The largest nonprofit hospital system in Memphis, Tenn., is erasing the debts owed by more than 6,500 patients it sued for unpaid hospital bills. Methodist Le Bonheur Healthcare had come under fire for its practice of aggressively pursuing medical debt from poor patients, in a city where nearly 1 in 4 residents lives below the poverty line. The move to forgive outstanding bills comes amid an overhaul of its debt collection processes announced in late July.

The dramatic shift was prompted by an investigation from nonprofit news organizations MLK50: Justice Through Journalism and ProPublica that revealed that Methodist filed more than 8,300 debt lawsuits from 2014 through 2018, including against its own employees. Methodist had doggedly pursued low-income defendants who had little ability to pay, often garnishing their meager paychecks.

The single-page “case satisfied” notices filed by Methodist are coming into the Shelby County General Sessions Court faster than staff can process them. A court administrator estimated a backlog of about 4,500 Methodist notices are waiting to be entered into the court’s system.

From July 30 through Tuesday, the court had logged more than 2,300 notices submitted by the hospital system that wiped away patients’ debts. That’s more than nine times the number of notices filed by Methodist in the first six months of 2019.

For now, it appears that Methodist is no longer using the courts as a collection agency, a practice that was roundly criticized by health care experts, some elected officials and members of the United Methodist Church, with which the hospital is affiliated. Since July 3, Methodist has not filed any new debt collection lawsuits or garnishment attempts.

Methodist’s turnaround elated defendants and consumer advocates.

Among the defendants who no longer owe is Carrie Barrett, a part-time Kroger employee featured in one of the MLK50-ProPublica articles. Barrett’s case began in July 2007, when a two-night stay at Methodist Bonheur Healthcare, where doctors performed a heart catheterization, left her with a $12,019 bill. In 2010, Methodist sued her for more than $16,000, one-third of which was attorney’s fees.

Over the years, thanks to interest and court costs, Barrett’s debt climbed to more than $33,000. If she had paid $100 per month as ordered by the court, she would have been 90 by the time she paid it off.

Nonprofit Hospital That Sued Poor Patients Just Freed Thousands From Debt

Photo: Andrea Morales for MLK50
Caption: Carrie Barrett, a former defendant in a suit brought by Methodist Hospital, testifies during service at Apostolic Fellowship Church in Memphis, Tenn., on Sept. 15. Her debt to the hospital was cleared following an MLK50 and ProPublica investigation into the debt collection practices.

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