By Giacomo Bologna
Mississippi Center
For Investigative Reporting

Patty McDaniel was shopping for Christmas presents in Flowood with her daughter on a cool, cloudy day in 2014. She pulled up to a red light outside the shopping center. It was around lunchtime.

As McDaniel waited in her Toyota Prius for the light to turn green, a silver BMW sedan driven by a 16-year-old girl barrelled through the intersection, police said, failing to yield to an SUV turning left.

The two cars collided, knocking the SUV into McDaniel and spinning her car around.

“It hit so hard, my left shoulder hit the side of the car and my head hit the glass, the window,” McDaniel said. “I’ve never been in a wreck like that.”

Police showed up, and so did emergency personnel. McDaniel and her daughter got out of the car with some assistance – one of the doors had to be pried open – and surveyed the damage to her beloved Prius. McDaniel had recently finished paying it off.

McDaniel took stock of the situation. She had just hit her head against the driver’s side window so hard that strands of her hair were stuck between the glass and door frame, but she wasn’t bleeding. She declined care from emergency personnel. She didn’t go to the hospital. McDaniel had bigger problems on her mind, like how she was going to get to Texas for her family’s Christmas.

The crash was scary and disruptive, but McDaniel thought she was walking away unscathed.

McDaniel was wrong. Her pain – first physical, then financial – would not go away.

McDaniel is one of thousands of Mississippians who have gone to St. Dominic for medical care and were later sued over medical debt, a tactic that rarely brings much revenue to hospitals, but can have devastating impacts on patients. For McDaniel, it led to bankruptcy.

She told her story to the Mississippi Center for Investigative Reporting, which has been looking into nonprofit hospitals that sue patients over medical debt. Our investigation found that St. Dominic and its debt collectors:

• sued thousands of patients, many of whom working in low-wage industries like fast food and retail,
• garnished wages, and seized money from patients’ bank accounts.
• sued more than a hundred of its own employees over medical debt.
• Inflated patients’ bills by a third or more with attorney’s fees, court costs, and 8% interest rates.
• billed thousands of Mississippians when those patients should have qualified for free or reduced medical care.
• continued suing patients and garnishing their wages throughout the COVID-19 pandemic, while the federal government gave the hospital millions of dollars in pandemic relief funds.

McDaniel, in her mid-50s at the time of the car crash, had chronic pain in her arm and shoulder. She had been working part time as a school bus driver and a receptionist and living in a mobile home park on the border of Jackson and Clinton. She said she went through a series of treatments for her pain, which included a doctor, a bone specialist, tests at a lab, physical therapy, a nerve doctor, a body scan, and a pain management doctor who injected medication into her neck.

“There were so many people I had to pay (that) I had a notebook,” McDaniel said. “Just trying to pay these people. Just trying to be fair.”

Then the debt collectors started calling.

“They didn’t like my little measly payments, but I was doing the best I could do.”

In January 2018, a debt collector sued McDaniel, demanding $1,975 for the physical therapy clinic and $3,276 for St. Dominic. The debt collector tacked on an additional $1,750.31 worth of attorney’s fees, plus court costs and an 8% interest rate.

“They came to my work and served me,” McDaniel said. “I was freaking out. I’m being served? It’s like something on TV. ‘Are you Patty McDaniel?’”

She was more than $20,000 in the hole, according to court filings, and most of that was medical debt. She was then a full-time receptionist, but after her expenses, her net monthly income was $138.

McDaniel didn’t want the debt collector for St. Dominic garnishing her wages, and she felt there was only one option left to protect herself.

“Because of them suing me, I had to file bankruptcy,” McDaniel said.

THOUSANDS OF ST. DOMINIC PATIENTS SUED OVER MEDICAL DEBT
St. Dominic has a campus in Jackson, north of downtown and along I-55. With 571 beds, it’s one of the state’s largest hospitals and oversees a chain of clinics in the metro area. It has annual operating expenses of roughly half a billion dollars. It is one of central Mississippi’s biggest employers, with nearly 5,000 employees, according to recent tax filings.

The federal government requires nonprofit hospitals to publish reports every three years, assessing the needs of the community. In Jackson, where more than a quarter of residents live in poverty, St. Dominic says the community’s most urgent need is access to affordable healthcare.

But St. Dominic’s report failed to look into its own debt collection practices.

If the hospital had, here’s what they might have found: Patients of St. Dominic and its clinics were sued more than 3,600 times in Hinds County between 2018 and 2020, a rate of about 100 per month.

These figures are likely a drastic undercount of the total number of St. Dominic’s patients sued for medical debt. For this story, the Mississippi Center for Investigative Reporting looked at lawsuits in Hinds County, the state’s most populous county with about 230,000 residents. That meant combing through thousands of digitized records in county court and more than 50,000 paper records in justice court.

