Sued Poor Patients Until It Came Under
Scrutiny
November 27, 2019
By Wendi C. Thomas, Maya
Miller, Beena Raghavendran, Doris Burke & Andrea Morales/MLK50
After nine visits to the emergency room at
Baptist Memorial Hospital in Memphis, Tenn., in 2016 and 2017, Jennifer Brooks
began receiving bills from an entity she'd never heard of, Southeastern
Emergency Physicians.
Unsure what the bills were for, Brooks, a
stay-at-home mother, said she ignored them until they were sent to collections.
She made payment arrangements, but when she was late, she said the collection
agency demanded $500, which she didn't have.
In December, Southeastern sued her for more
than $8,500 in unpaid bills — a third of what her husband makes per year as a
cook.
The case against Brooks is one of more than
4,800 lawsuits Southeastern has filed against patients in Shelby County General
Sessions Court since 2017. In the first six months of this year, Southeastern
filed more lawsuits than local hospitals Methodist Le Bonheur Healthcare,
Baptist and Regional One combined.
Lawsuits against poor patients over unpaid
medical debts have received widespread media attention over the past few years.
In almost all cases, the plaintiff has been a hospital system, often a
nonprofit.
What sets the practices of Southeastern, and
its parent, TeamHealth, apart is that it is a physician staffing firm that
contracts with the doctors who treat patients in four of Baptist's emergency
rooms around the region. Physicians historically have avoided suing patients en
masse, instead choosing to send unpaid bills to collections or writing them off
as bad debt.
TeamHealth
is owned by the Blackstone Group, a private equity firm (HEDGE FUND). In 2017,
Blackstone acquired TeamHealth and its subsidiary Southeastern in a $6.1
billion deal. It was just one in a growing number of large private equity
investments in health care in the last decade.
"There is this tension between being a
health care provider and doing what's best for their care ... and being a
profit-maximizing firm that aggressively goes after patients," said Brian
Shearer, legal director for Justice Catalyst Law, a New York-based social
justice nonprofit, though he added that he wasn't aware of any lawsuits by providers
like Southeastern.
TeamHealth initially defended the lawsuits in
an interview with MLK50 and ProPublica, saying they reserved legal action only
for patients who'd made no attempt to pay.
But late last week, faced with additional
questions by the news organizations, the company reversed course, issuing a
statement saying it would no longer sue patients and wouldn't pursue the
lawsuits it has already filed. "It's difficult to ensure that only
patients with a strong ability to pay are ultimately impacted, so we've decided
to eliminate it," a TeamHealth spokesman said.
TeamHealth also had policies in place that
made it difficult for patients to access charity care, a form of financial
assistance for low-income patients. Two former TeamHealth employees told MLK50
and ProPublica that they were instructed not to mention the term charity care
when patients called with questions about their bills.
After the company was asked about this,
TeamHealth president and chief executive officer Leif Murphy announced a new
discount policy for patients without insurance.
"Effective December 1, 2019, we are
implementing discount policies for our uninsured population to reduce the cost
of care by as much 90%, and up to 100[%] when necessary. We will proactively
include eligibility criteria in our invoices to help promote participation
rather than force patients to seek assistance," Murphy wrote in
a letter to employees.
TeamHealth's abandonment of its lawsuits, as
well as the implementation of a new financial assistance policy, marks the
second time in five months that a major health care entity in Memphis has
overhauled its practices amid questions from MLK50 and ProPublica. In
July, Methodist, a nonprofit faith-based hospital system, announced it would
curtail its lawsuits over unpaid debt against poor patients. It has
since zeroed out the balances owed by more than 5,100 patients and
reduced bills for more than 2,200 others, according to a hospital spokesperson.
TeamHealth declined to talk about the suits
involving patients interviewed for this story, even though the patients gave
the company permission to do so.
Mark Rukavina, business development manager
at Community Catalyst's Center for Consumer Engagement in Health
Innovation, a national advocacy organization, said nonprofit hospitals
shouldn't work with physicians groups that aggressively pursue patients for medical
debts.
"They could say, 'If you're going to
provide services in our hospital, you're going to comply with our financial
assistance policy,'" Rukavina said.
The lawsuit from Southeastern was just a
small part of Brooks' debt, but learning that TeamHealth won't pursue her case
was good news, she said. Plus, she now has TennCare, the state's version of
Medicaid, which she hopes will spare her from other large medical bills.
She and her husband still "go from
paycheck to paycheck," she said, and with $60,000 in student loans and
thousands more in credit card debt, she thinks bankruptcy – or a winning
lottery ticket – is the most likely path out.
"It definitely helps though, that you're
not having that [doctor's bill] hanging over your head," she said.
TeamHealth's
fast rise to a national leader
TeamHealth's roots in Tennessee stretch back
40 years, to when emergency medicine was recognized as a specialty.
In 1979, a small group of ER doctors in
Knoxville, Tennessee, landed contracts to operate two emergency rooms.
Southeastern's initial strategy was to focus
on hospitals within a two-hour drive of Knoxville, said co-founder
Dr. Lynn Massingale in a company video. But the radius expanded to a
two-hour plane ride, he said in an interview posted on TeamHealth's
website, and, gradually, across the country.
