Ep. 38 Enhancing Access to Justice Through Online Dispute Resolution

Medical debt is an unwelcome burden with lasting repercussions for many Tennesseans each year. The Hamilton County General Sessions Court is at the forefront of a pilot program that began in 2021 that gives those with unpaid medical bills to Erlanger Hospital in Chattanooga the opportunity to negotiate a better outcome for themselves without ever having to enter a courtroom.

On this episode of Tennessee Court Talk, host Samantha Fisher sits down with AOC Program Manager Dana Schmidt, Erlanger Hospital Associate General Counsel, Revenue Cycle, Cherie Knotts and the judicial sponsor of this program, Judge Alex McVeagh discuss the path that the ODR program has been on since 2021 and what lies ahead for the ODR program moving forward. 

This podcast was recorded over Zoom and is intended for all audiences. 

Produced by Nick Morgan, Tennessee Administrative Office of the Courts

Transcript

00;00;00;00 - 00;00;27;25
Host
Hello and welcome to Tennessee Court Talk. I'm Samantha Fisher, Communications Director for the Administrative Office of the Courts and your host for this episode today, we're talking about a significant problem for many Tennesseans medical debt. Perhaps you are experiencing this yourself. The Sycamore Institute, a Tennessee based nonpartisan think tank, reports that Tennessee has the 10th highest rate of medical debt in the country.

00;00;27;27 - 00;00;58;24
Host
Now, many of these cases end up in General Sessions Court, where a majority of debtors default just because they didn't appear. The process generates a vicious cycle that leaves few options for patients and families who would like to address their debt, but have no means of successfully dealing with the judicial process. So what can be done? Joining me to talk about a promising pilot program developed here at the Administrative Office of the Courts is Dana Schmidt, our Programing Manager here at the AOC.

00;00;58;26 - 00;01;22;07
Host
Cherie Knotts, Associate General Counsel of the revenue cycle at Erlanger Hill, a private, nonprofit hospital in Chattanooga, which serves as the health care provider for this pilot program, and Judge Alex McVeagh. Judge McVeagh was a General Sessions Judge in Hamilton County and the judicial sponsor of this pilot project. This podcast was recorded over zoom. And Dana, I'd like to start with you.

00;01;22;08 - 00;01;29;29
Host
Tell us about launching the online dispute Resolution pilot program in coordination with the Hamilton County General Sessions Court and Erlanger Health.

00;01;30;00 - 00;01;56;28
Dana Schmidt
This really started with judge McVeagh and his colleagues in Hamilton County. General Sessions Court handles all the small claims debt collections in its, jurisdiction. And so the dockets get really, really bogged down, with these cases and a lot of these cases, you have the debt collection agency with their attorney. But on the other side, the, debtors do not have attorneys.

00;01;56;28 - 00;02;32;05
Dana Schmidt
And they represent themselves. And that in of itself causes dockets to last longer. They cause backlog because debtors are not without attorneys aren't equipped to maneuver through the legal system like attorneys are. And so it's just a lot of extra time that it takes to maneuver these cases for those without attorneys. And so judge McVeagh came to the AOC and asked us if there's something we could do, to do pre suit.

00;02;32;09 - 00;02;53;03
Dana Schmidt
He's like, is there something you can do with, you know, an online program? I know other states have online programs that deal with parking tickets and speeding tickets, but what if we could do medical debt because he's like That is what I have a lot of the cases I have that's bogging down on the docket. What if there was a way we could work these out outside of court?

00;02;53;05 - 00;03;23;23
Dana Schmidt
And so we started researching different, states. Utah was one that has a successful online program but not medical debt. And then so we were like, okay. And then it was who's which hospital can we use? This is the test pilot here. And, Erlanger stepped up for us. And so that's how it started. Just formed a steering committee of, we had the hospital with Cherie, we had Judge McVeagh, we had the AOC.

00;03;23;26 - 00;03;53;07
Dana Schmidt
My predecessor, John Jefferson, we also had the legal aid of East Tennessee. And their job was to represent the debtors, to make sure that their interests were being represented in this pilot. So when it came to drafting the documents and the legal ease, they wanted to make sure that their clientele would be able to understand it, because the goal of this is for the hospital and the debtor to work out the debt without going to court, without lawyers, and if need be, we provide free mediation.

00;03;53;10 - 00;04;05;26
Dana Schmidt
And so that's how it came to be. And that started mid, I think fall night, 2019. And so we secured funding and built the platform with a vendor. And here we are.

