Allina Health Care System in Minnesota is cutting off patients with medical debt

Many hospitals in the United States employ aggressive tactics to collect medical debt. They flood the local courts with debt collection lawsuits. They garnish the patients’ wages. They garnish their tax refunds.

But a wealthy, not-for-profit health care system in the Midwest goes a step further: It denies care to patients with unpaid medical bills.

Allina Health System, which operates more than 100 hospitals and clinics in Minnesota and Wisconsin and generates annual sales of $4 billion, sometimes turns away patients who are heavily in debt, according to internal documents and interviews with doctors, nurses and patients.

Although Allina’s hospitals treat everyone in the emergency room, other services for indebted patients, including children and those with chronic illnesses such as diabetes and depression, may be suspended. Patients are not allowed to repay their debts until they have paid off their debts in full.

Nonprofit hospitals like Allina receive huge tax breaks in return for caring for the poorest people in their communities. But an investigation by the New York Times last year found that nonprofit organizations have failed to meet their charitable responsibilities for the past several decades without facing consequences.

Allina has an explicit policy of excluding patients who owe money for services they received at the health system’s 90 clinics. A 12-page document reviewed by The Times instructs Allina’s staff on how to cancel appointments for patients with at least $4,500 in unpaid debts. The policy explains how electronic health records will be blocked to prevent employees from making future appointments.

“These are the poorest patients who have the most serious medical problems,” said Matt Hoffman, an Allina primary care physician in Vadnais Heights, Minnesota. “These are the patients who need our care the most.”

Allina Health said it has a robust financial assistance program that helps over 12,000 of its 1.9 million patients with medical bills in an average year. The hospital system only bans patients if they have accumulated at least $1,500 in unpaid debt three times. It is contacting them by phone and with repeated letters containing information on how to apply for financial help, said Conny Bergerson, a spokeswoman for the hospital.

“Allina Health’s goal is and remains zero patient loss for financial reasons,” said Ms. Bergerson. She said the disruption of services was “rare” but declined to give any information on how often it happens.

Allina suspended its patient exclusion policy in March 2020, at the start of the coronavirus pandemic, before reinstating it in April 2021.

An estimated 100 million Americans have medical debt. Their bills account for about half of all outstanding debt in the country.

About 20 percent of hospitals across the country have collections policies in place that allow them to cancel treatments, according to a survey by KFF Health News last year. Many of these are non-profit organizations. The government does not track how often hospitals refuse treatment.

Under federal law, hospitals are required to treat anyone who comes to the emergency room, regardless of their ability to pay. But the law — called the Emergency Medical Treatment and Labor Act — is silent on how health systems should treat patients who need other types of life-saving care, such as those with aggressive cancer or diabetes.

According to the Lown Institute, a think tank dedicated to healthcare, Allina’s nonprofit status helped her avoid about $266 million in state, local, and federal taxes in 2020.

In return, the Internal Revenue Service requires Allina and thousands of other nonprofit hospital systems to help their local communities, including by providing free or discounted care to low-income patients.

However, federal regulations do not dictate how poor a patient must be to be eligible for free care. In 2020, Allina spent less than half of 1 percent of its spending on charity, well below the national average of about 2 percent for nonprofit hospitals, according to an analysis of hospital financial records by Johns Hopkins Bloomberg School professor Ge Bai for public health.

Allina is one of Minnesota’s largest healthcare systems and has grown largely through acquisitions. Since 2013, annual earnings have ranged from $30 million to $380 million. Last year was the first in the last decade that the company lost money, largely due to lost investments.

The financial success has paid off. Allina’s president earned $3.5 million in 2021, the latest year for which data is available. The health system recently built a $12 million conference center.

Still, Allina is sometimes harsh with patients. Physicians have become accustomed to seeing messages in electronic medical records informing them that a patient is “no longer eligible for treatment” because “medical funds have not been paid.”

dr Rita Raverty, a GP who works at an Allina clinic, said the reports were alarming because they meant she could not provide ongoing care for some of her patients who are facing a range of health risks.

