwueke, meanwhile, earned $1.6 million in total compensation in 2017, the most recent year for which such data is available. That same year, Gary Shorb, the hospital’s CEO from 2001 to 2016, earned more than $1.2 million for serving as Ugwueke’s adviser. In 2018, the hospital brought in $86 million more than it spent, according to an end-of-year revenue bond disclosure statement.

Shelby County Commissioner Tami Sawyer and State Rep. G.A. Hardaway, both Democrats, promised to try to persuade Methodist officials to offer more assistance to patients, including forgiving debts outright.

“I was sad and very disappointed because for me, it automatically called to mind what we already know, which is that poor people in Memphis are being preyed upon,” said Sawyer, who is running for Memphis mayor.

“I can’t make Methodist change its policies, but what I can do is work with the courts to see what we can do about getting advocates for people who don’t understand the process.”

Hardaway said he wondered if nonprofit hospitals should be asked to provide more specifics to the state about their charity and collection practices.

“Do they need to make periodic reports … that tell us not just what the charity care is, but that have more detailed analysis on how many folks they’re suing?”

Methodist has repeatedly refused to make its executives available for interviews and did not respond to a request for this story. In Ugwueke’s column, he did not disclose any details of the 30-day review.

Instead, Methodist has released statements defending itself, noting how it is the only health care system that has hospitals in all four quadrants of Shelby County and that it provides more than $226 million in community benefit. It has not addressed why its financial assistance policy is inferior to its peers or why it garnishes wages in a higher percentage of cases than other hospitals.

Methodist’s aggressive collection practices stand out in a city where nearly 1 in 4 residents live below the poverty line. And its financial assistance policy, unlike many of its peers around the country, all but ignores patients with any form of health insurance, no matter their out-of-pocket costs.

Methodist is not the only hospital whose business practices have drawn such scrutiny. Last week, a study published in the Journal of the American Medical Association and related media reports exposed similar tactics at Mary Washington Healthcare in Virginia. Two days later, the hospital announced that it was halting the practice of suing patients.

“We have decided it is in our community’s best interest to suspend the practice of pursuing legal action for unpaid bills,” the hospital said on its website.

Active Methodists and other Christians lamented the actions of the Memphis hospital.

“I’m just heartbroken for these people. I don’t think they will ever see light at the end of the tunnel unless something drastic happens, like their debt is forgiven,” said Phyllis Gay, a lifelong Methodist and member of St. Luke’s Methodist Church.

Wesley Sanders used to be a Methodist minister in Georgia and now works for a nonprofit health care organization in Dalton, Georgia. He worries that Methodist’s actions are a betrayal of the denomination’s founder, John Wesley.

“Wesley thought the Church of England had become a church of the ruling class and there wasn’t a place for the poor in the church,” Sanders said. “Health care for the poor has been, from the earliest days of Methodism, something that was important to him.”

In his guest column, Ugwueke wrote that the Methodist system had more than 857,000 patient encounters last year, more than 87,000 of which were with uninsured patients.

“Of the hundreds of thousands of patients we saw last year, we only went to court to collect debt from uninsured patients for less than one tenth of one percent of all the uninsured patients we saw,” he said.

Peter Gathje, co-director of Manna House, a hospitality ministry for people experiencing homelessness, said the MLK50-ProPublica reports clashed with his experience.

He recalled a woman who stayed in intensive care for more than a month. “Her quality of care was just superior and I know she wasn’t billed. She didn’t have insurance and she was homeless.”

But he took objection to Ugwueke’s description of the situation.

“They’re trying to say this is a minuscule amount of cases but if you’re the person being affected, it’s not minuscule,” Gathje said. “And if it is a minuscule amount of cases, that seems to make the argument that you could come up with a policy that isn’t so punishing of people,” he said.

Shelby County Commissioner Reginald Milton said he had talked to Ugwueke, who told him that the system is doing everything it can for patients who are uninsured.

A nonprofit hospital has “to balance itself between its humanitarian purposes and its reality as a business, and that line can easily be crossed one way or another,” said Milton, chair of the commission’s hospitals and health committee.

“I think Methodist has been an outstanding ally and has been a very good neighbor to the community,” he said.

“I do appreciate the fact that when an institution bears a cross on the outside of its building, and garners tax exemption, there is a higher calling and responsibility to look at finding every possible way to care for those in need.”

In a note to faculty and staff, Dr. Steve Schwab, chancellor of the University of Tennessee Health Science Center, which is affiliated with Methodist, said it “is committed to the health and well-being of all citizens of Tennessee regardless of their financial status. … UTHSC believes it is essential that we and our core teaching hospitals review our billing and collection practices frequently to make certain we maintain fairness for all who seek our health care services.”

Wendi C. Thomas is the editor of MLK50: Justice Through Journalism. Email her at [email protected] and follow her on Twitter at* *@wendi_c_thomas.

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