00;04;05;26 - 00;04;12;13
Host
Judge McVeagh as we just heard from Dana. The whole idea of this really started with you. You tell us about that.

00;04;12;13 - 00;04;37;21
Judge McVeagh
Kind of all that came to you know, was was the first kind of, iteration in our minds many years ago. Actually, I had the honor. Justice Bivins was unable to attend a Chiefs Chief Justice’s conference, dealing with innovation in the courts. And so I was asked, by the AOC to actually join, a few others, Ann Pruitt, who was the Executive Director of the Tennessee Alliance of Legal Services.

00;04;37;23 - 00;05;14;29
Judge McVeagh
The director of the AOC at the time, also the Chair of, the Alternative Dispute Resolution Commission here in Tennessee. And so there was a group of us that attended this conference in Louisville back in 2019. And really through sitting and listening to a lot of some of the great work that was happening across the country. That's that's where the idea of this, you know, pilot, came, came to be there had just been a report from the Sycamore Institute and, a nonprofit, you know, think tank out of Nashville that Tennessee was one of the worst states in the country, for medical debt per capita, I think we

00;05;14;29 - 00;05;34;28
Judge McVeagh
were 10th, you know, worst and especially not only the numbers of Tennesseans that that that have outstanding medical debt, but also in the amount of that medical debt. And so we started thinking and brainstorming of ways we could address this issue. And it just so happened that this conference, overlapped with the release of Sycamore, Institute's report.

00;05;35;01 - 00;05;59;04
Judge McVeagh
And so when we were listening to, the portion of the conference that dealt with online dispute resolution, ODR portals that were being used in traffic courts were being used in some small claims courts across the country. It got us thinking and talking. Including with the Chief Justice of the Utah Supreme Court, who was one of the presenters, and they had their own ODR pilot program.

00;05;59;04 - 00;06;24;01
Judge McVeagh
And so through, through that, through that time, we and brainstorming and discussing, we left that conference with this kind of novel idea. It ended up being quite novel. But what if we use some of this technology, not just after a lawsuit was filed or after someone got a speeding ticket or a lawsuit served? But what about a little bit more upstream before a lawsuit was filed, before the attorney's fees were added on the post?

00;06;24;01 - 00;06;43;24
Judge McVeagh
Judgment interest before all of the, negative consequences to someone's credit score and, garnishment of wages, all the things that accompany a judgment, against, someone, what have we tried to work with folks a little bit earlier? And so that's really the, the, the impetus that the, the, you know, the start of, of this now.

00;06;43;24 - 00;06;58;29
Host
That’s terrific. Judge in your own courtroom, were you seeing folks who maybe, you know, wanted to resolve their medical debt but couldn't for reasons like, you know, transportation or you just couldn't get to court? And then the thing started to snowball, and they were accumulating more debt and more court orders.

00;06;58;29 - 00;07;26;03
Judge McVeagh
Certainly. So. So again, General Sessions Court, you know, the kind of the ER of the court system, so to speak, you know, high volume small claims across the state. We actually were seeing a lot of the hospital providers in court using the justice system to collect on outstanding debts. And so, I would I would see, these sorts of cases every week, oftentimes more often than not, actually at a pretty, high percentage, the debt, it actually just doesn't show up and the judgments entered by default.

00;07;26;06 - 00;07;49;15
Judge McVeagh
And so so really, when I would see these folks in crisis, it would actually be a couple years later after a judgment where all of a sudden somebody was in my court asking for their wages, the garnishment placed on their wages to be released and asking to be able to pay this judgment, in installments. So that's allowed in general sessions court, you can file a motion to, pay a debt in installments.

00;07;49;17 - 00;08;12;14
Judge McVeagh
But some of these folks never even realized that they are didn't remember or believe they weren't properly served, but they didn't even know they had their initial court date, or they stated, well, you know, I just ignored it. I was in a cycle of debt, you know, I was getting these letters. I thought my insurance was going to cover it or, you know, surely I didn't think that, you know, $10,000 ambulance bill was going to ultimately be $10,000.

00;08;12;14 - 00;08;35;23
Judge McVeagh
I thought it would, you know, be adjusted once insurance came into play. So I just I kind of ignored those letters and I ignored the, the civil summons when it was given to me by, a process server. I just, did not realize, you know, the effects that such a, a judgment could have. And so some folks, for whatever reason and there's various theories on this, you know, don't come to court.

