UPDATE: Aug. 23, 2023: Allina Health will "formally transition away” from its policy of interrupting non-emergency, outpatient clinic care for patients with significant debt, a company spokesperson told Healthcare Dive. The announcement will not affect the investigation from the Minnesota AG, according to AG Ellison.
Dive Brief:
- The Minnesota attorney general announced an expanded investigation into Minneapolis-based Allina Health on Friday, following a June investigation from the New York Times that found the nonprofit health system restricted non-emergency care to patients with certain amounts of medical debt.
- Allina restricted care if patients accrued at least $1,500 in debt during three separate instances of care, according to the report. Allina CEO Lisa Shannon announced in June, after the investigation published, that the operator had paused the policy.
- AG Keith Ellison has previously scrutinized aggressive hospital billing and collection practices in Minnesota, including an investigation into the Mayo Clinic over allegations that the system sued patients with outstanding medical bills who ought to have qualified for charity care.
Dive Insight:
All nonprofit Minnesota hospitals’ billing and collection practices are governed by the Hospital Agreement, a voluntary agreement negotiated between hospitals and the AG. The agreement was first signed in 2005 and is renegotiated every five years.
Under the agreement, which was last updated in 2022, hospitals must provide charity care for low-income qualifying patients, with the agreement agreement stating a “zero tolerance policy” for abusive practices when recouping medical debt.
Ellison’s investigation will target whether Allina’s policy violated the state’s Hospital Agreement. Under Allina’s debt policy, patients with high levels of debt had services restricted, and some were prevented from returning until their debt was paid in full, according to the New York Times.
“The high cost of healthcare in Minnesota and across the country makes it tough enough to afford your life. Medical billing practices that are aggressive, abusive or deceptive also make it hard to live with the dignity, safety and respect that everyone is entitled to,” Ellison said in a Friday news release.
An Allina spokesperson told Healthcare Dive it was engaging with the AG’s office about its compliance with the Minnesota Hospital Agreement and the support the health system offers patients with financial needs.
The health system runs more than 100 hospitals and clinics in Minnesota and Wisconsin and brought in over $4.5 million in revenue last year. In 2020, it spent less than half of 1% of expenses on providing charity care, according to an analysis from the Johns Hopkins Bloomberg School of Public Health.
Nonprofit hospitals have fallen under scrutiny over charity care spending and billing tactics.
In 2022, the New York Times reported that Providence, one of the nation’s largest health systems, pressured low income patients into paying medical bills even when they ought to have qualified for financial assistance.
In North Carolina, hospitals sued thousands of patients to generate $57 million in judgments between 2017 and 2022, in some cases suing spouses after their partners had died. As of 2022, KFF Health News found that most hospitals across the U.S. had policies permitting legal action against in-debt patients, and one in five hospitals would deny non-emergency care should patients reach a certain threshold of debt.
