Allina Health System announced last Friday it was placing controversial billing practices on hold as it reevaluates its approach.
The announcement comes less than two weeks after the nonprofit health system was alleged to cut off patients with medical debt, according to a New York Times investigation. Allina reportedly had an explicit policy to cancel outpatient appointments for patients with at least $4,500 in unpaid medical debt. In response, Allina told the New York Times patients are notified repeatedly of their medical debt, along with details on how to apply for financial assistance, before they surpass the threshold.
Allina said it will “take a thoughtful pause on any new interruptions to non-emergent, outpatient clinic scheduling while we re-examine our policy,” the health system said in a statement posted to its website. It will study ways to educate its teams on the “extensive financial services available to patients” and engage community partners in “important dialogue about reducing barriers to care and the collective role we all play in that process.”
Nonprofits like Allina, which runs more than 100 hospitals and clinics in the Midwest and rakes in $4 billion in revenue annually, get tax breaks in exchange for providing care to the poor. In 2020, the health system avoided $266 million in taxes thanks to its nonprofit status, according to the Times reporting, citing data from the Lown Institute, a think tank that studies health care. The health system spent less than half of 1% of its expenses on charity care, whereas the national average is about 2%, according to an analysis of hospital financial filings published in Health Affairs.
Many hospitals are underpaying their due in charity care, and several pursue aggressive practices like garnishing patients' wages or seizing their tax refunds to clear debts as low as $25.
State Rep. Liz Reyer, D-Florida, who helped pass legislation this session related to medical debt, told MPR News the decision is “clearly a positive step.” “It solves that immediate problem which can have such serious health implications,” she said.
State Attorney General Keith Ellison told the outlet that he was closely reviewing the NYT investigation and anyone with knowledge of the practices should contact his office so they can determine whether any federal or state laws have been broken.
“In the last week, 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 told MPR News. A statewide agreement with nonprofit hospitals called the Hospital Agreement is aimed at protecting patients from abusive, harassing and deceptive debt collection practices.
“My reaction on whether it's good faith or not really depends on what happens next,” Reyer told MPR News. “Do they unpause it as soon as the lights aren't quite so bright?” Reyer said. “It's really too soon to say, or I'm not close enough to say what the motivation is and what the long-term outcome would be.”