Allina Health Ends Medical Billing Practice Based on Past-Due Debt

Nonprofit health system Allina Healthcare will end its medical billing practice of denying non-emergency care to patients with medical debt, the New York Times reported.

The policy change comes shortly after Minnesota Attorney General Keith Ellison announced that his office was investigating the health system’s billing practices.

On June 1, 2023, the New York Times shared that Allina had stopped providing non-emergency medical care to patients with $4,500 or more in outstanding medical debt. According to the report, Allina had been enforcing the Termination of Care Policy upon patients with chronic conditions and children who relied on continuous care to manage their health.

While the health system’s hospitals treated patients in emergency rooms, patients with debt were allegedly denied other services until they paid off their debt in full. Some patients experiencing these care disruptions were Medicaid beneficiaries.

A 12-page document instructed the health system’s staff to cancel appointments for patients whose debt exceeded $4,500. The guidelines explained how providers could lock patients’ EHRs so staff could not schedule future appointments.

The health system announced on June 9 that it would pause the policy.

“I continue to be concerned about reports of Allina denying needed non-emergency medical care solely on the basis of medical debt,” Attorney General Ellison said in a press release. “Allina is bound under the Hospital Agreement to refrain from oppressive billing practices and provide charity care when patients need and qualify for it, as all Minnesota hospitals are.”

The Hospital Agreement covers all 128 nonprofit hospitals in Minnesota and was renewed in July 2022 for five years. It protects patients from abusive, harassing, and deceptive practices when hospitals seek to collect medical debt.

“Denying patients needed care on the basis of medical debt harms every Minnesotan, whether or not they are Allina patients. My office has heard from a good number of Allina patients who have shared their own upsetting stories of being denied care for this reason,” he continued.

Conny Bergerson, a spokesperson for Allina, said the health system had re-examined the policy and decided there were “opportunities to engage our clinical teams and technology differently to provide financial assistance resources for patients who need this support,” according to a statement obtained by the New York Times.

Nonprofit hospitals are exempt from paying federal, state, and local property taxes and, in return, must invest their profits in charity care and community benefits. However, research has found that these facilities often spend less on charity care than they receive in tax breaks.

Allina Health, which owns 13 hospitals and more than 90 clinics in Minnesota and Wisconsin, avoided around $266 million in taxes in 2020, the Lown Institute found. But the health system spent less than half of 1 percent of its expenses on charity care that year.

When run correctly, nonprofit hospitals can help low-income patients access needed healthcare services and avoid medical debt. Over one in seven nonelderly adults have past-due medical debt, an Urban Institute report found.

Attorney General Ellison’s investigation of Allina is part of a larger strategy to assess other Minnesota nonprofit health systems’ billing practices.