Allina Hospitals Settles Minnesota Interest Rate Charges, Will Reimburse Patients $1.1M

Main Category: Litigation / Medical Malpractice
Also Included In: Public Health
Article Date: 17 Apr 2009 - 6:00 PDT

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Allina Hospitals & Clinics will pay $1.1 million to patients who alleged the hospital group charged illegally high interest rates, the St. Paul Pioneer Press reports. The agreement was announced Tuesday to settle charges brought by the Minnesota Attorney General Lori Swanson (D). Swanson in January filed a lawsuit claiming the firm was charging interest rates as high as 18% in violation of state law that caps at 8% the interest rates hospitals can charge patients on medical debt. She said she is not sure how many people will be eligible for reimbursement but estimated that the number is in the thousands.

Allina on Feb. 1 placed an 8% cap on interest rates for all current and future accounts in its MedCredit billing program. Under the agreement announced Tuesday, Allina will repay patients for interest rate costs greater than 8% incurred from Jan. 22, 2007, to Jan. 31, 2009. Allina President and CEO Ken Paulus said the company admits no wrongdoing and described the 8% limit as competitive. He said, "We did some testing to see what the market charges for interest rates, and that appears to be what the market is." He added, "I think we probably agree to disagree on the contents of the lawsuit" (Snowbeck, St. Paul Pioneer Press, 4/15).

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