Allina Health, a large nonprofit health system based in Minnesota, announced Wednesday that it will end its policy of denying medical care to patients with $4,500 or more in outstanding bills.
Although Allina’s hospitals treat anyone in emergency rooms, other services have been cut for patients with debt, including children and those with chronic illnesses such as diabetes and depression, The New York reported. Times in June. Patients were not allowed to return until they had paid their debt in full.
Allina released its policy change less than a week after Keith Ellison, Minnesota’s attorney general, announced that his office was investigating Allina’s practice of withholding care from patients with debt. The investigation is part of a broader look into how the state’s hospitals, which are all nonprofits, bill patients for medical care.
“There is a growing consensus that there is very little difference between a for-profit and a nonprofit hospital when it comes to behavior,” Mr. Ellison said in an interview.
Nonprofit hospitals like Allina get huge tax breaks in exchange for providing care to the poorest, most vulnerable people in their communities. But an investigation by The Times last year found that over the past several decades, many nonprofits have largely abandoned their charitable missions, with devastating consequences for patients.
Allina Health owns 13 hospitals and more than 90 clinics in Minnesota and Wisconsin. Its nonprofit status allowed Allina to avoid about $266 million in state, local and federal taxes in 2020, according to the Lown Institute, a think tank that studies health care.
In exchange for those lucrative tax breaks, the Internal Revenue Service requires Allina and its nonprofit peers to provide services to their communities, in part by offering free or low-cost care to patients who have a low income.
But federal rules are silent on how poor patients must qualify for free care. In 2020, Allina spent less than half of 1 percent of its costs on charity care, which was below the national average of about 2 percent for nonprofit hospitals, according to a analysis of hospital financial filings by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health.
“The industry needs to tell people they may be eligible for charity care,” Mr Ellison said. “People never seem to be told that.”
Even 100 million Americans struggle with medical debts. Their bills account for nearly half of all outstanding consumer debt in the country.
Hospitals have increasingly used a range of aggressive tactics to collect debt from patients. Some local courts are flooded with lawsuits to squeeze payments from patients. Others garnish the wages of patients or cover their tax refunds.
But Allina’s policy moved things forward.
A 12-page document instructed health system staff how to cancel appointments for patients with total debt of $4,500 or more. The policy instructed providers how to lock patients’ electronic health records so that staff members could not schedule future appointments.
Some of the discharged patients had low enough incomes to qualify for Medicaid, the federal-state insurance program for poor people.
Allina employees said the policy forced them to ration care, even for children.
The health system initially defended the policy when contacted by The Times in May, noting that it cut patients only after contacting them by phone and after sending repeated letters with including information about applying for financial aid.
But Conny Bergerson, a spokesman for Allina, said in a statement this week that the health system re-examined the policy this summer, and decided there were “opportunities to engage our clinical teams and technology otherwise to provide sources of financial assistance for patients who need this support.”
Allina’s doctors continued to press for further changes. Earlier this month, primary care doctors started the system an effort to form a union. If successful, it would be the largest clinicians union in the country. Some doctors are pushing for legislative changes that would restrict or prohibit the practice of withholding care from patients with outstanding bills.
“The state of Minnesota should ban denying medical care to children based on medical debt,” said Jennifer Mehmel, a pediatrician who recently retired from her position in Allina. “Children are obviously the innocent victims here, yet they bear the brunt of the problem.”