Nonprofit Health System Ends Practice Of Denying Care To Patients In Debt

Allina Health, a large nonprofit health care system based in Minnesota, announced Wednesday that it will end its policy of denying Medicare patients with outstanding bills of $4,500 or more.

And while Alina Hospitals was caring for everyone in the emergency room, other services were disrupted for patients in debt, including children and people with chronic conditions like diabetes and depression, The New York Times reported in June. Patients were not allowed to leave until their debts were paid in full.

Alina announced her policy change less than a week after Minnesota Attorney General Kate Ellison said her office was investigating Alina's practice of denying Medicare to patients in debt. The investigation is part of a larger review of how government hospitals, which are all for-profit, bill patients for care.

"There is a growing perception that there is very little difference in behavior between a for-profit hospital and a non-profit hospital," Ellison said in an interview.

Nonprofit hospitals like Alina get huge tax breaks in exchange for helping the poorest and most vulnerable people in their communities. But a study by The Times last year found that many nonprofits have largely abandoned their charitable mission in recent decades, with devastating consequences for patients.

Allina Health has 13 hospitals and more than 90 clinics in Minnesota and Wisconsin. According to the Lawn Institute, a healthcare think tank, her nonprofit status allowed Alina to avoid about $266 million in state, local and federal taxes in 2020.

In return for these lucrative tax breaks, the IRS requires Alina and its nonprofit partners to provide services to their communities, including providing low-cost or free health care to low-income patients.

But the federal rules say nothing about how poor patients must be to qualify for the free treatment. Alina spent less than 1% of her costs on charitable care in 2020, well below the average for nonprofit hospitals of about 2%, according to an analysis of hospital financial records by JB, a professor at Bloomberg Johns Hopkins. College of Public Health.

"The industry needs to let people know that they may be eligible for charity," Ellison said. "People feel like they haven't been told anything at all."

Just under 100 million Americans are in medical debt. Their accounts account for about half of the country's consumer debt.

Hospitals are increasingly using a variety of aggressive methods to collect patients' debts. Some flood the local courts with lawsuits to extort money from patients. Others take patients' salaries away or deny them tax coverage.

But Alina's policy went further.

The 12-page document instructed health system officials on how to cancel appointments for patients who owed $4,500 or more. The policy required healthcare professionals to lock down patients' electronic health records so staff could not schedule future appointments.

Some of the evacuees had incomes low enough to qualify for Medicaid, the federal insurance program for the poor.

Alina's staff say politics has forced them to ration their care, even for children.

The health care system initially defended the policy when contacted by The Times in May, saying it would only reduce the number of patients after phoning them and sending them frequent emails with information on how to apply for financial aid.

But Alina spokeswoman Connie Bergerson said in a statement this week that the health care system reviewed the policy this summer and determined that "there are opportunities to benefit differently from our clinical teams and our technology to deliver financial assistance resources to patients." Who needs this support?"

Alina's doctors continue to push for more changes. And earlier this month, primary care physicians launched efforts to unionize. If successful, it will be the largest medical association in the country. Some physicians are pushing for legislative changes that limit or prohibit the practice of denying Medicare to patients who have unpaid bills.

"The state of Minnesota should prohibit children from withholding medical care because of medical debt," said Jennifer Mehmel, a pediatrician who recently retired from her tenure at Aleena Hospital. "It is clear that the children are the innocent victims of this case, but they are the ones who bear the cost of this case."

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