But we found cases of St. Dominic’s patients being sued in neighboring Madison County and Rankin County, suggesting the actual number of patients sued across the region could be hundreds – if not thousands – more.

Not even St. Dominic’s employees are safe. While top executives make several hundred thousand dollars annually and some doctors clear more than $1 million, many of the workers are apparently unable to afford medical care at the hospital.

The Mississippi Center for Investigative Reporting was able to identify at least 120 cases between 2018 and 2020 in which St. Dominic and its debt collectors sought to garnish the wages of St. Dominic’s own employees. Employees of St. Catherine’s, a retirement home affiliated with St. Dominic, were also targeted for wage garnishments.

Garnishments were sought in 69% of the cases reviewed for this story. Most of the garnishments were wage garnishments, but some people had their bank accounts garnished.

Those garnishments can be especially harmful to families depending on a paycheck to make ends meet, said April Kuehnhoff, a staff attorney at the National Consumer Law Center.

“They have an extremely aggressive debt collection policy here,” Kuehnhoff said of St. Dominic. “Many other hospitals across the country have stepped back from these policies and recognized how damaging they are to consumers … The impact on families can be huge and devastating. On the other hand, the actual revenue generated for the facility can be very small.”

The Mississippi Center for Investigative Reporting asked to interview executives at St. Dominic about the hospital’s debt collection practices. Through spokesman Ryan Cross, the executives declined, citing a surge in COVID-19 cases. Cross provided a statement, saying St. Dominic does everything it can to ensure patients can afford their bills.

“To maintain our commitment to the community and continue important healthcare services to those in need, we have a responsibility to be financially sustainable, just as all organizations must,” the statement said. “While we do our best to operate as efficiently as possible, we also need every individual to do their part in trying their best to pay their healthcare bill.”

Cross would not say how much revenue St. Dominic generates from suing patients, but it’s likely to be very little.

When a team of researchers from Johns Hopkins University studied medical debt lawsuits filed by 28 hospitals in Texas, they found the hospitals were suing patients for an average of 0.15% of their total revenue.

Erin Fuse Brown, a law professor at Georgia State University and an expert on health law and policy, said medical debt lawsuits – when pursued aggressively – are often estimated to bring in 0.5 to 1% of a hospital’s revenue, which she called “a drop in the bucket.”

Mark Rukavina is a program director at Community Catalyst, a national nonprofit that advocates for health equity and justice. He said it can be hard to know how much revenue these lawsuits actually generate for hospitals, but “it’s certainly lucrative for the debt collection industry.”

“It’s a big business for the collection agencies. What it yields for the hospitals? I don’t know,” Rukavina said of medical debt lawsuits. “That’s a good question for St. Dominic… is it worth it? Worth the damage it inflicts on low-income people?”

The University of Mississippi Medical Center, a state-owned hospital located next to St. Dominic, does not sue any patients over medical debt.

Baptist Medical Center, Jackson’s other nonprofit hospital, does sue patients. It uses a Georgia-based debt collector, but appears to be less aggressive than St. Dominic. Between 2018 and 2020, fewer patients of Baptist Medical Center (2,575) were sued over medical debt in Hinds County, and those patients were less likely to have their wages garnished.

It’s unclear how or when St. Dominic first used aggressive debt collection tactics, but the practice extends at least as far back as 2001, when St. Dominic contracted with the debt collector Smith, Rouchon & Associates for $1.4 million, according to tax documents.

St. Dominic is now under relatively new ownership.

After 70 years of affiliation with an Indiana-based religious order, St. Dominic formally came under the ownership of Louisiana-based Franciscan Missionaries of Our Lady Health System in July 2019.

Despite a new owner, patients kept getting sued.

Lawsuits continued through the pandemic, though slowed around mid-summer. Between March and December of 2020, patients of St. Dominic were sued 480 times in Hinds County.

During a time when many families lost income and work, debt collectors were seeking garnishments against hundreds of St. Dominic’s patients. Some of the patients were employees of Waffle House, Goodwill Industries, Walmart, the Mississippi Department of Corrections, AutoZone, Sanderson Farms, Walgreens, and more.

The collections actions took place even as the federal government sent millions of dollars to St. Dominic for pandemic relief. To date, St. Dominic has received about $50 million in pandemic aid money from the federal government.

Rukavina said there ought to have been rules for hospitals like St. Dominic that would have provided relief to patients, too.

“Having pursued lawsuits during the midst of the pandemic while receiving millions of dollars of federal money really speaks to the need for more accountability related to those funds,” Rukavina said. “… That’s wrong. That’s just wrong.”

