Minnesota AG strikes deal with Mayo Clinic to continue reduced-cost care
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Mayo Clinic agreed to continue presumptively making some patients in Minnesota eligible for free or discounted care as part of a settlement with the state attorney general following an investigation into methods the health system used to collect medical debt from patients.
Why it matters: The settlement, announced Friday, comes amid increasing scrutiny of nonprofit hospitals, which are required to provide some level of payment assistance or "charity care" to low-income patients but have wide latitude to set their own financial aid policies.
- It's unclear how many people in the United States are eligible for free or reduced hospital care, according to KFF.
State of play: Mayo Clinic must continue to provide free care to patients who earn up to 200% of the federal poverty level. Patients with incomes up to 400% of the poverty level will get a 40% to 50% discount. The federal poverty level for 2025 is $15,650 for a single-person household.
- The health system also has to screen patients to figure out if they're eligible for charity care and offer a streamlined application for discounts to patients who aren't presumptively eligible.
- Mayo Clinic can no longer sue patients to collect medical debt other than in "exceptional circumstances" and with the approval of the system's chief financial officer, per the settlement.
The health system said in a statement that it had already voluntarily adopted the policies outlined in the settlement, and no changes to current policies are required.
- Mayo Clinic facilities in Minnesota have provided more than $600 million in financial assistance, the health system told Axios.
- According to a chart in the settlement, Mayo Clinic spent 1.55% of its expenses on financial assistance in 2024, up from 0.87% in 2023.
Catch up quick: The settlement ends an investigation launched into Mayo Clinic by Minnesota Attorney General Keith Ellison in 2022 after the Rochester Post-Bulletin reported that the health system allegedly sued patients who may have otherwise qualified for financial assistance to collect payments.
- Mayo Clinic denied any wrongdoing as part of the settlement.
What they're saying: "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 in a news release.
- Ellison added that he's seen significant improvements to Mayo Clinic's charity care program since he began the investigation and he's pleased with their cooperation.
Editor's note: The story has been updated to clarify that Mayo had already voluntarily adopted the policies outlined in the settlement.