In 1994, Southeastern merged with three other
doctors groups to become TeamHealth. It had 200 ER physicians at 27 hospitals
in four states, according to a Modern Healthcare article published that year.
TeamHealth now has more than 16,000
physicians and clinicians, according to the company's website. It provides
medical professionals to 3,300 medical facilities and physician
groups in 47 states.
Private
equity's growing role in health care
With $554 billion in assets under
management, the Blackstone Group is one of the world's largest private equity
firms (SWAMP RAT).
Increasingly, health care is an attractive
target for private equity, thanks to an aging population and a rise in chronic
disease. The growth is highest in specialties where the need for a
long-standing doctor-patient relationship is low, such as emergency medicine,
anesthesia and care provided to patients when they are hospitalized (a medical
specialty known as hospitalists).
The
2017 acquisition was Blackstone's second investment in TeamHealth, after buying
it in 2005, taking it public in 2009 and then selling its interest four years later.
Proponents of private equity argue that its
profit-driven mission helps keep afloat sectors that serve the public good. At
least 150 public pension funds invest in private equity, including Blackstone,
with higher annual returns than other types of investments, according to a
recent report produced by an industry lobbying firm.
But critics such as Eileen Appelbaum,
co-director of the nonprofit Center for Economic and Policy Research, a
left-leaning think tank based in Washington, D.C., lament its growing influence
in health care.
"Private equity firms buy small
competitors to add on to an initial acquisition, building national powerhouses
without any antitrust supervision," Appelbaum testified at a congressional
committee hearing last week about private equity. She cited
TeamHealth and its competitor Envision Healthcare as prime examples
of how this practice harms consumers. "They use surprise medical bills, or
the threat of such bills, to get much higher payments than other doctors
receive, driving up health care costs."
A New York Times investigation in 2016
found that after private equity firms took over ambulance companies, some
response times slowed and billing practices became more aggressive. Soon after,
the companies went bankrupt — leaving gaps in emergency response across the
northeast. Citing that report, Rep. Maxine Waters, D-Calif., the
chairwoman of the House Financial Services Committee, raised
concerns in the hearing last week about private equity firms managing public
services including health care.
In 2017, the year Blackstone acquired
TeamHealth, the disclosed value of private equity health care deals exceeded
$42 billion — the highest level since 2007 — according to a
market research report. The following year, the private equity firm KKR (another SWAMP RAT)
acquired Envision, which operates Emcare, another physician staffing firm,
for $9.9 billion.
In public filings,
Emcare reported that it operated in 45 states in 2017, while
TeamHealth said it had a presence in 47 states that year.
TeamHealth estimated that the market for
emergency medicine was $12 billion, according to its filing with the
U.S. Securities and Exchange Commission. It claimed a 17% share of that market,
which in 2016 accounted for 57% of its revenue.
Appelbaum, like other experts interviewed for
this story, had not heard of instances in which private equity-backed doctors
groups sued patients.
In separate interviews before TeamHealth said
it would stop suing patients, officials at TeamHealth and Baptist said
Blackstone's acquisition had no effect on collection efforts.
"Yes, we were acquired by Blackstone in
2017," said Joe Carman, TeamHealth's chief administrative officer.
"But we have not had any change in practice as it relates to pursuing
patients and legal strategies in that time."
Baptist's Little agreed. "We've not seen
any changes," he said.
But the lawsuits show something began to
change about the same time.
From
zero to hundreds of lawsuits
In 2011, Southeastern did not appear as a
plaintiff in any lawsuit filed in Shelby County General Session Court. In 2013,
there were just over 100 suits filed by Southeastern, and the next year, more
than 600.
Both Little and Carman speculated that
increased volumes of patients treated at Baptist's emergency departments were
partially to blame.
However, such an explanation is not borne out
by the data.
Between fiscal 2016 and 2018, the number of
visits to three of the ERs staffed by Southeastern doctors — Baptist Memphis,
the suburban Baptist Collierville and Baptist DeSoto in Southaven, Mississippi,
just over the state line — grew by 12%, according to figures provided by
Baptist. But the number of Southeastern lawsuits grew by 132% — from 798 to
1,855 — from calendar year 2016 to 2018, according to Shelby County General
Sessions Court records.
One of the defendants is Laurie Kimbrough,
62, who went to Baptist Memphis in March 2017 complaining of flu symptoms.
When the bill arrived, she tried to make
payment plans with Baptist but said the representative she talked to wouldn't
agree to a payment she could afford.
The bill went to collections and this March,
Baptist sued her for nearly $1,300, not including court costs and attorney's
fees.
By that time, she'd lost her job and had
started a small lawn care business. When the weather is good, she manages to
make a few hundred dollars per week, if the lawn mower and blower don't need
repairs.
Family friends gave her money to pay off the
Baptist bill, but three weeks after Baptist sued her, she was sued by
Southeastern.
Even though she owed around $400, Kimbrough
said she didn't have it. When a longtime friend learned she'd have to pay
interest on the relatively small bill, he gave her the money and refused to let
her pay him back.
