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Mayo Clinic will prioritize privately insured patients over Medicare/Medicaid patients

The hospital says it's not unique to the Mayo Clinic, but it's not usually talked about.
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Eyebrows were raised this week after comments made by Mayo Clinic's CEO came to light, saying the world-renowned hospital would prioritize patients with private insurance over those on public programs.

The comments came from John Noseworthy in a videotaped speech to staff late last year, and the Star Tribune managed to get a transcript of the speech, which it reported on this week.

Noseworthy said while the Rochester hospital will always take patients regardless of whether they have public or private insurance, the private insurance holder would get priority if they get referred at the same time as someone on Medicare or Medicaid with similar ailments.

The reason for this, Noseworthy said, is so "we can be financially strong at the end of the year," with the newspaper pointing out that the Affordable Care Act has increased the proportion of American patients covered by Medicaid, for which the hospital only gets reimbursed 50-85 cents on the dollar.

But Mayo is not exactly struggling. The organization may be a not-for-profit but that didn't stop it from turning a record $834 million surplus in 2014, as the Business Journal reported. Though this slipped to around $526 million in 2015 because of rising labor and pension costs.

Not unique to the Mayo, but 'often not talked about'

While people might not be surprised that hospitals think this way, it's unusual for a hospital leader to spell it out in such terms.

But in a comment sent to GoMN, a spokesman said the challenge of balancing private vs. public payers isn't unique to the Mayo, "but it's often not talked about."

"That’s why we feel it is important to talk transparently about these complex issues with our staff," the spokesman added.

The Mayo says those on government health programs make up about 50 percent of the total services it provides, and that "medical need" will always be the top factor in its decision-making process when scheduling appointments.

But the hospital says it took a hit of about $1.8 billion in unpaid Medicare services last year across its entire organization.

In order to fund its continued research, care and education mission, the hospital group said it "needs to support its commercial insurance patient numbers in order to continue to subsidize the care of patients whose insurance does not cover the cost of their care."

But Noseworthy's comments drew criticism from the Minnesota Nurses Association, with regulatory and nursing policy specialist Matthew Keller writing that "there’s something fundamentally wrong with a healthcare system, especially one as vaunted as the Mayo clinic, that bases the care patients receive on their ability to pay."

Keller takes issue with the comments regarding rising Medicaid patients resulting from the Affordable Care Act, saying that these patients would previously have received charity care from the clinic or just not paid at all.

He also suggests that Noseworthy's comments are a sign the clinic is discriminating against Medicare patients, suggesting there could be grounds for having its status as a Medicare provider canceled as a result.

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