In an arrangement negotiated by State Attorney General Mike Hatch, the majority of Minnesota's hospitals agreed to provide discounted care to uninsured patients and to be less aggressive in their debt collecting for the next two years.
This agreement comes on the heels of numerous studies and reports finding that uninsured patients are often charged more than insured patients. A recent Commonwealth Fund study found that an estimated 77 million Americans ages 19 and older—nearly two of five (37%) adults—have difficulty paying medical bills, accrued medical debt, or both.
Among participating Minnesota hospitals, lower prices will be charged to uninsured patients with incomes below $125,000 a year. For a given service, these patients will be charged no more than the amount the hospital would receive for the same service from the insurance company that was its largest payer the previous year. In most cases, the discount will result in a 40% to 60% reduction in prices. "I congratulate these hospitals for stepping forward and addressing this issue, which is in the forefront of almost every state," says Attorney General Hatch. "By exercising this leadership, these hospitals honor their communities and their patients."[1]
Hospitals and clinics will change their debt collection practices as well. Before filing lawsuits against patients for medical debt, administrators will thoroughly examine their records to ensure that the patient actually has a debt; all insurance companies that may be accountable for the claim have been billed; the patient, if unable to pay the entire bill, was offered a payment plan; and the patient was offered any free or discounted hospital charity care for which they were eligible. Hospitals and clinics cannot take money from a patient's bank account or wages without a legal judgment authorizing them to do so. If patients have limited income and assets, hospitals will take that into account as well. There will be a "zero tolerance" policy in place for abusive debt collection agencies and attorneys, and these entities will be reviewed periodically by the hospital boards. There also will be no default judgment against patients until they are given a fair chance to respond. Finally, there will be a streamlined process for patients to question or dispute bills from hospitals or clinics.
By August 2005, over 50 hospitals and systems from across the state had joined the initiative, representing more than 75% of all hospital admissions in Minnesota.
Reference
[1] Email correspondence to authors.
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