00;08;35;26 - 00;09;01;00
Judge McVeagh
And then others that that do come to court oftentimes, you know, certainly they can negotiate, with the other side, but oftentimes maybe that thousand dollar outstanding medical bill that your insurance didn't cover has now turned into $5,000 because attorney's fees are added on. And and you're looking at, you know, today, 10.5% post judgment, interest rate, you know, so that that is going to continue to cause that number to grow.

00;09;01;00 - 00;09;19;09
Judge McVeagh
And so I just for, for various reasons, we were we were seeing some folks in crisis and we had the Sycamore report showing, well, Tennessee's one of the worst states for medical debt. I'm seeing these folks in court. Oh, and by the way, you know, John Doe with this, medical debt issue also has a lot of other consumer debt credit cards.

00;09;19;09 - 00;09;39;15
Judge McVeagh
A lot of folks pay medical bills with credit card debt. So then you have a secondary consumer debt crisis. And then, oh, by the way, these folks end up on my detainer docket, because they can't make their rent payments. All of a sudden they're facing eviction. And oh, by the way, they might have, you know, their driver's license might get revoked or, they might end up in custody for child support issues because they're unable to pay.

00;09;39;15 - 00;09;51;29
Judge McVeagh
And so, again, just cycles in cycles of of debt, potential jail time. And obviously the devastating effects that a judgment can have on on credit reports, background checks, the ability to get, you know, to rent an apartment.

00;09;51;29 - 00;10;13;06
Host
Medical debt is not uncommon. And anybody who has tried to maneuver the health care system in America understands how confusing it can be. You know, a lack of transparency about medical costs. It can be hard to figure out your own insurance. Dana, tell me, who can you kind of paint a picture here for, you know, the average Tennessee and that this pilot program helps?

00;10;13;09 - 00;10;37;15
Dana Schmidt
Well, it's, you know, the thing with this program, it's not income based. A lot of pro bono oriented legal services are income based. The focus here is it's it's do you have medical debt? And the hospital's goal is to resolve that debt. The AOC is is to provide the service to those who can't afford an attorney. So it's not necessarily income based.

00;10;37;18 - 00;11;03;28
Dana Schmidt
But do you have medical debt? Can you not afford attorney and are you interested in this pilot. And it's it's for small amounts of debt. Is not necessarily the focus isn't resolving a $20,000 debt. It's all of the little debts, that accrue without you really thinking about it. The $25 debt, the $150 debt. So regardless if you have insurance or not, the focus is, you don't need an attorney.

00;11;04;00 - 00;11;26;09
Dana Schmidt
Do you want to participate? It's free. And are you willing to work something out with the hospital? And the good thing is, the hospital cuts out the middleman. There's no debt collection agency in the middle. When you work with the hospital on this pilot, you work with someone, employed by the hospital directly in the legal division that has the ability to resolve this case with you.

00;11;26;11 - 00;11;35;22
Host
This is a good moment to talk to the hospital. And Cherie Knotts, let's say you were with, Erlanger and recognize the problem here. Tell us what this looks like from your perspective.

00;11;35;24 - 00;12;09;17
Cherie Knotts
Hi, Samantha, and thanks to be here. And insurance companies, people may not know this. Hospitals don't see how much the patient owes. It's actually your contract with your insurance company that determines how much you pay for a hospital visit. After the, hospital receives information from the insurance company regarding the total amount owed and what amount of that is the patient's liability, or in the case of uninsured patients, after we have applied a self-pay discount and bills have gone out for at least four months, this program picks up where people still owe.

00;12;09;19 - 00;12;37;17
Cherie Knotts
So we do a review of our accounts, try to figure out who has provided us an email address. So that's an important step. And our hospital registration provider email address, because it enables us to affirmatively reach out to patients. So we accumulated list of folks who owe us money that's passed to you over 120 days. And we send out an email inviting them to join us on this platform to talk about why this account may not have been paid.

00;12;37;17 - 00;12;59;18
Cherie Knotts
And often people don't get their statements. Medical billing is sometimes a time intensive process. It can take an insurance company up to six months to process a claim, which means that the patient has gone to the hospital six months before the insurance company even processes it, which means it's month number seven before someone gets a bill. And a lot of things can happen in seven months.

00;12;59;18 - 00;13;27;16
Cherie Knotts
You can move. Some people have problems. You know, Tennessee, we do have rural areas where they don't get regular mail delivery. Or just by seven months, people are forgotten that they've gone to the doctor, so they immediately think that it's not correct. So that is where we are able to step in and talk to people, remind them of what they went to the hospital for, talk to them about who they saw, kind of jog their memory, and then we are also able to tell them at least what their insurance company told us.

