Many hospitals in the United States use aggressive tactics to collect medical debt. They flood local courts with collection lawsuits. They guarantee the salaries of the patients. They seize their tax refunds.
But a wealthy nonprofit healthcare system in the Midwest is among those taking it a step further: withholding care from patients who have unpaid medical bills.
Allina Health System, which operates more than 100 hospitals and clinics in Minnesota and Wisconsin and generates $4 billion in revenue annually, sometimes turns away patients who are deeply in debt, according to internal documents and interviews with doctors, nurses and patients.
Although Allinas hospitals will treat anyone in the emergency room, other services may be disrupted for indebted patients, including children and those with chronic illnesses such as diabetes and depression. Patients are not allowed to return until they have paid off their debt in full.
Non-profit hospitals like Allina get huge tax breaks in exchange for providing care to the poorest people in their communities. But a New York Times investigation last year found that nonprofits have failed to fulfill their charitable missions in recent decades, with little consequence.
Allina has an explicit policy to cut patients who owe money for services they received at the health system’s 90 clinics. A 12-page document reviewed by the Times instructs Allinas staff how to cancel appointments for patients with at least $4,500 in unpaid debt. The policy explains how to lock down their electronic health records so staff cannot schedule future appointments.
These are the poorest patients who have the most serious medical problems, said Matt Hoffman, a primary care physician at Allina in Vadnais Heights, Minn. These are the patients who most need our care.
Allina Health said it has a robust financial assistance program that helps more than 12,000 of its 1.9 million patients with medical bills on an average year. The hospital system only cuts patients off if they’ve racked up at least $1,500 in unpaid debt three separate times. She contacts them by phone and with repeated letters that include information about her request for financial aid, said Conny Bergerson, a hospital spokeswoman.
Allina Health’s goal is, and always will be, to not allow any patient to be left without services for financial reasons, Ms. Bergerson said. She said disruption to services is rare, but she declined to provide information on how often it happens.
Allina suspended its policy of cutting patients in March 2020, at the onset of the coronavirus pandemic, before reinstating it in April 2021.
An estimated 100 million Americans have medical debt. Their accounts make up about half of all outstanding debt in the country.
About 20 percent of hospitals nationwide have collection policies that allow them to cancel care, according to a survey last year by KFF Health News. Many of these are non-profits. The government doesn’t track how often hospitals suspend care.
Under federal law, hospitals are required to treat anyone who comes to the emergency room, regardless of the person’s financial ability. 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 cancers or diabetes.
In 2020, thanks to its nonprofit status, Allina avoided an estimated $266 million in state, local and federal taxes, according to the Lown Institute, a think tank that studies health care.
In return, the Internal Revenue Service requires Allina and thousands of other not-for-profit hospital systems to benefit their local communities, including by providing free or reduced-cost care to low-income patients.
But federal rules don’t dictate how poor a patient must be to be eligible for free treatment. In 2020, Allina spent less than half of 1% of its spending on charitable care, well below the national average of about 2% for nonprofit hospitals, according to an analysis of financial records from the . Ge Bai hospital, a professor at the Johns Hopkins Bloomberg School of Public Health.
Allina is one of the largest healthcare systems in Minnesota, having grown largely through acquisitions. Since 2013, its annual profits have ranged between $30 million and $380 million. Last year was the first in a decade in which it lost money, largely due to investment losses.
Financial success has paid dividends. The Allinas chairman earned $3.5 million in 2021, the most recent year for which data is available. The health system recently built a $12 million conference center.
Yet Alina sometimes plays rough with the patients. Physicians have become accustomed to seeing messages in the electronic health record informing them that a patient will no longer be eligible for care due to unpaid medical balances.
Dr Rita Raverty, a general practitioner who works at a clinic in Allina, said the notifications were alarming because they meant she could not provide ongoing care for some of her patients who face a range of health risks.
Nobody wins when patients can’t get preventative care, said Dr. Raverty. He creates worse disease outcomes when you don’t plan ahead.
Doctors and patients reported being unable to fill out the medical forms children needed to enroll in daycare or show proof of vaccination for school.
Serena Gragert, who worked as a scheduler at an Allina clinic in Minneapolis through 2021, said the computer system simply didn’t allow her to book appointments for some patients with outstanding balances.
Ms. Gragert and other Allina employees said some of the patients who were kicked out had incomes low enough to qualify for Medicaid, the federal state’s insurance program for the poor. That also means those patients would be eligible for free care under Allina’s financial assistance policy, something many patients don’t know exists when they seek care.
Ms. Bergerson, Allina’s spokeswoman, did not dispute this, but said the health care system has gone to great lengths to assist patients with their financial obligations for medical care.
Allina employees said politics had forced them to ration care.
Beth Gunhus, a pediatric nurse, recalled a case where a mother brought her three children. One had scabies, an intensely itchy skin condition caused by mites that burrow into the body. She wanted to follow best practices and treat the entire family, who shared a bed in a single room they had rented, to make sure the scabies didn’t spread further. But she could only write a recipe for two of the children. The third party account has been blocked due to unpaid invoices.
There are many better ways to save money than what we are doing, Ms Gunhus said.
Allina says the policy only applies to debts related to care provided by her clinics, not her hospitals. But patients said in interviews they were cut off after going into debt for services they received at hospitals in Allinas.
Since Allina is the dominant healthcare system in some rural Minnesota areas, being deported can leave patients with few options.
Jennifer Blaido lives in Isanti, a small town outside Minneapolis, and Allina owns the only hospital there. Ms. Blaido, a mechanic, said she racked up nearly $200,000 in utility bills from a two-week stay at Allinas Mercy Hospital in 2009 for complications from pneumonia, along with several emergency room visits for asthma exacerbations. Ms Blaido, a mother of four, said most of her hospital stay was not covered by her health insurance and that she was unable to scrape together enough money to pay off the debt.
Last year, Ms. Blaido had a cancer scare and said she couldn’t get a doctor’s appointment at Mercy Hospital. She had to drive more than an hour to be examined at a health system unrelated to Allina.
Allina does not make this policy explicit to patients. He is not mentioned in the Healthcare Systems list of billing practices FAQs. In at least one case, Allina denied it existed.
In a lawsuit filed last year in Minnesota state court, Allina is suing a couple, Jordan and JoLynda Anderson, for nearly $10,000 in unpaid medical bills.
In court documents, the couple described how Allina canceled Ms. Anderson’s appointments and told her she couldn’t book new ones until she set up three separate payment plans, one with the health system and two with the his debt collectors.
Even after payment plans were set up, totaling $580 a month, the canceled appointments were never reinstated. Allina allows patients to return only after paying off the entire debt.
Ms. Anderson recalls being devastated to miss her visit to an endocrinologist who specializes in a chronic condition she has. She had already waited four months for the appointment and she was unable to get a new one.
I felt like I was being punished, and the punishment was that you could stay sick, she said.
Ms. Bergerson declined to comment on these cases, citing patient privacy.
When the Andersons asked in court for a copy of Allina’s policy to hold patients with unpaid bills, the hospital’s lawyers replied: debts.
In fact, Allinas’ policy, created in 2006, educates employees on how to do exactly that. Among other things, it tells staff to cancel any future appointments the patient has scheduled at any clinic.
It provides some ways for patients to continue seeing despite unpaid bills. One is getting approved for a loan through the hospital. Another is filing for bankruptcy.
Susan C. Beachy contributed to the research.
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