In February 2018, Kimbrough went to Baptist's
emergency room again with flu symptoms. The bill was over $1,300, but she was
able to negotiate the hospital down from the $100 per month payment it
initially demanded.
"I said I'll come up with the $55 a
month, even if it means I have to eat Vienna sausages 7 days a week,"
Kimbrough said.
Court records show that on Nov. 4,
Southeastern sued Kimbrough again. She has yet to be served with the lawsuit.
Charity
care elusive by design?
In interviews, two former TeamHealth call
center agents said they were instructed not to mention charity care unless
patients did so first.
Between 2017 and 2018, Sharon Lovingood was
one of about 100 employees fielding patients' calls from a single-story
TeamHealth office in Knoxville. "We were the first person they talked to
for any issues," she said. When she worked in the U.S. Department of
Education's student loan division between 2012 and 2017, managers encouraged her
and her colleagues to find solutions for those who called in.
But not at TeamHealth.
"A lot of times, a patient would call in
and say, 'Hey, can you give us a discount?' But we had to say, 'No, I can't do
that,' because we weren't allowed to say, 'Well, did you apply for charity care
at the hospital?'" Lovingood said. "They didn't want us doing
that."
She asked her supervisors why and said she
was told that the hospitals and billing groups TeamHealth had contracts with
didn't want call center workers bringing it up. Lovingood said she left the job
in February 2018 because she could not stomach the restrictions that stopped
her from helping people. "I was miserable working there."
Sherry Breitung, who worked as a national
patient service representative in Knoxville from 2014 to 2018, also said she
asked for an explanation about the policy but didn't get one. One thing was
clear, though: "We weren't allowed to mention charity care to the
patients."
Since all of their calls were monitored and
reviewed by supervisors, Breitung and Lovingood, who don't know each other,
each said they devised their own work arounds — such as asking patients,
"Did the hospital help you?" But the four minutes allotted per phone
call wasn't enough to help patients understand their options, they said.
Carman, on the other hand, said he thought
call center agents were instructed to bring up charity care. "We are
attempting always to try to understand their circumstance, and we're trying to
understand charity care."
After additional questions, TeamHealth CEO
Murphy said in his letter to employees that effective Dec. 1, the company would
begin including eligibility criteria for charity care in patients' invoices to
make it easier to find.
Hospitals are abdicating their responsibility
to protect patients from financial harm when they hide behind firms to which
they've outsourced services, said Michele Johnson, executive director of the
Tennessee Justice Center, which advocates for expanded health care access.
"Particularly with hospitals that have a
mission that is aligned with treating low-income folks with fairness ... it's
unfortunate that they're not having people who intersect with their patients
follow that same charitable mission," Johnson said.
Health care is a necessary and often
unavoidable expense, Johnson said. "These are not designer jeans. These
are not video games. This is a whole different thing."
Questions
remain for hospital, patients
TeamHealth declined to answer questions about
its timeline for dropping existing lawsuits or whether its decision will apply
to lawsuits that have already resulted in judgments, saying in a statement,
"TeamHealth will not file additional cases naming patients as defendants
and will not appear in any pending case."
After MLK50-ProPublica's investigation
into Methodist Le Bonheur Healthcare's debt collection practices, the
nonprofit hospital dropped hundreds of lawsuits for unpaid medical
bills and expanded its financial assistance policy to cover families making up
to 250% of the federal poverty guideline, which will cover more than half of
Memphis-area households. It has not filed any lawsuits since July 3.
It's unclear whether TeamHealth's change will
shift the responsibility of unpaid bills from patients to Baptist.
In his letter to employees, TeamHealth's CEO
pointed the finger at insurance companies, noting that the share of insured
patients with deductibles of more than $1,000 has risen sharply over the last
five years. (In most cases, patients must pay deductibles out of pocket before
their insurance coverage kicks in.)
Through a spokesperson, Blackstone said it
was not involved in "these specific practices at the company, which we
understand are quite common in the broader industry. However, we fully agreed
with and support TeamHealth's determination to discontinue it."
TeamHealth's decision comes just in time for
Loretta Baxter, who went to court Friday to keep Southeastern from garnishing
her paycheck.
Baxter, 33, didn't have insurance when she
visited a Baptist ER in 2017 for stomach pain and couldn't afford the $1,111
doctor's bill.
In April, Southeastern sued her, and on
Thursday, her employer told her that it had received a garnishment attempt that
could take up to 25% of her paycheck.
That would leave her with $250 less to cover
her rent, car note, insurance and expenses for her three children. She makes
about $11 an hour as a caregiver at a social service organization for people
with disabilities.
Baxter left court with paperwork to take to
her employer that would postpone the garnishment until a Dec. 2 hearing.
"I try not to let things stress me out because stress can kill,"
Baxter said at court.
When a reporter asked TeamHealth how its decision
would impact patients like Baxter, TeamHealth said that the outside collection
agency "is sending a release to remove the garnishment and will be working
with the court system to process it as soon as possible."
Wendi C. Thomas is the editor of MLK50: Justice
Through Journalism. Email her at wendicthomas@mlk50.com and follow her on
Twitter at @wendi_c_thomas.
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