For years, St. Dominic had a policy that allowed the hospital and its debt collectors to aggressively target indebted patients. A board of directors largely made up of nuns approved a collections policy that allowed them to:

• Defer or deny medical treatment until a patient paid past due medical debt.
• Place liens on a patient’s property.
• Foreclose on a patient’s property.
• Cause a patient’s arrest.
• Cause a patient to be held in jail.

Cross said St. Dominic no longer sues patients, but it appears this change will have little impact. Relatively few patients were ever sued by St. Dominic. Most were sued by debt collection agencies employed by St. Dominic, and the hospital continues to work with debt collectors.

St. Dominic’s new financial assistance policy – which went into effect July 1 – reins in the most aggressive options for its debt collectors, but still permits them to sue patients, garnish their wages, seize their bank accounts, and place liens on their property.

As a nonprofit, St. Dominic pays virtually no taxes. In return, the hospital is required to provide a significant community benefit, including charity care. Every nonprofit hospital is required to have a charity care policy, but there is no requirement on how charitable a hospital must be to qualify as a nonprofit.

Some hospitals forgive bills for patients whose household income is up to 400% of the federal poverty limit. Many are stingier. St. Dominic’s policy from 2018 to 2020 was relatively generous compared to other nonprofit hospitals in Mississippi. They were supposed to forgive any bills for people making less than 200% of the federal poverty limit and reduce the bills of people just above that line. But there appears to be a gaping hole in St. Dominic’s charity care – and the hospital is aware of it.

THE ERROR RATE
The Mississippi Center for Investigative Reporting reviewed the most recently available public tax documents filed by St. Dominic to see how much charity care the hospital was actually performing. From January 2016 to June 2020, the hospital performed $60 million worth of charity care to low-income people. Over that same time, St. Dominic estimated it performed $51 million of care for people who should have qualified for charity care – but billed them.

Rukavina calls that gap reported by St. Dominic an “error rate.” He pointed to 2018, when St. Dominic performed about $13 million of uncompensated charity care, but estimated it billed $17 million to low-income people who should have qualified for charity care – bills that often turn into lawsuits.

“That’s a high error rate,” Rukavina said of St. Dominic. “They’re missing more people than they’re helping.”

St. Dominic has reported millions of dollars in this “error rate” annually since 2011, tax records show.

Kuehnhoff said someone should have noticed the gap.

“That should really be raising red flags for the hospital and causing them to evaluate why. Why are people not accessing this charity care?” Kuehnhoff said. “This is something, I think, the hospital has to dig into.”

Fuse Brown said the gap suggests St. Dominic isn’t taking its financial assistance policy seriously.

“It does beg a larger philosophical question of whether this is a charitable organization. Because charitable hospitals do get a ton of tax breaks,” Fuse Brown said. “… If they don’t live up to that mission, they’re getting all these tax breaks without returning the benefit to the community.”

‘THEY HAVE ADVANTAGE OVER YOU’
Linda Burks was feeling tired in 2015. Then she noticed the pain in her breast.

“It took them almost a year to find it because it was so tiny,” Burks said. “I went for a routine mammogram. The girl who found it, it was her first day on the job.”

Burks, a receptionist, said she underwent an ultrasound and a biopsy. It was 2016 when Burks got a call at work. It was her doctor, and he had bad news: breast cancer.

“Of course, I fell apart,” she said.

Burks said she left work and called her husband from the interstate. She didn’t know where she was. Her husband, a pastor, told her to pull off the road, get herself together, then come home. The couple lives in a ranch-style house at the southern edge of Jackson. That night, they prayed.

“I went through it with my faith, knowing God was going to pull me through,” Burks said. “And I went through it like a champ.”

According to Burks, she had surgery in October 2016 followed by more than a month of near-daily radiation. She’s cancer-free now, but has to go in for regular screenings every year.

Burks said she had insurance through her employer, an 80/20 plan. That generally means an insurer picks up 80% of a medical bill, leaving the patient to pay 20% until they reach an out-of-pocket maximum. For Burks, that meant thousands of dollars of medical bills and a deluge of paper. At one point, Burks said she was getting bills from at least five different health care providers who had played a role in her cancer treatment – including St. Dominic. To Burks, the bills weren’t always clear and some appeared to be duplicates.
“It’s like every department that touches your body, you owe them,” Burks said. “… It almost had me crazy trying to juggle everything, to rob Peter to pay Paul.”

Burks said she set up a payment plan with St. Dominic – every month, the hospital would automatically draft $50 from her bank account. This went on for a year. Then a few months passed. Burks said she noticed St. Dominic had stopped drafting from her account.

