The Minnesota Attorney General’s office announced on Friday that it has reached an agreement with Mayo Clinic concerning its charity care and debt collection practices. The settlement follows an investigation into the health system’s billing practices and its adherence to state regulations for nonprofit hospitals.
The investigation, which began in December 2022, was prompted by allegations that Mayo Clinic had sued patients who may have qualified for charity care to recover unpaid medical debt.
The background: The AG’s office found several issues with Mayo Clinic’s practices that ran counter to its charitable mission and obligations under the Minnesota Hospital Agreement, which mandates that nonprofit hospitals treat patients fairly and avoid abusive or deceptive debt collection methods. Among the findings were:
- Steering Patients Away from Charity Care: The investigation revealed that Mayo Clinic’s staff had been instructed to avoid informing patients about available charity care, especially when patients could not immediately pay their medical bills. In some instances, patients were encouraged to seek loans or borrow from family members instead of being given information about financial assistance programs.
- Burdensome Charity Care Application: The charity care application process was found to be cumbersome, deterring many eligible patients from applying for assistance. In some cases, Mayo Clinic did not follow up on incomplete applications, leaving eligible patients without the support they needed.
- Aggressive Debt Collection Practices: Mayo Clinic was also criticized for its aggressive debt collection tactics, including suing patients who may have qualified for charity care. The Attorney General’s office found that Mayo Clinic filed lawsuits against patients even after they were informed about the charity care options, in violation of its own charitable mission.
- Delayed or Denied Medical Care: The investigation found that Mayo Clinic sometimes delayed or denied medical care to patients with outstanding medical debt, further exacerbating the financial and health challenges they faced.
Moving forward: The settlement mandates that Mayo Clinic adopt several reforms aimed at improving its charity care and debt collection practices. These include:
- Presumptive Eligibility for Charity Care: Mayo Clinic must screen certain patients for charity care eligibility without requiring them to complete the full application process. This presumption is based on factors like household size and income, making it easier for eligible patients to access financial assistance.
- Streamlined Charity Care Application: For patients who are not presumptively eligible, Mayo Clinic must implement a simplified charity care application. This includes a follow-up process with financial counselors to assist patients in completing their applications, ensuring that no eligible patient is left without assistance.
- Restrictions on Lawsuits: The settlement prohibits Mayo Clinic from suing patients to collect medical debt, except in extraordinary circumstances. Any lawsuit must be approved by Mayo Clinic’s Chief Financial Officer before being filed.
- Enhanced Charity Care Policies: Mayo Clinic is required to provide 100% charity care for patients with incomes up to 200% of the federal poverty level, and a partial discount (40-50%) for those with incomes up to 400% of the federal poverty level.
New report: Beyond the settlement, Attorney General Keith Ellison also released a report calling for legislative changes to improve charity care accessibility in Minnesota. The report recommends expanding presumptive eligibility for charity care to all patients, creating a baseline income level for charity care eligibility, and simplifying the application process to reduce barriers for eligible patients.
Read the settlement. Read the report
