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The Conway hospital sues its patients more than any other hospital in SC

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Courtney Hill meets her son, Anthony, 9, at the bus stop in their neighborhood in Myrtle Beach on Tuesday, March 3, 2020. Hill, a single mother, was sued by Conway Medical Center after she fell behind on payments from an emergency room visit for pneumonia. Grace Beahm Alford/Staff

As the coronavirus spread, evictions were halted, Congress planned to send everyone $1,200 and thousands of Horry County residents filed for unemployment. But the local hospital kept suing its patients.

It is business-as-usual for the Conway Medical Center, which took roughly 1,600 people to court last year, seeking at least $5.1 million in past-due bills, a Post and Courier investigation shows.

From 2015 to 2019, the Conway Medical Center filed more than 8,000 lawsuits in Horry County, home to 344,000 people in the state's Pee Dee region. It is the only hospital in the state that regularly takes people to court. No other South Carolina-based hospital — private or nonprofit — comes close.

They included a new mother sued over a $900 bill for a C-section, a patient who owes the hospital $280,000 and a woman on disability benefits and the state's heart transplant list.

Since South Carolina announced its first two COVID-19 patients on March 6, the Conway hospital has filed more than 100 lawsuits, even as it and every other hospital in the state prepared for a crushing surge in patients with the sometimes-deadly respiratory illness. 

No patients have been served with a lawsuit in that time, a spokeswoman said, and the hospital halted other collection efforts on March 16.

Many health systems, including all of Charleston's hospitals, never sue their patients. 

Medical bill collectors contact nearly one in eight Americans per year, a Consumer Financial Protection Bureau survey showed in 2017. Conway Hospital's debt collection practice stands out in a city where one in five residents live below the poverty level. 

What's more, the medical center spends less than 1 percent of its expenses on financial assistance, a quarter of the average among its nonprofit peers in South Carolina.

Constant bills

Courtney Hill resisted seeking medical care for days, until late one night when she couldn't breathe and felt like her lungs were underwater.

Finally, she agreed to go to the hospital. Her grandmother rushed her to the nearby Conway Medical Center, which has been the family's go-to in times of need.

At the time, she didn't realize it is also the South Carolina hospital most likely to sue its patients.

A doctor told her she had pneumonia. Hill stopped by the front desk on the way out. She gave the hospital the $20 in her pocket and went home with a $1,232 medical bill. Hill makes about $12,000 per year at Walgreen's; at the time, she didn't have health insurance.

When the 30-year-old single mother fell behind on payments, she got a surprise: a sheriff's deputy knocking on her door. 

The hospital in Conway filed two suits against Hill in 2019, seeking $1,007. She is not alone.

The Post and Courier's analysis found eight other hospitals that sued patients in 2019. Combined, they filed one-fifth of the suits that Conway Medical Center did.

The hospital makes its financial assistance policies widely known to patients, and only attempts to collect debts "as a matter of last resort," Gene Warren, a spokesman for the hospital, said in a statement.

"Conway Medical Center understands that for our patients dealing with medical issues, the related financial responsibilities can quickly become overwhelming," he said.

Most of the suits are in small claims court, Warren said, and don't involve people without health insurance.

But 47-year-old Tasheema Kelly said she never heard about the hospital's charity policies. Kelly contracted a hereditary heart disease in 2014, and since then, medical bills have been a constant. 

Only one hospital took her to court. 

The Conway hospital first took Kelly to court in 1997. The hospital has filed seven cases against her over the years. 

Kelly, who worked a 40-hour week at a local day care until recently, collects disability benefits today. Her fixed income doesn't leave room for the $21,895 judgment the hospital won in November. Yet, when she has a medical emergency, she is forced to go back to the hospital that sued her.

"I haven't had to go to Conway for a while," she said. "Thank God for that." 

The Conway hospital's financial aid policy states people on entitlement programs won't qualify for help.

Kelly went to the Conway Medical Center twice in recent years: First, a stroke in 2018, then a heart attack in 2019. Both times, she was transferred to the Medical University of South Carolina, where she has a spot on the heart transplant list. MUSC's charity care policies cut her bills down to a few hundred dollars.

To stay on the heart transplant list, she also has to maintain her $177-per-month private insurance plan and keep up with her dozen medications. Plus, there is a mortgage and the utilities.

"I take pride in paying my bills," she said. But, "when you don't have it, you don't have it."

Two-thirds of Americans are worried they won't be able to afford medical bills, a study published in JAMA found.

One organization is taking a novel approach: purchasing medical debt on a volume discount, then forgiving it.

RIP Medical Debt says it has forgiven more than $1 billion in medical bills so far. Craig Antico, co-founder of the nonprofit and a 30-year veteran of the collections industry, said hospitals deserve to be paid for what they provide — but only by people who can actually afford it.

"The ones who can pay, you should pursue with all vigor," Antico said.

The collections industry for medical debt alone is worth $8 billion, he said, representing half of all collections in the United States.

But many people can't afford their medical debts, Antico said. And some hospitals are better than others at sorting out who can and can't pay.

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Not so charitable

To qualify for free care from Conway Medical Center, patients have to make below the federal poverty level, which is $21,330 for a three-person household and $12,760 for a single person. This is the lowest threshold for free care among all nonprofit hospitals in South Carolina, the newspaper's investigation shows. 

In a response to the newspaper, hospital leaders said their own federal tax document is incorrect, and does not reflect its true policy; the chief financial officer signed the document swearing to its accuracy. The hospital, they say, does offer free care for patients who make double the federal poverty level or less. 

