Medical debt is an unwelcome burden with lasting repercussions for millions of Americans each year.
Thankfully, the Hamilton County General Sessions Court is at the forefront of a new program that gives those with unpaid medical bills the opportunity to negotiate a better outcome for themselves without having to enter a courtroom.
The process is called online dispute resolution, and it’s easy and intuitive to use.
Eligible parties with debts owed to Erlanger Baroness Hospital can register on the TN Med Debt site and send a message to Erlanger concerning their debt before a lawsuit is ever filed.
A representative from Erlanger will then message them back, beginning a conversation where things like payment plans or adjusted pricing can be worked out.
The conversation is asynchronous, meaning parties can leave messages at any time of night or day, even while using a smartphone or tablet, at their own convenience.
Crucially, those owing money can request the assistance of a Rule 31-trained mediator for help in reaching a settlement.
The mediators do not take a side in the negotiation, but rather work to come up with potential solutions that satisfy both parties.
The hope is that a settlement can be reached that will put those in debt on a path to a more secure financial future, while causing the least amount of disruption to their lives.
“This program is designed to give you and the health care provider an opportunity to discuss, negotiate and possibly agree on a deal to resolve a medical bill,” Hamilton County General Sessions Judge Alex McVeagh says. “Best of all, it’s free, voluntary and confidential.”
While medical debt is a problem nationwide, the problem looms especially large in Tennessee. According to the Sycamore Institute, Tennessee has the 10th highest rate of medical debt in the country.
Ninety-three out of 95 counties in the state have medical debt in excess of the national average, and one of four Tennesseans report that medical debt has adversely affected their credit history.
The TN Med Debt program offers these people a new source of hope.
“Tennessee families have faced many challenges this year, from COVID-19 to the economy and their own pocketbooks,” Administrative Office of the Courts director Deborah Taylor Tate says.
“By providing an opportunity to resolve debt easily before it causes even more stress or additional legal issues, this program will be a real solution for families in the Chattanooga area.”
There is an urgent need to address this issue because, as longtime mediator Larry Bridgesmith explains, outstanding medical debts can have long lasting, detrimental impacts on someone’s financial stability.
Many of those who fall into debt find themselves trapped in an increasingly dire sequence of events. First, they might have a complaint filed against them in court for nonpayment of a debt, which hurts their credit rating. Next, they might default on that debt, which can be followed by a garnishment or a lien.
It can be difficult, if not impossible, for many to recover financially, Bridgesmith says.
McVeagh describes some of the many damaging ramifications medical debt has had on people he’s observed in Hamilton County General Sessions Court.
“I have seen garnishments of wages, evictions, credit card debt suits, credit bureau disputes and even criminal cases flowing from underlying medical and other consumer debt – all negatively affecting creditors, debtors and a clogged court system.”
Indeed, the problem is a big one in Hamilton County General Sessions Court. McVeagh says there were around 15,000 civil cases filed in the court in 2019 alone, many of them centered on medical or other consumer debt.
That large volume is partially due to the fact that the General Sessions Court handles civil cases for up to $25,000, which Judge McVeagh points out is “the highest ‘small claims’ jurisdictional limit in the country.”
These issues were in McVeagh’s mind back in 2019 when he helped represent Tennessee at the National Conference of State Courts Innovation Summit in Louisville, Kentucky alongside Tate, Bridgesmith and Ann Pruitt, executive director of Tennessee Alliance for Legal Services.
There, the idea for an ODR program in Tennessee crystallized, with McVeagh realizing Hamilton County would be a perfect location to launch the pilot.
Planning got underway in the following months, and the Administrative Office of the Courts wrote an application in June for a technical assistance grant from the State Justice Institute to fund the ODR pilot.
A $50,000 grant was awarded in August. The Tennessee Supreme Court Access to Justice Commission, which is sponsoring the pilot project along with the Alternative Dispute Resolution Commission, provided supplementary funding for the pilot.
While ODR technology has been utilized by other states, Hamilton County’s program is unique in a couple of ways.
First, it stands out due to its exclusive focus on medical claims. Other ODR programs focus on traffic court cases, small claims or family disputes, but this is the first one to direct all of its attention to the pervasive problem of medical debt.
Secondly, other programs are not committed to finding solutions before anything has been filed in court. By addressing the problem at this stage, those in debt can avoid damage to their credit rating.
While the ODR program was designed to benefit economically struggling Tennesseans, Erlanger has embraced it in an effort to help patients who might otherwise default on their debts find a way to efficiently resolve their financial problems.
“Through this program, Erlanger can work directly with patients regarding their billing concerns so outstanding medical debt can be resolved without involving collection agencies, credit reporting, lawsuits, or additional stress,” Christopher Spady, vice president of revenue cycle at Erlanger Health System, says.
“This eliminates the expense and hassle of going to court.”
Legal Aid of East Tennessee, an organization that often assists those who find themselves in medical debt, also welcomes the program.
Qualifying parties can request Legal Aid’s support during the ODR process if they have any legal questions or would like guidance on how to proceed in negotiating their debt.
“If you’re receiving letters and phone calls about a medical debt, it’s important that you develop a response before you potentially face negative entries on your credit report and a lawsuit,” attorney Shahen Salili of LAET says.
Court Innovations Incorporated was chosen to design the platform on which the ODR system operates.
Legal Aid attorneys helped craft the language that guides parties through the process, which has made the ODR program ideally suited for use by the average person.
The hope is that the Hamilton County ODR pilot will be successful enough that other counties in Tennessee can then implement similar programs, expanding the pilot program’s mission “to make access to justice and judicial engagement less costly, less time consuming and more satisfying to the citizens of the state.”
For questions about the TN Med Debt Pilot Program, contact the Tennessee Dispute Resolution Office at ODR@tncourts.gov.
Source: Supreme Court of Tennessee