Attorney General Ellison secures up to $1.4M in medical-debt reduction and refunds
Stevens Community Medical Center in Morris improperly calculated discounts it was required by the Hospital Agreement and state law to provide uninsured patients with incomes under $125K; some uninsured patients billed up to 20% more than law allows
Up to nearly 3,500 patients potentially eligible for refunds or reductions in medical debt
August 10, 2026 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has reached a settlement with Stevens Community Medical Center (SCMC) of Morris, Minnesota that requires SCMC to provide up to $1,412,776.25 in refunds or reductions in medical debt to eligible uninsured patients that received services from April 1, 2020 to December 31, 2025. In the settlement, Attorney General Ellison’s office alleges that SCMC improperly calculated the discount it was required to provide to uninsured patients with household incomes under $125,000, in violation of a regulatory agreement between the Attorney General’s office and Minnesota’s nonprofit hospitals, known as the Hospital Agreement, and Minnesota law on billing uninsured patients. These miscalculations led to some uninsured SCMC patients being billed up to 20.5 percent more than Minnesota law allows.
For patients to be eligible for a refund or reduction in medical debt from SCMC, they must verify that their household income was under $125,000 when they received services from SCMC. Nearly 3,500 SCMC patients may be eligible for a refund or debt-reduction.
“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 SCMC cooperated with our investigation and remedied its actions through this settlement. It reflects my expectation and all Minnesotans’ expectations that Minnesota hospitals honor their end of the bargain when billing uninsured Minnesotans.”
Attorney General’s authority to protect Minnesotans from aggressive billing and debt collection by hospitals
Attorney General Ellison’s office launched this investigation under its authority in 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 other provisions, the Hospital Agreement addresses uninsured discounts, charity care, reasonable payment plans, referrals to collection agencies, and medical-debt collections conduct.
The Minnesota Attorney General’s Office first reached the Hospital Agreement with Minnesota’s hospitals in 2005. In 2021, Attorney General Ellison successfully negotiated an extension of the Hospital Agreement until 2027, which includes Minnesota’s two for-profit hospital systems as well as all of Minnesota’s 133 nonprofit hospitals.
The uninsured billing provision in the Hospital Agreement — which required that hospitals provide uninsured patients with household incomes under $125,000 with the same discount they gave to their “most favored insurer” (i.e., the insurer that delivered the most revenue to the hospital) — was superseded on November 1, 2023, by Minnesota law on billing uninsured patients (Minn. Stat. § 144.589). Since that date, hospitals are required to provide uninsured patients with household incomes under $125,000 with the highest discount they provide to any private insurer.
Requirements of the settlement
The settlement Attorney General Ellison’s office reached requires SCMC to notify 3,478 patients that were billed for services from April 1, 2020 to December 31, 2025 of the potential additional discount in the form of a refund and/or a reduction in outstanding medical debt. If patients verify their income was under $125,000 at the time they received services, SCMC will provide them with a refund or an adjustment to outstanding medical debt. The refund or adjustment to medical debt is based on the percentage discount patients were entitled to under the Hospital Agreement (from April 1, 2020 to October 31, 2023) or Minnesota law on billing uninsured patients (from November 1, 2023 to December 31, 2025).
Prior AGO enforcement of Hospital Agreement
During Attorney General Ellison’s tenure, the Attorney General’s Office has enforced the Hospital Agreement in settlements with other hospitals that the Office alleged violated various terms of the Hospital Agreement.
- In May 2025, Attorney General Ellison’s Office reached a settlement with Mayo Clinic that requires Mayo to change its charity care and debt collection practices. The Office’s investigation found that among other things, Mayo Clinic's policies included barriers to patients' access to charity care and Mayo Clinic engaged in aggressive debt-collection practices in contravention of the Minnesota Hospital Agreement and Mayo’s charitable mission and values. The settlement requires Mayo to provide charity care to certain presumptively eligible patients and streamline their charity-care application process, and prohibits Mayo Clinic from suing to collect medical debt in other than extraordinary circumstances. Attorney General Ellison also released a report of his Office’s investigative findings about Mayo’s charity care and debt-collection practices, along with legislative recommendations
- In October 2020, Attorney General Ellison’s Office reached a settlement with Hutchinson Hospital for violations of the Hospital Agreement. The Office alleged that Hutchinson Hospital 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, all of which led to ballooning payments and defaults. Under that settlement, Hutchinson Hospital forgave $184,000 in patient debt and provided certain patients with the opportunity to receive a 40 percent discount on their outstanding medical bills.
Attorney General Ellison’s fight for legal protections for Minnesotans with medical debt
In 2024, the Minnesota Legislature passed and Governor Walz signed the Minnesota Debt Fairness Act, which Attorney General Ellison and bill co-authors Sen. Liz Boldon and Rep. Liz Reyer successfully championed. As a result of their work, Minnesotans’ medical debt can no longer be reported to credit bureaus, medical providers may no longer withhold medically necessary care due to unpaid medical debt, medical debt may no longer be transferred to a patient’s spouse, and Minnesotans are protected from further unethical medical debt collections practices, among other features of the law. More information about the Minnesota Debt Fairness Act is available on Attorney General Ellison’s website.
Contact Attorney General’s Office with complaints
If you think you have been the victim of unfair or unreasonable medical billing or debt collection practices, please submit a complaint on the Attorney General’s website or call the office at (651) 296-3353 (Metro area), (800) 657-3787 (Greater Minnesota), or (800) 627-3529 (Minnesota Relay). You may also refer to the publications Medical Billing Pointers and Debt Collection Fact Sheeton Attorney General Ellison’s website.
