Minnesota Attorney General Keith Ellison has reached a settlement requiring Stevens Community Medical Center to provide as much as $1.4 million in refunds or medical-debt reductions to uninsured patients the hospital allegedly overbilled, the office announced last week.
The agreement, filed as an Assurance of Discontinuance, resolves allegations that the hospital miscalculated a discount it was required to extend to uninsured patients with household incomes under $125,000. The office alleges some patients were billed as much as 20.5% more than state law permits. SCMC neither admitted nor denied the allegations. SCMC discovered the miscalculation around May 2026 and cooperated with the inquiry.
The dispute centers on how the discount was calculated. Under a regulatory agreement between Ellison’s office and Minnesota hospitals, providers were required to charge qualifying uninsured patients no more than they charged their “most favored insurer.” Effective November 1, 2023, a new law replaced that standard, requiring hospitals to give eligible uninsured patients the highest discount they extend to any private insurer.
SCMC used the most-favored-insurer method, but identified the wrong insurer, providing discounts of 22% to 25% when rates of roughly 41% to 45% should have applied. The hospital also continued using the superseded methodology after the 2023 statute took effect, when discounts of 38% to 42.5% were required. The office identified 2,001 patients potentially owed additional discounts of 19.5% to 20.5% for the earlier period and 1,477 patients potentially owed 13% to 17.5% for the later period.
The settlement requires SCMC to finalize a remediation process, notify affected patients, verify patient income, and report its progress to the office. Refunds and debt reductions remain subject to income verification, meaning the $1.4 million figure represents a ceiling rather than a fixed payout.
Ellison’s office has pursued similar enforcement under the Hospital Agreement. It reached a settlement with Mayo Clinic in May 2025 over charity-care and debt-collection practices, and in October 2020 Hutchinson Hospital forgave $184,000 in patient debt to resolve payment-plan allegations. The office first reached the Hospital Agreement with Minnesota hospitals in 2005. The current version covers the state’s nonprofit hospitals and two for-profit systems and expires in 2027.
Read the Assurance of Discontinuance
