Allina agrees to pay $1.1 M penalty over patient debt interest

Allina Hospitals and Clinics has agreed to pay $1.1 million to settle charges from the state of Minnesota's AG that it had violated state usury laws by charging interest rates as high as 18 percent on unpaid patient balances.

Allina, which didn't admit to wrongdoing in the state settlement, certainly piled on the interest with a vengeance, if the state's allegations are true. Its subsidiary, MedCredit Financial Services, charged some patients interest rates of 18 percent on balances up to $4,999, and 12 percent on balances between $5,000 and $9,999, in exchange for their accounts not being sent to collections.

The hospital system, which owns 11 facilities and manages a 12th, argues that interest rates charged were legal since they were "open-ended credit," but obviously the state didn't buy this.

The settlement money will go to patients as refunds for rates that went over the 8 percent maximum set as a limit by state law. A significant number of patients will get less than $10.

To learn more about the settlement:
- read this Modern Healthcare article

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