Allina cancels controversial policy that denied care to those with debts

Allina Health will no longer block patients with delinquent medical debts from making nonemergency appointments.

The controversial practice had been put on hold this summer, but the Minneapolis-based health system announced Wednesday that it would pursue other strategies to help patients resolve overdue bills.

"We have determined there are opportunities to engage our clinical teams and technology differently to provide financial assistance resources for patients who need this support," the health system said in a written statement.

Allina had initially defended the practice as a last resort to motivate patients to apply for financial assistance or pay bills — after repeated mailings and phone calls. The policy was triggered if patients owed at least $4,500 from three separate medical encounters.

The health system isn't alone in using the practice in Minnesota, where a special agreement between hospitals and the state attorney general restricts how they can collect debts. HealthPartners and Mayo Clinic have also required patients in rare cases to pay overdue bills before scheduling non-emergency care.

Glencoe Regional Health was prepared to deny nonemergency care to a delinquent patient after she give birth, but a Star Tribune report on her plight prompted people to make donations that more than covered her medical debts.

Allina became nationally known for the practice after a report in the New York Times, which prompted Attorney General Keith Ellison to launch an investigation over whether it violated the state hospital agreement. Ellison also is seeking to gain a broader understanding of the pressures patients face when they can't pay their bills, and scheduled a listening session Wednesday night to hear from them.

"This announcement does not change our desire to hear from the public on this issue, and it does not change the scope of our investigation, which focuses both on Allina's past conduct and future practices," Ellison said in a statement.

Dr. Elizabeth Koffel, a Richfield internist, read a statement at the forum from an uninsured woman whose husband was denied timely exams because of billing issues. He ended up in urgent care in pain and learned he had a later-stage form of pancreatic cancer, she said.

"We see this a lot — all the time," said Koffel, noting that the family wanted to remain anonymous.

The controversy came at a dicey time for Allina, which like many large Minnesota health systems has posted revenue declines since the COVID-19 pandemic. It also has been contesting a vote earlier this year by inpatient doctors at Mercy Hospital in Coon Rapids to unionize, and faces a similar vote by more than 500 of its outpatient clinicians across Minnesota.

The health system will also need state political support next year to build a new 100-bed inpatient rehabilitation hospital, with plans to open it by 2026.

The comparative severity of the medical debt problem in Minnesota is unclear. The Urban Institute used data from a credit agency to estimate that 2% of Minnesota adults have medical debts in collections, compared to 13% nationwide.

Minnesota has a lower poverty and higher insured rate, which likely explains some of the discrepancy. But under their special agreement with the attorney general, Minnesota hospitals also are prevented from reporting debts to credit agencies.

So the state's low reported rate reflects mostly overdue bills for outpatient care, and doesn't show the full scope of the problem.

Allina in its statement did not specify its new strategies for connecting patients with financial assistance and resolving debts, but cases involving inpatient care will be bound by the state hospital agreement. It requires that hospitals charge discounted rates to uninsured patients, and refrain from abusive or coercive collection practices.