Many hospitals in the United States use aggressive tactics to collect medical debt. They flood local courts with collections lawsuits. They garnish patients' wages. They seize their tax refunds.
But a nonprofit health system in the Midwest is among those taking things a step further: withholding care from patients who have unpaid medical bills.
Allina Health System, which runs more than 100 hospitals and clinics in Minnesota and Wisconsin and brings in $4 billion a year in revenue, sometimes rejects patients who are deep in debt, according to internal documents and interviews with doctors, nurses and patients.
Although Allina's hospitals will treat anyone in emergency rooms, other services can be cut off for indebted patients, including children and those with chronic illnesses such as diabetes and depression. Patients aren't allowed back until they pay off their debt entirely.
Nonprofit hospitals such as Allina get enormous tax breaks in exchange for providing care for the poorest people in their communities. But a New York Times investigation last year found that over the past several decades, nonprofits have fallen short of their charitable missions, with few consequences.
Allina has an explicit policy for cutting off patients who owe money for services they received at the health system's 90 clinics. A 12-page document reviewed by the Times instructs Allina's staff on how to cancel appointments for patients with at least $4,500 of unpaid debt. The policy walks through how to lock their electronic health records so that staff members cannot schedule future appointments.
"These are the poorest patients who have the most severe medical problems," said Matt Hoffman, an Allina primary care doctor in Vadnais Heights. "These are the patients that need our care the most."
Allina Health said it has a robust financial assistance program that in an average year helps more than 12,000 of its 1.9 million patients with medical bills. The hospital system cuts off patients only if they have racked up at least $1,500 of unpaid debt three separate times. It contacts them by phone and with repeated letters that include information about applying for financial help, said Conny Bergerson, a hospital spokesperson.
"Allina Health's goal is, and will always be, to have zero patients go without services for financial reasons," Bergerson said. She said that cutting off services was "rare" but declined to provide information on how often it happens.
Allina suspended its policy of cutting off patients in March 2020, at the onset of the coronavirus pandemic, before reinstating it in April 2021.
An estimated 100 million Americans have medical debts. Their bills make up about half of all outstanding debt in the country.
About 20% of hospitals nationwide have debt collection policies that allow them to cancel care, according to an investigation last year by KFF Health News. Many of those are nonprofits. The government does not track how often hospitals withhold care.
Under federal law, hospitals are required to treat everyone who comes to the emergency room, regardless of the person's ability to pay. But the law — called the Emergency Medical Treatment and Labor Act — is silent on how health systems should treat patients who need other kinds of lifesaving care, such as those with aggressive cancers or diabetes.
In 2020, thanks to its nonprofit status, Allina avoided roughly $266 million in state, local and federal taxes, according to the Lown Institute, a think tank that studies health care.
In exchange, the IRS requires Allina and thousands of other nonprofit hospital systems to benefit their local communities, including by providing free or reduced-cost care to patients with low incomes.
But the federal rules do not dictate how poor a patient needs to be to qualify for free care. In 2020, Allina spent less than half of 1% of its expenses on charity care, well below the nationwide average of about 2% for nonprofit hospitals, according to an analysis of hospital financial filings by Ge Bai, a professor at the Johns Hopkins Bloomberg School of Public Health.
Allina is one of Minnesota's largest health systems, having largely grown through acquisitions. Since 2013, its annual profits have ranged from $30 million to $380 million. Last year was the first in the past decade when it lost money, largely owing to investment losses.
The financial success has paid dividends. Allina's president earned $3.5 million in 2021, the most recent year for which data is available. The health system recently built a $12 million conference center.
Yet Allina sometimes plays hardball with patients. Doctors have become accustomed to seeing messages in the electronic medical record notifying them that a patient "will no longer be eligible to receive care" because of "unpaid medical balances."
Dr. Rita Raverty, a primary care doctor who works at an Allina clinic, said the notifications were alarming because they meant she could not provide continuous care for some of her patients facing a number of health risks.
"Nobody wins when patients can't get preventive care," Raverty said. "It creates worse disease outcomes when you're not catching things early."
Doctors and patients described being unable to complete medical forms that children needed to enroll in day care or show proof of vaccination for school.
Serena Gragert, who worked as a scheduler at an Allina clinic in Minneapolis until 2021, said the computer system simply wouldn't let her book appointments for some patients with outstanding balances.
Gragert and other Allina employees said some of the patients who were kicked out had incomes low enough to qualify for Medicaid, the federal-state insurance program for poor people. That also means those patients would be eligible for free care under Allina's own financial assistance policy — something many patients are unaware exists when they seek treatment.
Bergerson, the Allina spokesperson, did not dispute that but said the health system went "to tremendous lengths to assist patients with their financial obligations for medical care."
Allina employees said the policy has forced them to ration care.
Beth Gunhus, a pediatric nurse practitioner, recalled a case in which a mother brought in her three children. One had scabies, an intensely itchy skin condition caused by mites burrowing into the body. She wanted to follow best practices and treat the entire family, who were sharing one bed in a single room they rented, to ensure that the scabies didn't spread further. But she could write a prescription for only two of the children. The third's account was locked because of unpaid bills.
"There are so many better ways of saving money than what we're doing," Gunhus said.
Allina says the policy applies only to debts related to care provided by its clinics, not its hospitals. But patients said in interviews that they had been cut off after falling into debt for services they received at Allina's hospitals.
Because Allina is the dominant health system in some rural parts of Minnesota, getting kicked out can leave patients with few options.
Jennifer Blaido lives in Isanti, and Allina owns the only hospital there. Blaido, a mechanic, said she racked up nearly $200,000 in bills from a two-week stay at Allina's Mercy Hospital in 2009 for complications from pneumonia, along with several visits to the emergency department for asthma flare-ups. Blaido, a mother of four, said most of the hospital stay was not covered by her health insurance, and she was unable to scrounge together enough money to make a dent in the debt.
Last year, Blaido had a cancer scare and said she couldn't get an appointment with a doctor at Mercy Hospital. She had to drive more than an hour to be examined at a health system unconnected to Allina.
Allina does not make this policy explicit to patients. It is not mentioned in the health system's list of "frequently asked questions" about billing practices. In at least one case, Allina has denied that it even existed.
In a lawsuit filed last year in state court in Minnesota, Allina sued a couple, Jordan and JoLynda Anderson, for nearly $10,000 in unpaid medical bills.
In court filings, the couple described how Allina had canceled Anderson's appointments and told her that she could not book new ones until she had set up three separate payment plans — one with the health system and two with its debt collectors.
Even after those payment plans were set up, totaling $580 a month, the canceled appointments were never restored. Allina allows patients to come back only after they have paid the entire debt.
Anderson recalls being devastated about losing her visit to an endocrinologist who specialized in a chronic condition she has. She had already been waiting four months for the appointment and was unable to get a new one.
"It felt like I was being punished, and the punishment was you get to stay ill," she said.
Bergerson declined to comment on these cases, citing patient privacy.
When the Andersons asked in court for a copy of Allina's policy of barring patients with unpaid bills, the hospital's lawyers responded, "Allina does not have a written policy regarding the canceling of services or termination of scheduled and/or physician referral services or appointments for unpaid debts."
In fact, Allina's policy, which was created in 2006, instructs employees on how to do exactly that. Among other things, it tells staff to "cancel any future appointments the patient has scheduled at any clinic."
It does provide a few ways for patients to continue being seen despite their unpaid bills. One is by getting approved for a loan through the hospital. Another is by filing for bankruptcy.
Susan C. Beachy contributed research.