Minnesota Hospital to Provide Up to $1.4M in Medical-Debt Relief and Refunds
Minnesota Attorney General Keith Ellison has reached a settlement with Stevens Community Medical Center (SCMC) requiring the hospital to provide up to $1,412,776.25 in refunds or medical-debt reductions to eligible uninsured patients.
The settlement follows an investigation by the Minnesota Attorney General’s Office into allegations that SCMC improperly calculated discounts required under Minnesota law and a regulatory agreement governing hospital billing and debt collection practices.
According to the Attorney General’s Office, 3,478 patients who received services from April 1, 2020, through December 31, 2025, could potentially qualify for relief.
Settlement Addresses Uninsured Patient Discounts
The Attorney General’s Office alleged that SCMC incorrectly calculated discounts for uninsured patients with household incomes below $125,000.
The alleged practices violated requirements under Minnesota’s Hospital Agreement and, beginning in November 2023, state law governing the billing of uninsured patients.
According to the Attorney General, the incorrect calculations resulted in some uninsured patients being billed as much as 20.5% more than allowed under Minnesota law.
SCMC cooperated with the investigation and agreed to remedy the practices through the settlement.
Nearly 3,500 Patients Could Qualify
Under the agreement, SCMC must notify 3,478 patients who were billed for qualifying services during the covered period about the possibility of receiving additional discounts.
To qualify for a refund or reduction in outstanding medical debt, patients must verify that their household income was below $125,000 when they received services.
Eligible patients who have already paid amounts affected by the incorrect discount calculation may receive refunds. Those with outstanding balances may receive adjustments reducing their medical debt.
The amount of relief will depend on the discount each patient should have received under the requirements applicable when the services were provided.
Minnesota’s Hospital Agreement
The Attorney General’s investigation relied in part on the Hospital Agreement, a regulatory agreement between the Attorney General’s Office and Minnesota hospitals.
First established in 2005, the agreement is intended to protect patients from aggressive hospital billing and debt collection practices while establishing standards consistent with hospitals’ charitable obligations.
Among other areas, the agreement addresses uninsured patient discounts, charity care, reasonable payment plans, collection agency referrals, and medical-debt collection practices.
The Hospital Agreement was renewed in 2022 for another five-year term extending into 2027. The agreement covers Minnesota’s 133 nonprofit hospitals as well as its two for-profit hospital systems.
State Law Changed Discount Requirements in 2023
Before November 1, 2023, the Hospital Agreement required hospitals to provide qualifying uninsured patients with the same discount offered to their “most favored insurer,” the insurer generating the most revenue for the hospital.
That provision was superseded on November 1, 2023, by Minnesota Statutes Section 144.589.
Under the state law, hospitals must provide uninsured patients with household incomes below $125,000 the highest discount offered to any private insurer.
The SCMC settlement therefore calculates relief differently depending on when a patient received services. Discounts for services between April 1, 2020, and October 31, 2023, will be determined under the Hospital Agreement, while services from November 1, 2023, through December 31, 2025, will be evaluated under state law.
Previous Hospital Agreement Enforcement
The Attorney General’s Office has previously used the Hospital Agreement in enforcement actions involving other Minnesota hospitals.
In March 2025, the office reached a settlement with Mayo Clinic concerning its charity care and debt collection practices. The agreement required changes to Mayo’s charity-care procedures, including streamlined access for certain eligible patients, and restricted lawsuits seeking to collect medical debt except in extraordinary circumstances.
The Attorney General’s Office also reached a settlement with Hutchinson Hospital in October 2020 after alleging violations involving patient payment plans and debt collection practices.
That resolution ultimately resulted in $184,000 in patient debt forgiveness and gave certain patients an opportunity to receive a 40% discount on outstanding medical bills.
Minnesota Expands Medical-Debt Protections
The SCMC settlement comes as Minnesota has expanded protections for consumers with medical debt.
The Minnesota Debt Fairness Act, enacted in 2024, established several protections related to medical debt.
Among other provisions, medical debt can no longer be reported to credit bureaus, providers cannot withhold medically necessary care because of unpaid medical debt, and medical debt cannot be transferred to a patient’s spouse.
The law also established additional protections involving medical-debt collection practices.
What Comes Next
SCMC must now notify potentially affected patients and provide refunds or reductions in outstanding debt to those who establish their eligibility.
For uninsured patients who received services at SCMC during the covered period, eligibility will depend on household income at the time services were provided and the discount requirements then in effect.
The settlement reinforces Minnesota’s continued focus on hospital billing practices, medical-debt collection, and financial protections for uninsured patients.