00;13;27;18 - 00;13;53;17
Cherie Knotts
We have found that the the vast number of respondents in this program are actually not uninsured patients. They are insured patients. So we do talk to them about how their insurance works and how the amount that they owe was calculated based on what happened at the hospital. And then once someone registers, either me or my paralegal, Abigail, we engage directly through the online chat feature available 24 seven.

00;13;53;17 - 00;14;15;12
Cherie Knotts
We don't necessarily respond immediately, but it was created to take into account people's schedules. And if the hospital billing office is only open from 8 to 4, but you work a shift from 8 to 8, you know there's not time for you to call and talk to a person. And this provides the ability for us to communicate despite maybe conflicting schedules.

00;14;15;12 - 00;14;45;11
Cherie Knotts
And we can communicate directly. I enjoy that it's chat feature and and writing so people can always reference during the conversation what has happened before. There's also the ability to attach documents, and instances where we believe a patient either should apply for financial assistance or if the patient requests. So that creates an ability for us to sort of fast track that application and allows them to actually upload the application and supporting documentation right there in the platform.

00;14;45;13 - 00;15;14;13
Host
So, Cherie, for for folks, for families of patients who desire to sell up, you know, to pay off their debt, this seems like a much more I don't know how you'd say either. Consider more friendly or patient friendly approach, to, you know, to settling the matter, you know, without a collection agency and also just using up to date communication techniques like, like email and like, like you said, a chat feature, because people are working, they don't necessarily have time.

00;15;14;13 - 00;15;19;02
Host
By the time this ends up in court, maybe they can't get there. You can see how it snowballs.

00;15;19;04 - 00;15;45;00
Cherie Knotts
Absolutely patient centric. And that's what we try to make it to understand people where they are either financially or in understanding how their insurance works. We just try to address everything. I will say there is one thing that we don't address on the platform and is that if someone has like a care concern or something that might implicate patient safety, that's not something that we're going to mediate away.

00;15;45;03 - 00;15;55;07
Cherie Knotts
We take patient safety and quality outcomes very seriously. So if that is our concern, we automatically take that to the clinical side for a full investigation.

00;15;55;09 - 00;16;11;29
Host
That makes sense. I'm looking at some impressive numbers here from the 2023 report. 400,000 in debt resolved 71% of matters resolved, and a sizable amount of charity care provided. Dana, what is your take on these numbers?

00;16;11;29 - 00;16;43;09
Dana Schmidt
Well, one thing I point out is the $400,000 in debt that was collected, that was from August to December 2023. And what's really interesting, I'd like to point out from a court perspective, is none of that went to court. And it was Sherry and two paralegals on the hospital side that was able to collect that much debt. And what I would say, that little time, it is a very time consuming process to go through the the general debt collection process.

00;16;43;09 - 00;17;02;11
Dana Schmidt
Once you hand it off, after you've the hospitals tried to do its collections and that didn't work. And then you go to debt collection and they have steps they're required to go through before it even gets to court. So that's one of the things that really excited me was this was resolved and this money was, collected in a lot, efficient way.

00;17;02;18 - 00;17;27;09
Dana Schmidt
But also cost effective way. And it was all online and it cost the debtor nothing to participate. And then, one of the things I would point out in collecting this money of those who participated, we had a very high rate who chose mediation. And that's one of the programs that the AOC also administers is a statewide mediation program, and that was done by volunteer mediators.

00;17;27;11 - 00;17;29;06
Dana Schmidt
So I'm really proud of that as well.

00;17;29;08 - 00;17;42;29
Host
Dana, it seems like this sort of pilot program and the way you're doing things with medical debt could be expanded to other areas, certainly other parts of the state, but maybe even in other areas of free lawsuit matters.

00;17;42;29 - 00;18;10;01
Dana Schmidt
That was the goal from the get go. And the thing is, this particular pilot with collecting medical debt through the online program is the first of its kind in the country. There's no other medical debt, you know, no online program like this. But there are other online programs where the courts are already utilizing online, access like this to resolve, small cases such as, like I said, a speeding ticket, landlord tenant issues.

00;18;10;07 - 00;18;36;27
Dana Schmidt
So our goal is to expand this beyond the medical debt to other debt collection cases that the General Sessions Court addresses. So we will, you know, eventually, we'd like to add landlord tenant dispute. That's probably the second highest issue that the, Well, I know it is the general session courts have to deal with. And again, is because, you know, the tenants generally aren't represented and they don't understand the process.

