Attorney General Ellison secures relief from unfair bill collection for Hutchinson Hospital patients

After unilaterally increasing patients’ monthly medical bills, Hutchinson Hospital will restore lowest available monthly payments and refrain from future misconduct, in accordance with law and Hospital Agreement

October 29, 2020 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has reached a settlement agreement with Hutchinson Hospital that requires it to restore more favorable hospital billing terms that it had unilaterally terminated for many of its patients, which had the effect of increasing their monthly medical bills beyond what patients agreed to pay. The Assurance of Discontinuance, filed in Ramsey County District Court, alleges that Hutchinson — violating a regulatory agreement between the Attorney General’s office and Minnesota’s nonprofit hospitals — improperly increased patients’ payment plans, deactivated the payment plans of patients who did not agree to the new terms, and pressured patients to secure loans or use their retirement savings to satisfy their medical debts. These actions led to ballooning payments and defaults, the settlement alleges. 

“High-quality, affordable healthcare is essential for people to be able to afford their lives and live with dignity and respect,” Attorney General Ellison said.  “I expect that Minnesota’s nonprofit hospitals will conduct their billing practices in accordance with the law, their charitable mission, and their agreement with this office. I appreciate that Hutchinson remedied its actions through this settlement. It reflects my expectation that Minnesota hospitals honor their end of the bargain when collecting medical debt from Minnesotans.” 

The Attorney General’s office launched this investigation under Minnesota law and a regulatory agreement that the Office holds with all nonprofit hospitals in Minnesota, collectively referred to as the “Hospital Agreement.” The Hospital Agreement protects patients against aggressive billing and debt collection practices by Minnesota nonprofit hospitals and requires that they meet certain standards of conduct imposed by their charitable missions.  Among many others, the Hospital Agreement’s provisions include: 

• Hospitals must offer a reasonable payment plan to patients who are unable to pay the full amount of their bill before sending them to collections. 
• Hospitals, after entering into a reasonable payment plan with a patient, may not refer debt to a collection agency if the patient makes payments in accordance with the terms of that payment plan agreed to by the hospital.
• Hospitals must not charge uninsured patients more than they charged their “most favored insurer” for treatment and “shall apply the same percentage discount . . . for insured treatment that [they] would apply to charges incurred by a policyholder of its most favored insurer.”
• Hospitals must adopt a zero-tolerance policy for abusive, harassing, oppressive, or misleading language or collections conduct when collecting medical debts. 

The settlement with Hutchinson Hospital requires Hutchinson to provide the affected patients with the lowest available monthly payment to which they are entitled between their old and new monthly payment amounts, and prevents Hutchinson from deactivating payment plans of patients in the future.  The settlement further prevents Hutchinson from establishing a new payment plan policy that has the effect of increasing the monthly payments of then-existing payment plans. Hutchinson is also prohibited from erroneously threatening patients with collections for failing to pay their medical bills. Hutchinson is subject to a $25,000 civil penalty if it violates the terms of the settlement.   

If you think you have been the victim of unfair or unreasonable medical billing or debt collection practices, please refer to the Attorney General’s publications Medical Billing Pointers and Debt Collection Fact Sheet, available on the Attorney General’s website at https://www.ag.state.mn.us/Office/Publications.asp.  

You may also submit an online complaint form on the Attorney General’s website at www.ag.state.mn.us/Office/Complaint.asp or by contacting the office at:  

Office of Minnesota Attorney General Keith Ellison 
445 Minnesota Street, Suite 1400 
St. Paul, MN 55101 
(651) 596-3353 (Minneapolis–Saint Paul metro area) 
(800) 657-3787 (Greater Minnesota)