Hutchinson Hospital forgives $184K in medical debt following settlement

The AG's office accused the nonprofit hospital of violating a regulatory agreement.
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hutchinson health hospital

A settlement agreement between Hutchinson Health Hospital and the Minnesota Attorney General's Office resulted in $184,000 in medical debt forgiveness for some patients. 

They reached a settlement in October 2020, with Attorney General Keith Ellison sharing details of the settlement in a news release Friday

Ellison noted some patients will also get a 40% discount on their outstanding medical bills if their debt is paid in full by June 30. 

“Hutchinson Health’s settlement with my office was a positive step forward in helping Hutchinson’s patients afford their lives and get the high-quality medical care that all Minnesotans deserve. I’m pleased to see the positive, tangible results that the settlement has had so far, and that Hutchinson has taken additional steps to remedy any harm that patients experienced due to its actions,” Attorney General Ellison said in a statement.

"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.”

The settlement stems from an Attorney General's Office investigation into the hospital's bill collection procedures.

The AG's office alleged Hutchinson Hospital, which is part of HealthPartners, violated a regulatory agreement between the AG's office and Minnesota's nonprofit hospitals, saying it improperly increased patients’ payment plans; deactivated the payment plans of those who didn't agree to the new terms; and pressured patients to secure loans or use their retirement savings to satisfy their medical debts. 

The AG's office said doing this led to ballooning payments and defaults. 

The Assurance of Discontinuance, previously announced last October, required Hutchinson Hospital to restore "more favorable" hospital billing terms that it had unilaterally terminated for many of its patients.

Terminating the billing terms led to patients' having to pay more per month than what they'd agreed to pay. The settlement required Hutchinson Hospital to provide patients affected with the lowest monthly payment available to them between their old and new monthly payment amounts. This resulted in Hutchinson Hospital forgiving $184,000 in debt.

Other patients who incurred medical debt before Nov. 1, 2019, will get a 40% discount on their remaining balance if they pay off their debt by the end of June. 

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Hutchinson Hospital patients should look at their most recent bill and contact the hospital to see if they're eligible for the discount, the AG's office says.

Meanwhile, those who can't pay off their debt by the end of the month will get to keep their lowest available monthly payment they were entitled to between their old and new monthly payment amounts. 

The Minnesota Hospital Agreement, which is an agreement between all nonprofit hospitals in the state and the AG's office, has been in effect since 2005 and is renegotiated every five years (it'll be renegotiated in 2022). 

The agreement protects patients against aggressive billing and debt collection practices and requires the hospitals to offer a reasonable payment plan to patients who can't pay the full amount, among other things. 

In a statement to Bring Me The News, HealthPartners said: 

"We’re committed to providing high-quality, affordable health care to the community and supporting our patients who are having difficulty paying their medical bills. Part of our ongoing investment in high-quality, affordable care necessitated a change to our medical record and billing system in 2019, which impacted how payment plans were administered.

"The process of working with the Attorney General and his team was helpful in showing where we could have improved this transition process. We encourage individuals with questions about their bills or payment arrangements to contact us directly at 320-484-4493."

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