00;18;37;00 - 00;19;04;18
Dana Schmidt
And so they just stay away. And again, it causes a debt to be incurred, gives the debt collector the right to go after that money and any way that the law allows. So yes, our goal will be to expand this for many different debt collection cases. And then, you know, I always see it is is to continue even further f for pro se cases in domestic relations with custody, visitation, those kinds of things.

00;19;04;21 - 00;19;14;27
Host
So Judge, what have you seen firsthand with the pilot program? Have you seen some of this spiraling of debt accumulation stop or at least be remedied in some cases?

00;19;14;29 - 00;19;35;20
Judge McVeagh
You know, the court as much as possible stays out of it. Obviously, this is a, you know, a pre suit, platform. But the debtor knows that this is something that is housed at the court. Literally when they are, they're sent to a website and my face is on a video saying you've not been sued, but you might be.

00;19;35;27 - 00;19;54;21
Judge McVeagh
And this is a program that we have, that we have helped to develop. It's voluntary. If you want to attempt to, to use this program, then, you know, understand that it's been vetted and that it's housed, at the court. And if you're unsuccessful, obviously you may end up in court and you have your day in court as as well.

00;19;54;21 - 00;20;02;00
Judge McVeagh
So it's one of these special partnerships, between a lot of different folks, and the courts and, and we're we're quite proud of it.

00;20;02;01 - 00;20;12;04
Host
Shari, do you see or have you found the Erlanger has already become, you know, kind of a go to a hospital for other, you know, health systems who might be interested in doing things this way.

00;20;12;04 - 00;20;36;20
Cherie Knotts
I will say that when we do have a health system that is interested, they do reach out to me directly, because Erlanger has invested a lot of manpower in supporting this. The pilot program, when we have it running, we upload about 100 cases per upload. If so, and we try to work through 100 of those a week. So that has not oh, occasionally there's someone to respond to.

00;20;36;20 - 00;21;03;13
Cherie Knotts
That is basically what my staff does on days that we are focused on ODR, there has to be a discussion of how do you manage this from an administrative standpoint? Because you do need to have people who can be responsive to patients, who know how to look through the medical record and the billing record to see what happened, to address those questions, and also have authority to know what the hospital can do to help people in a variety of circumstances.

00;21;03;16 - 00;21;09;26
Cherie Knotts
Most hospitals would not have the structure just out of the blue to take something like this on.

00;21;09;29 - 00;21;19;12
Host
Certainly a a promising solution to a problem that, you know, many, many people experience not only here in Tennessee but across the country. Any parting thoughts?

00;21;19;12 - 00;21;45;06
Dana Schmidt
We are focused on Middle Tennessee, and we are working to add a second hospital to the pilot. And then, we are also in West Tennessee and I am working with some attorneys and mediators on the ground there to start reaching out to, a couple of hospitals in, West Tennessee and, it's growing. And our goal is within the next couple of years, we'd like to have this statewide.

00;21;45;06 - 00;22;26;26
Cherie Knotts
Erlanger has thrilled with the results of this pilot. In actuality, most of these accounts have been open for over a year, at which point the patient was not in communications with Erlanger, either about payment options or about any financial circumstance that they might be addressing. So this program and probably its unique technology really encouraged engagement. And we found that once people engaged with us, on average, not only did they resolve the account that we invited them on, but they resolved an additional $0.70 per dollar of other outstanding accounts because they would say, well, what else do I have out there I've forgotten or didn't know about or didn't understand this one account.

00;22;26;28 - 00;22;42;12
Cherie Knotts
I know that I've been to Erlanger more than once over a year. In fact, I live in Chattanooga, so it's my go to hospital. Like, let's talk about all of my accounts. So we are very, excited and encouraged about the ability to engage with our patients directly.

00;22;42;14 - 00;23;01;25
Judge McVeagh
This this program has a lot of potential, for, for every sort of case that may come through General Sessions Court, potentially other court, Circuit Courts, Chancery Courts, I think it has, potential to, to, to be scaled. And I'm just so thankful that the Supreme Court and in both of the commissions, have have been such a key, a key sponsor.

00;23;01;25 - 00;23;21;29
Host
Well, Dana, thank you. Cherie, thank you for joining us. Judge McVeagh. We really appreciate your time. And we thank you for listening to Tennessee Court Talk. For more information on Tennessee courts you can go to TNcourts.gov.