Minnesota AG Settles With Hospital Over ‘Unfair’ Bill Collection Practices

The Attorney General of Minnesota has announced a settlement with Hutchison Hospital after it was accused of violating a regulatory agreement between the AG’s office and non-profit hospitals in the state by increasing patients’ payment plans, deactivating payment plans of patients who did not agree to new terms, and pressuring patients to take out loans or use retirement savings to pay off their medical debts.

Under the terms of the settlement, the hospital must offer the affected patients the lowest possible monthly payment to which they are entitled, and prohibit the hospital from deactivating payment plans in the future. As well, the hospital is not allowed to create new payment plan policies that increase the monthly payments of existing patients and from threatening patients with collections if bills are not paid. If it violates the terms of the settlement, the hospital will have to pay a $25,000 fine.

Under its original policy, balances of less than $1,000 had to be repaid within a year and those over $1,000 had to be repaid within two years. Patients were allowed to pay as little as $50 a month. The new plan — announced last November — gave patients six months to repay debts under $1,000, 12 months if the debt was between $1,001 and $3,000, 24 months if the debt was between $3,001 and $10,000, and 36 months if the debt exceeded $10,000. As well, the $50 floor for monthly payments was removed.

“High-quality, affordable healthcare is essential for people to be able to afford their lives and live with dignity and respect,” said Keith Ellison, the Attorney General of Minnesota, in a statement.  “I expect that Minnesota’s nonprofit hospitals will conduct their billing practices in accordance with the law, their charitable mission, and their agreement with this office. I appreciate that Hutchinson remedied its actions through this settlement. It reflects my expectation that Minnesota hospitals honor their end of the bargain when collecting medical debt from Minnesotans.” 

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