Minnesota Medical Debt Settlement Highlights Hospital Billing and Collection Requirements
Minnesota has secured another settlement involving hospital billing practices, requiring $171,800 in patient refunds and medical debt reductions. The agreement affects 323 uninsured patients and reinforces the state’s oversight of hospital financial assistance, billing and debt collection practices.
The Nov. 9 settlement announced by Minnesota Attorney General Keith Ellison follows an investigation into Hendricks Community Hospital Association, which allegedly miscalculated required discounts for uninsured patients with household incomes below $125,000.
According to the attorney general’s office, some patients were billed as much as 32.63% more than permitted under Minnesota law. The hospital agreed to provide financial relief to eligible patients who received services between Jan. 1, 2020, and June 30, 2026.
Minnesota Expands Oversight of Hospital Billing
Minnesota law requires hospitals to limit charges for qualifying uninsured patients based on the lowest total reimbursement available from nongovernmental insurers.
Under Minnesota Statute 144.589, hospitals cannot charge uninsured patients earning less than $125,000 annually more than the lowest total amount they would receive from a nongovernmental third-party payer for the same services.
The settlement also addresses barriers to financial assistance. Investigators raised concerns about the hospital’s charity care application, which included 53 financial questions and required extensive documentation, including tax returns, bank statements and pay stubs.
The hospital agreed to simplify its application process and directly notify eligible patients about refunds or debt reductions.
Medical Debt Enforcement Continues Across Minnesota
The agreement is the latest in a series of actions involving hospital billing and medical debt collection practices.
In August 2026, Minnesota reached a settlement with Stevens Community Medical Center requiring up to $1.4 million in refunds and medical debt reductions related to improperly calculated uninsured patient discounts.
A separate 2025 settlement with Mayo Clinic required changes to charity care procedures and restrictions on medical debt collection lawsuits.
These actions fall under Minnesota’s longstanding Hospital Agreement, which establishes requirements for hospital billing, payment plans, financial assistance and referrals to collection agencies.
Minnesota also strengthened consumer protections through its 2024 Debt Fairness Act, which prohibits medical debt credit reporting, restricts certain collection practices and prevents providers from withholding medically necessary care because of unpaid medical debt.
