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Minnesota Attorney General Keith Ellison announced Friday that his office has obtained a settlement with Mayo Clinic that requires Mayo to change its charity care and debt collection practices. According to the terms of the settlement, Mayo Clinic must provide charity care to certain presumptively eligible patients and streamline their charity care application process. The settlement also prohibits Mayo Clinic from suing to collect medical debt in other than extraordinary circumstances.

The settlement resolves the attorney general’s investigation, announced in December 2022 after allegations reported in the Rochester Post-Bulletin that Mayo had sued patients who may have qualified for charity care to collect medical debt. The attorney general’s investigation found that, among other things, Mayo Clinic’s policies included barriers to patients’ access to charity care and Mayo Clinic engaged in aggressive debt-collection practices in contravention of the Minnesota Hospital Agreement and its charitable mission and values. As a result of the investigation and Mayo’s cooperation with it, the percentage of Mayo’s operating expenses provided to charity care in 2024 rose to the highest level in more than five years.

“In exchange for their tax exemption, nonprofit hospitals are supposed to give back to their communities by providing free or reduced-cost health care to folks with low incomes,” Ellison said. “My office investigated Mayo Clinic and discovered that they were actively dissuading certain patients from seeking charity care. While this is disappointing, I am heartened by the substantial improvements Mayo Clinic has made to their charity care program, and I am grateful for their cooperation with our investigation. The settlement I have reached with Mayo Clinic ensures their improved charity care policies and procedures will remain in place. Our investigation also revealed shortcomings in the charity care system generally, and I hope lawmakers will consider my office’s recommendations to address those shortcomings and help more Minnesotans get the care they need to be well.”

The settlement, filed in Ramsey County District Court, requires Mayo to maintain a charity care policy that provides free care to patients with incomes up to 200% of the federal poverty guidelines and between 40% to 50% discount for patients with incomes up to 400% of the federal poverty guidelines. The settlement also requires Mayo to screen certain patients to determine if they are presumptively eligible for charity care, and if so, provide the patients a discount in accordance with its charity care policies without requiring them to fill out an application. For patients who are not presumptively eligible, the settlement requires that Mayo use a streamlined application to reduce burden on patients. Additionally, the settlement prohibits Mayo from suing patients to collect debt other than in exceptional circumstances and requires approval of Mayo’s CFO before filing any lawsuit.

In addition to the investigative findings, the attorney general’s investigation revealed that Minnesota’s regulatory framework was insufficient to ensure access to charity care and counter the crippling effects of medical debt, which impacts more than 20 million Americans and has devastating effects.

In 2023, the Minnesota Legislature passed a bill codifying various aspects of the Hospital Agreement and requiring hospitals to screen uninsured patients and patients whose insurance status is unknown for eligibility for charity care. The legislature further addressed medical debt with the 2024 passage of the Minnesota Debt Fairness Act.

In addition to other improvements, as of Oct. 1 medical debt is no longer automatically transferred to one’s spouse, cannot be used to deny medically necessary care, and can no longer be reported to credit reporting agencies.

The report advocates for the following legislative changes to provide patients greater access to charity care:

Expand presumptive eligibility to all patients, not just those who are uninsured or whose insurance status is unknown. This is the best way to ensure that patients who are eligible for charity care under a hospital’s policy are able to access the assistance.

Provide an eligibility floor for charity care based on income. As the report details, hospitals establish their own eligibility criteria for charity care, meaning eligibility can vary by hospital, resulting in lack of access to charity care for certain patients. A basic eligibility floor (e.g., income at 200% of federal poverty guidelines) will improve consistency among hospitals and increase the amount of charity care provided.

Enact a uniform and simple charity care application. As the attorney general’s investigation revealed, a burdensome charity care application results in patients who are otherwise eligible not receiving charity care, and potentially even facing harsh and unnecessary collection action. A uniform, simple application (and follow-up) would increase eligible patients’ ability to access charity care.

Ellison encouraged anyone who is struggling with medical debt to contact the Minnesota Attorney General’s Office by submitting a complaint form on the Attorney General’s website. The office can also be reached by calling 651-296-3353 (Metro) or 800-657-3787 (Greater Minnesota).

Mayo Clinic issued the following statement:

“Mayo Clinic reached an agreement with the Minnesota Office of Attorney General (MN OAG) validating our longstanding commitment to ensuring all patients have access to the care they need, regardless of financial circumstances. After their review, the MN OAG’s factual findings demonstrate that Mayo Clinic adheres to and in many cases exceeds all regulatory guidelines for charity care. The settlement does not require Mayo Clinic to change any current policies or practices. As part of the settlement, Mayo Clinic agreed to continue policies and practices that it began long before the settlement was reached. The agreement also does not include any financial restitution or penalty by the MN OAG, which they have imposed in other cases. As noted by the MN AOG, its public report “does not constitute a legal opinion or reflect a formal determination by the Attorney General.” Mayo contests many of the findings reflected in the report because they are inaccurate or out of context which is why they were not included in the actual settlement agreement.

“Mayo Clinic offers financial assistance programs for patients who are unable to pay, and patients may apply for financial assistance at any point prior to services, during care, and after care has been provided. Mayo Clinic communicates the availability of financial assistance on its website, when patients first register for care, and in all billing statements and related letters and offers free financial counseling to uninsured or underinsured patients.

“The agreement also reflects that Mayo Clinic has voluntarily adopted practices that support patients who are facing financial challenges. For example, since 2023 Mayo Clinic has expanded the practice of “presumptive eligibility,” in which qualifying patients receive financial assistance without needing to complete a financial assistance application. Since 2019, Mayo Clinic locations in Minnesota have provided over $600 million in financial assistance to patients.

“Mayo Clinic continuously evaluates and updates its practices to best serve patients and the community.”