“No one wins if patients don’t receive preventative care,” said Dr. Raverty. “It leads to worse disease outcomes if you don’t recognize things early on.”

Doctors and patients described being unable to fill out medical forms children needed to enroll in daycare or provide proof of immunizations for school.

Serena Gragert, who worked as an appointment scheduler at an Allina clinic in Minneapolis until 2021, said the computer system simply didn’t allow her to book future appointments for some patients with outstanding balances.

Ms. Gragert and other Allina employees said some of the kicked-out patients had incomes low enough to be eligible for Medicaid, the federal insurance program for poor people. It also means these patients would be entitled to free care under Allina’s own financial assistance policy – something many patients don’t know exists when they seek treatment.

Ms Bergerson, Allina’s spokeswoman, did not dispute this but said the health system is making “tremendous efforts to support patients with their financial obligations for medical care”.

Allina employees said politics forced them to ration care.

Beth Gunhus, a pediatric nurse, recalled a case where a mother gave birth to her three children. One had scabies, an intensely itchy skin condition caused by mites burrowing into the body. She wanted to follow best practices and treat the entire family, who were sharing a bed in a single room they rented, to ensure the disease didn’t spread further. But she was only able to write a prescription for two of the children. The third party’s account was blocked due to unpaid bills.

“There are so many better ways to save money than what we do,” Ms Gunhus said.

Allina says the policy only applies to debt related to care provided by her clinics, not her hospitals. But patients said in interviews that they were denied the grant after running into debt for the services they received at Allina’s hospitals.

Because Allina is the dominant healthcare system in some rural areas of Minnesota, patients who are kicked out may have few options.

Jennifer Blaido lives in Isanti, a small town outside of Minneapolis, and Allina owns the only hospital there. Ms Blaido, a mechanic, said she racked up nearly $200,000 in bills from a two-week stay at Allina’s Mercy Hospital in 2009 for complications from pneumonia, as well as multiple visits to the emergency room for asthma attacks. Ms Blaido, a mother of four, said most of the hospitalization was not covered by her health insurance and she had been unable to raise enough money to stem the debt.

Last year Ms Blaido was terrified of cancer and said she could not get an appointment to see a doctor at Mercy Hospital. She had to drive more than an hour to be examined by a health care system that had nothing to do with Allina.

Allina does not explicitly disclose this policy to patients. It is not mentioned in the healthcare system’s list of “Frequently Asked Questions” about billing practices. In at least one instance, Allina has denied it even existed.

In a lawsuit filed in Minnesota state court last year, Allina is suing couple Jordan and JoLynda Anderson for nearly $10,000 in unpaid medical bills.

In court filings, the couple described how Allina canceled Ms. Anderson’s appointments and told her she couldn’t make new appointments until she set up three separate payment plans — one with the health care system and two with his collection agencies.

Even after setting up these payment plans, which totaled $580 per month, the canceled appointments were never restored. Allina allows patients to come back only after paying the entire debt.

Ms. Anderson recalls being devastated when she missed seeing an endocrinologist who specialized in her chronic condition. She had already waited four months for the appointment and could not get a new one.

“It felt like I was being punished and the punishment was being allowed to stay sick,” she said.

Ms Bergerson declined to comment on these cases, citing patients’ privacy.

When the Andersons asked in court for a copy of Allina’s policy to exclude patients with unpaid bills, the hospital’s attorneys responded, “Allina does not have a written policy regarding the cancellation of services or the termination of scheduled and/or physician referral services or appointments that are unpaid.” Debts.”

In fact, Allina’s policy, created in 2006, instructs employees on exactly how to do this. It states, among other things, that the staff should “cancel all future appointments that the patient has made in a clinic”.

It offers patients some opportunities to continue receiving care despite unpaid bills. One option is to have a loan approved through the hospital. Another option is to file for bankruptcy.

Susan C. Beachy contributed to the research.