Minnesota hospitals can no longer take action to collect delinquent bills until they screen patients for charity care that can reduce or eliminate their debts.
The requirement went into effect on November 1 as a result of state legislation. Lawmakers were prompted to act this year by reports that hospitals are suing patients for debts that are eligible for discounts or write-offs.
If Yolanda Pearson had known she was eligible for help, she said she could have paid off mounting medical debt and avoided collection efforts by the Mayo Clinic, which at one point cut off her family’s access to non-emergency care for four months .
“No one ever told us about any benefits or anything we might qualify for,” said Pearson, a Blaine mother who sought treatment at Mayo in Rochester six years ago for her son’s debilitating eye condition. “We had insurance, so I guess they just didn’t think to talk to us about it.”
The distinction between a patient supported by humanitarian care and one in debt is sometimes accidental, although hospitals have clear revenue and clinical guidelines to determine which patients qualify for assistance. Some patients simply did not know how to ask.
Sen. Liz Boldon, DFL-Rochester, said she wrote the screening bill to give everyone a chance to find out if they qualify for help. Minnesota has a low adult uninsured rate of under 5%, but a significant uninsured population that cannot afford the high co-pays and deductibles of health plans.
Boldon, a nurse, credited the Rochester Post-Bulletin investigation with identifying patients who could have received charity care but instead were being sued by Mayo for unpaid bills.
“This is a significant issue for Minnesota in many ways and has far-reaching effects,” she said. “When families have too much medical debt, that’s money they’re not spending on groceries or even future health care.” “I talk to a lot of patients who are avoiding care because they’re worried about their costs.”
Hospitals under the new requirements also cannot offer loans or repayment plans until they determine whether patients qualify for charity care or discounts.
Advocates believe the medical debt problem is worse than it appears in Minnesota. A widely cited national report estimates that 2% of adults in Minnesota have medical debt, compared to 13% of adults nationally.
However, the report is based on debts sent to collection agencies, and Minnesota hospitals have agreed in a contract with the state attorney general not to submit debts to such agencies. The 2% figure mainly refers to outpatient and other sources of medical care that are not subject to that hospital contract.
Mayo said in a statement that its charity care policies comply with Minnesota’s new requirements and that it “proactively offers financial counseling” to patients.
“Mayo Clinic is committed to providing world-class compassionate care to every person, including our patients facing difficult financial circumstances,” the statement said.
Minnesota hospitals reported $162 million in charity care in 2021 and $493 million in uncollectible debt. Both present challenges for hospitals that are increasingly reporting financial losses during and after the COVID-19 pandemic.
Pearson has health insurance at work, but said she still faces $17,000 in costs over the three years since her son was diagnosed with Coates disease.
The condition severely limited the vision in the now 11-year-old’s right eye, but treatment stabilized it. However, Pearson said he is at risk for more problems.
She testified in favor of the bill this spring, hoping it will help others and possibly her family if future medical bills come up.
“I would have definitely applied for (charity care),” she said, “especially because there were times when I couldn’t work because we had to be in Mayo. It was a challenging time for our family.”
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