In a significant policy change, Allina Health, a prominent nonprofit health system in Minnesota, has announced that it will no longer deny medical care to patients with outstanding bills of $4,500 or more. Previously, Allina’s hospitals would treat patients in emergency rooms but would cut off other services for those with debt, including children and individuals with chronic illnesses.
The decision to end this practice comes in response to an investigation by Keith Ellison, the attorney general of Minnesota, who was looking into Allina’s withholding of care from indebted patients. This investigation is part of a broader examination of how the state’s nonprofit hospitals bill patients for medical care. Mr. Ellison has noted that there is a growing consensus that there is little difference in behavior between for-profit and nonprofit hospitals.
Nonprofit hospitals like Allina receive substantial tax breaks in exchange for providing care to the most vulnerable and underserved individuals in their communities. However, an investigation by The New York Times revealed that many nonprofits have shifted away from their charitable missions, resulting in detrimental consequences for patients.
Allina Health, which owns 13 hospitals and over 90 clinics in Minnesota and Wisconsin, benefits from its nonprofit status by avoiding approximately $266 million in taxes. To qualify for these tax breaks, nonprofit hospitals like Allina are required by the Internal Revenue Service (IRS) to offer free or reduced-cost care to patients with low incomes. However, there are no specific guidelines regarding the income threshold for eligibility.
In 2020, Allina spent less than 0.5% of its expenses on charity care, well below the national average of around 2% for nonprofit hospitals. This disparity was highlighted in an analysis by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health. Mr. Ellison emphasized the need for the industry to inform individuals about their potential eligibility for charity care, as many are unaware of this option.
The issue of medical debt extends beyond Allina, with an estimated 100 million Americans struggling to pay their medical bills. These debts account for roughly half of all outstanding consumer debt in the country. Hospitals have increasingly adopted aggressive tactics to collect debts, such as inundating local courts with lawsuits or seizing patients’ wages and tax refunds.
However, Allina’s policy went a step further by canceling appointments and locking electronic health records for patients with $4,500 or more in debt. Some of the affected patients were eligible for Medicaid, the federal-state insurance program for low-income individuals. Allina employees testified that the policy forced them to ration care, even for children. Initially, Allina defended the policy, claiming that they had followed a protocol of contacting patients multiple times and providing information on financial assistance.
Nevertheless, following a reassessment, Allina Health has decided to restructure its policy to offer better financial assistance resources to patients in need, thanks to the input of its clinical teams and advancements in technology. However, doctors within the system are advocating for further changes. Primary care physicians at Allina recently launched a historic effort to form a union. If successful, it would become the largest union of clinicians in the nation. Additionally, some doctors are pushing for legislative changes to prevent the refusal of medical care based on outstanding bills, particularly for children.
In conclusion, Allina Health’s decision to end the denial of medical care to patients with significant outstanding bills marks a significant change in policy. This move comes in response to an investigation by the attorney general of Minnesota and highlights the ongoing issue of nonprofit hospitals deviating from their charitable missions. The larger problem of medical debt in America requires attention, as millions struggle to pay their bills, and hospitals employ aggressive tactics to collect debts. The Allina case underscores the urgent need for substantial reform in the healthcare system to ensure that vulnerable individuals, particularly children, do not suffer the consequences of unmanageable medical debts.
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