Either way, Conway Medical Center spent about $1.3 million in financial aid during the 2017 fiscal year — a little more than the retiring CEO's $1.1 million compensation, according to its filings with the IRS. If it wasn't a nonprofit, Conway hospital would have owed the city and county at least another $1.2 million in property taxes in 2019.

The hospital's own financial statements report a different, higher cost of charity care in 2017: $3.6 million.

South Carolina is among the half of all states that have no law placing restrictions on how nonprofit hospitals can collect debts, according to the Hilltop Institute at the University of Maryland

For most hospitals in South Carolina, anyone who makes as much as double the federal poverty level qualifies for free care. At Roper St. Francis in Charleston, it's triple, the most generous nonprofit policy in the state. 

Laws in a handful of states require nonprofit hospitals to give back a certain amount, meant to ensure communities are getting their money's worth for the tax break that comes with being a nonprofit, the Hilltop Institute's work shows. In Illinois, for example, nonprofit hospitals have to provide community benefits at least equal to the value of their tax break. No law like this is on the books in South Carolina.

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The Conway Medical Center filed hundreds of cases against its patients last year, seeking at least $5.1 million in past-due bills, a Post and Courier investigation shows. Grace Beahm Alford/Staff

Schipp Ames, spokesman for the S.C. Hospital Association, said research shows community benefits provided by hospitals and health systems are worth 11 times the value of the tax exemptions nonprofits receive. Hospitals are also reimbursed by the federal government for providing free care.

"While hospitals are often the largest employer and economic engines in the communities they serve, many operate on slim margins as they work to adjust to changing regulations and reimbursement policies while South Carolina continues to have a large number of uninsured individuals," Ames said in a statement.

Ames said new state laws for nonprofit hospitals are not needed.

In South Carolina, ideas of what is fair when chasing down debts vary. 

Some hospitals in South Carolina can take patients' tax refunds to pay off past-due bills. MUSC is one of them, though a spokeswoman said four attempts to reach the patient are made before they take that step. MUSC never sues patients who can't pay their bills, she said.

Health systems have other collection options, including selling medical debt to third-party buyers. Some hospitals in South Carolina may take this route. Though difficult to track, roughly a third of hospitals sell their debts nationwide. 

In its written collections policy, Conway Medical Center says resorting to a lawsuit is an "extraordinary action." Yet the hospital filed six suits for every working day of the year, the newspaper's review shows. It would be the equivalent of the hospital suing one in every 100 patients who walked through its doors in 2018.

One private attorney, Michael Sartip, represented the hospital in more than 1,000 cases last year. Sartip, when asked for comment, deferred the newspaper's questions to the Conway Hospital. But his law firm's website says its collection efforts have a high rate of success and leads to "a more satisfying relationship between the provider and their patients, with every effort made to avoid damaging that relationship."

Roper St. Francis' policy says the hospital will almost never file a lawsuit against a patient, and it will not attach liens to debts. McLeod Health, which runs hospitals in the Pee Dee region, has similar guidelines as Conway Medical Center's, though it hasn't filed a single suit against a patient in at least five years. In Greenville, St. Francis health system's policy doesn't allow for liens or lawsuits, but the hospital may report the debt to credit agencies.

Some hospitals also commit not to collect debts below a certain amount. But records show Conway Medical Center won judgments for sums as small as $221.

A Conway Hospital family

Originally built on a 4-acre lot in the late 1920s, Conway Hospital has remained in local hands. Today, the medical center sits among car dealerships and strip malls on U.S. Highway 501 between Conway and Myrtle Beach. 

Hill's grandmother worked for the hospital for decades. The family lives together in a house in Myrtle Beach. When Hill became pregnant, she gave birth at the Conway Medical Center. Eight years later and after several years of overnight shifts at gas stations, she has a full-time job at Walgreen's. She is working on saving money to afford a place for her and her son, 9-year-old Anthony, to live by themselves. 

Hill said that before she was served with a lawsuit, she applied for the hospital's financial aid program. She never heard back. She is now on a $25-per-month payment plan with the hospital. 

"We were a big Conway Hospital family, up until now," Hill said. "That was the only hospital to us."

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Courtney Hill plays with her her son, Anthony, 9, after school Tuesday, March 3, 2020, in Myrtle Beach. Hill, a single mother, was sued by Conway Medical Center after she fell behind on payments for an emergency room visit for pneumonia. Grace Beahm Alford/Staff

Hill made a $300 payment on her bill in early 2019, but the court costs from the two suits the hospital filed last year tacked on another $320. The balance stands at $987.

About 20 percent of Conway's population live below the poverty line — much higher than the state's average. 

The hospital also provides 1,600 local jobs at the hospital and its community outposts. And even as independent hospitals in the state struggle to keep their doors open, Conway Hospital pulled in $161.8 million in revenue from patients in 2018, ending the year well in the green.

Most hospitals don't make a habit of filing lawsuits because "it's not really a great message to send to consumers," said Ira Rheingold, executive director of the National Association of Consumer Advocates. 

For those that do, Rheingold said, there is an incentive to file as many cases as possible. The more suits filed, the greater the success rate. The Conway hospital often files dozens of cases on the same day.

Courts across the country are overwhelmed by debt collectors, Rheingold said. As a result, some judges sign off on judgments without pause.

"Justice is not being administered very fairly in these cases," he said.

If the consumer shows up with an attorney, Rheingold said, they almost certainly will not be held liable for the bills. But few do so. Of the hundreds of people Conway Medical Center sued in 2019, just 13 hired a lawyer. None had a judgment placed against them.

The lawsuits aren't stopping, meanwhile: The hospital filed another 14 on Wednesday.

Editor's note: This article has been updated with new responses from Conway Medical Center.

Reach Mary Katherine Wildeman at 843-937-5594. Follow her on Twitter @mkwildeman.

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