According to Burks, when she reached out to St. Dominic, the hospital told her that her payment plan was supposed to be reevaluated each year. Burks said she asked to resume the plan, but was told it was too late – her bill had been sent to collections and it was her fault for not contacting St. Dominic earlier.

“They have an advantage over you because you have so many hospital bills,” Burks said. “There’s a lot going on when you’re dealing with cancer. You would think they wouldn’t take advantage of you like that, but they do.”

Burks said she started getting calls from a local debt collector, Smith, Rouchon, & Associates. It felt like harassment to her.

“They would call you every day if you didn’t send them any money,” Burks said, saying the debt collection firm would call her cell phone and her workplace. When she threatened to report them to the Better Business Bureau, Burks said the calls stopped.

In October 2018, the lawsuit came.

It combined two of Burks’ alleged debts – $4,431.05 owed to St. Dominic and $493.60 owed to a radiologist. The lawsuit tacked on $1,608.22 for “a reasonable attorney’s fee” to her debt, plus all court costs.

Burks wrote a letter to the court, explaining she had radiology appointments scheduled to see if her cancer had returned, but now was worried about falling deeper into debt.

“I am a receptionist with no money, living paycheck to paycheck,” the letter said. “… I want to live, and these tests play a big part in me knowing if I am staying cancer free… what do I do?”
What really irked Burks was the more than $1,600 of attorney’s fees.

“That’s more than what I bring home in a month,” she said.

Burks said she has been a full-time receptionist for nearly two decades and provided a copy of her paystub to the Mississippi Center for Investigative Reporting. The biweekly paystub showed she makes $1,375 in a regular pay period, but after taxes and other deductions, she took home less than $600 – and that included working almost nine hours of overtime.

According to her paystub, nearly half of her paycheck goes toward paying for health benefits, which Burks said also covers her husband.

The debt collector’s lawsuit against Burks appears to be in limbo. Burks said she and her husband were able to work out a payment plan.

Instead of paying $50 a month to St. Dominic, Burks said she is now paying $85 a month to Smith, Rouchon & Associates, which tacked on additional charges.

She has only recently gotten her debt back down to the amount it was at in October 2018 when Smith, Rouchon & Associates sued her. When she checked her balance in June, Burks said she still owed more than $4,100.

Burks said she undergoes some scheduled treatment at St. Dominic related to her breast cancer, but after this year Burks will be finished with that care – and with St. Dominic. She never wants to go back to St. Dominic, and it’s not because of the quality of care there.

“It’s because of the billing.”

Burks said she will have to be screened regularly for the rest of her life to make sure her cancer hasn’t returned. Burks is 59, but with thousands of dollars of medical debt to pay down, she doesn’t think about retirement. Instead, Burks said she now spends a few hours each Thursday and Friday evening, cleaning the building where she works as a receptionist for extra money.

Burks isn’t the only St. Dominic’s patient still dealing with the financial fallout of a hospital visit.

‘THE GOOD LORD’S GONNA TAKE CARE OF ME’
Patty McDaniel is now 62, still working full time and still suffering from pain caused by the 2014 car crash. Every three months, McDaniel said she goes to a doctor for pain medication. She expects she will need treatment for the rest of her life, which means more bills.

Her insurance deductible has been rising in recent years, she said, and it’s now at $6,900.

McDaniel eventually got a monetary settlement from the family of the teen driver in the 2014 crash. It was big enough to cover all her medical bills, but it came too late. The debt collector for St. Dominic had already sued her, and she had already declared bankruptcy.

The settlement got tied up in her bankruptcy proceedings. In the end, McDaniel said less than a quarter of it was left.

McDaniel doesn’t want to work more than a few more years. When asked about her retirement plan, McDaniel said it was Social Security and prayer.

“That’s it. That’s all I got. Social Security – whatever they’re going to pay me – and the Good Lord’s going to make up the difference.”

When asked if she had anything else to say about St. Dominic, the debt collectors, and her bankruptcy, McDaniel said she just wished people would have more sympathy.

“The companies, your doctors or hospitals, they should work with people. Don’t turn down what we’re trying to pay them,” McDaniel said. “… They should put their selves in other people’s shoes. What if it was you having to pay all these bills and you had someone telling you, ‘I can’t take that’? That’s just crazy.”

Alissa Zhu and Macy Weaver contributed to this report. This project was produced by the Mississippi Center for Investigative Reporting and funded in part by the Health Coverage Fellowship and the Fund for Investigative Journalism. The Mississippi Center for Investigative Reporting is a nonprofit news organization that seeks to inform, educate, and empower Mississippians in their communities through the use of investigative journalism. Sign up for our at www.mississippicir.org.