Attorney General Lori Swanson today filed a lawsuit against Allina Health System in Hennepin County District Court, alleging that it violated state usury laws by charging rates of interest of up to 18 percent on medical debts owed by patients.

"The high cost of health care is one of the biggest financial obstacles faced by many Minnesota families. Allina has dug a deeper financial hole for patients facing tough economic times by charging usurious interest rates of up to 18 percent on medical bills," Swanson said.

Minnesota's usury law, §334.01, et seq., imposes a cap of only 8% interest on such debts. The Attorney General's lawsuit alleges that Allina has been charging up to 18% interest on medical debts in violation of state usury law.

The Complaint names as defendants both Allina Health System and its subsidiary, Accounts Receivable Services, LLC, a debt collection agency owned by Allina. Accounts Receivable Services, LLC does business under the name MedCredit Financial Services.

Swanson said that Allina typically presents patients with medical bills not covered by insurance three options to avoid being referred to a debt collection agency: (1) to pay the medical bill in full immediately; (2) to pay the medical bill in three equal monthly installments; or (3) to pay their bill through MedCredit (owned by Allina), which charges interest of 18 percent on debts up to $4,999 and 12 percent on debts from $5,000 up to $9,999. The lawsuit alleges that, in some cases, Allina has failed to fully disclose the terms of MedCredit to patients, including the interest rates charged.

The lawsuit charges Allina with violating state usury laws as well as the state's consumer fraud laws. The lawsuit seeks to enjoin Allina from violating these laws and to obtain refunds for patients who were charged usurious and unlawful rates of interest.

Individuals who wish to file a consumer complaint may contact the Minnesota Attorney General's Office by calling 1-800-657-3787 or 651-296-3353. Consumers may also download a Complaint Form from by clicking here and mail the completed form to the Attorney General's Office at: 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101-2131.