Mayo Clinic Reaches Settlement With Attorney General Over Debt Collection & Charity Care

St. Paul, MN (KROC-AM News)- Minnesota Attorney General Keith Ellison says his office has reached a settlement with Mayo Clinic over the healthcare giant’s charity care and debt collection practices. 

See Also: Mayo Clinic Net Income Hit Record High in 2024  

Ellison made the announcement on Friday. The settlement stems from an investigation that the Attorney General’s office started in 2022. 

A Mayo Clinic statement (listed in full below) on the settlement announcement calls some of the investigations findings "inaccurate, speculative, or are irrelevant to applicable legal requirements."

Mayo has improved its practices since the start of the investigation, according to Ellison.

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In exchange for being allowed to be a tax-exempt, Mayo Clinic and other non-profit hospitals are required by federal law to provide discounted or free care to patients unable to fully pay their bills. 

The law gives hospitals a wide range of discretion in setting the criteria needed to qualify for charity care and does not set a minimum requirement for charity care a hospital must provide, Ellison says. 

Minnesota Attorney General: Mayo Clinic Denied Care to Patients in Medical Debt, Engaged in "Aggressive" Debt Collection Practices

The Attorney General’s investigation found Mayo Clinic steered patients away from charity care and in some cases, ordered staff not to discuss charity care and instead asked patients to borrow money to cover their bills. 

Ellison described Mayo Clinic’s charity care application process as “burdensome” and said it “deterred otherwise eligible patients from seeking such care.” 

He also accused Mayo of delaying or denying care to patients with outstanding medical debt and engaging in “overly aggressive debt collection practices,” which included allegedly suing patients who qualified for charity care to recover medical debt. 

Ellison said Mayo has provided a five year high in charity care provided, more than double the care provided from 2022-2024 as a result of the investigation. 

Settlement Sets New Rules for Charity Care, Debt Collection at Mayo Clinic

Under the terms of the settlement, Mayo is prohibited from suing patients to collect debt other than in exceptional circumstances. Any future lawsuit would require approval of Mayo’s CFO. 

Mayo is also required to provide patients with incomes up to 200% of the federal poverty guidelines free care and discounts ranging from  40% to 50% patients with incomes up to 400% of the federal poverty guidelines. 

Certain Mayo Clinic patients will also be screened by the healthcare provider to determine if they meet the criteria for charity care and eligible patients will be granted the discounts without having to fill out an application. 

Ellison says Mayo will also streamline their charity care application to reduce its burden on patients. 

Mayo Clinic released a statement following the Attorney General’s announcement:

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, and Mayo did not agree to include them in the settlement agreement that is formally filed with the court, because those findings are inaccurate, speculative, or are irrelevant to applicable legal requirements.

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.

Story updated to include revised statement from Mayo Clinic.