Attorney General Ellison reaches settlement with Mayo Clinic over charity care and debt-collection practices

Settlement requires Mayo Clinic to provide charity care to certain presumptively eligible patients and use a streamlined charity care application, and prohibits Mayo Clinic from suing patients to collect debt other than in exceptional circumstances

Attorney General also releases report detailing investigative findings and recommending legislative changes to strengthen charity care

March 14, 2025 (SAINT PAUL) — Minnesota Attorney General Keith Ellison announced today that his office has obtained a settlement with Mayo Clinic that requires Mayo to change its charity care and debt collection practices.  According to the terms of the settlement, Mayo Clinic must provide charity care to certain presumptively eligible patients and streamline their charity care application process. The settlement also prohibits Mayo Clinic from suing to collect medical debt in other than extraordinary circumstances. 

The settlement resolves the Attorney General’s investigation, announced in December 2022 after allegations reported in the Rochester Post-Bulletin that Mayo had sued patients who may have qualified for charity care to collect medical debt.  The Attorney General's investigation found that, among other things, Mayo Clinic's policies included barriers to patients' access to charity care and Mayo Clinic engaged in aggressive debt-collection practices in contravention of the Minnesota Hospital Agreement and its charitable mission and values. As a result of the investigation and Mayo’s cooperation with it, the percentage of Mayo’s operating expenses provided to charity care in 2024 rose to the highest level in more than five years. 

Along with the settlement agreement, the Attorney General published a report detailing his investigative findings and advocating for legislative changes to make charity care more accessible to Minnesotans. 

"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," said Attorney General Ellison. "My office investigated Mayo Clinic and discovered that they were actively dissuading certain patients from seeking charity care. While this is disappointing, I am heartened by the substantial improvements Mayo Clinic has made to their charity care program, and I am grateful for their cooperation with our investigation. The settlement I have reached with Mayo Clinic ensures their improved charity care policies and procedures will remain in place. Our investigation also revealed shortcomings in the charity care system generally, and I hope lawmakers will consider my office’s recommendations to address those shortcomings and help more Minnesotans get the care they need to be well.”

Charity Care and the Hospital Agreement

Charity care, otherwise known as financial assistance, means free or discounted health services to people who are unable to pay for all or a portion of the services. Under federal law, nonprofit hospitals like Mayo Clinic are required to provide charity care in exchange for their tax-exempt status. Hospitals have wide latitude in establishing their own eligibility criteria for charity care, and the law does not set a minimum requirement for charity care that hospitals must provide. As a result, the amount of charity care hospitals provide varies greatly.    

The Attorney General’s Office has long been concerned with medical-billing practices and has continuously taken steps to curb abusive collection practices. Since 2005, the Office has spearheaded what is known as the Hospital Agreement. The Hospital Agreement provides important protections to Minnesotans who receive healthcare services at Minnesota’s hospitals by protecting patients from abusive, harassing, and deceptive practices when hospitals seek to collect medical debt. 

The Hospital Agreement was most recently renewed in August 2022 for a period of five years. It covers all 128 nonprofit hospitals in Minnesota, including Mayo Clinic.

The Investigation

Under the Hospital Agreement, Minnesota hospitals must provide patients with reasonable opportunities to apply for charity care if there is reason to believe the patient may be eligible.  The Attorney General’s investigation found that Mayo failed to live up to its obligations under the Hospital Agreement and its charitable purpose by steering patients away from charity care, in some cases instructing its staff to avoid discussing charity care and instead ask patients to take out a loan or borrow from a family member to pay their medical bills. Mayo also maintained a burdensome charity care application that deterred otherwise eligible patients from seeking such care, engaged in overly aggressive debt collection practices, and delayed or denied medical care to patients with outstanding medical debt.  

As a result of the Attorney General’s investigation, Mayo Clinic has already taken significant steps to increase its patients’ access to charity care, expanding its process of assessing “presumptive eligibility” in which it qualifies certain patients as eligible for charity care without requiring them to complete an application. This change resulted in a significant increase in the amount of charity care Mayo has provided, bringing it to the highest level in more than five years and more than doubling the amount of charity care from 2022 to 2024.  

The Settlement

The settlement, filed in Ramsey County District Court, requires Mayo to maintain a charity care policy that provides free care to patients with incomes up to 200% of the federal poverty guidelines and between 40% to 50% discount for patients with incomes up to 400% of the federal poverty guidelines. The settlement also requires Mayo to screen certain patients to determine if they are presumptively eligible for charity care, and if so, provide the patients a discount in accordance with its charity care policies without requiring them to fill out an application. For patients who are not presumptively eligible, the settlement requires that Mayo use a streamlined application to reduce burden on patients.  Additionally, the settlement prohibits Mayo from suing patients to collect debt other than in exceptional circumstances and requires approval of Mayo’s CFO before filing any lawsuit. 

Recommended Legislative Reforms 

In addition to the investigative findings, the Attorney General’s investigation revealed that Minnesota’s regulatory framework was insufficient to ensure access to charity care and counter the crippling effects of medical debt, which impacts more than 20 million Americans and has devastating effects. 

In 2023, the Minnesota Legislature passed a bill codifying various aspects of the Hospital Agreement and requiring hospitals to screen uninsured patients and patients whose insurance status is unknown for eligibility for charity care. The legislature further addressed medical debt with the 2024 passage of the Minnesota Debt Fairness Act. In addition to other improvements, as of October 1, 2024, medical debt is no longer automatically transferred to one’s spouse, cannot be used to deny medically necessary care, and can no longer be reported to credit reporting agencies.    

While these protections and the protections of the Hospital Agreement go a long way toward addressing the problem of medical debt, there is more that can and should be done to prevent patients from incurring medical debt and mitigate the harm it causes. While certainly not an exclusive list, the report advocates for the following legislative changes to provide patients greater access to charity care:

• Expand presumptive eligibility to all patients, not just those who are uninsured or whose insurance status is unknown. This is the best way to ensure that patients who are eligible for charity care under a hospital’s policy are able to access the assistance.
• Provide an eligibility floor for charity care based on income. As the report details, hospitals establish their own eligibility criteria for charity care, meaning eligibility can vary by hospital, resulting in lack of access to charity care for certain patients. A basic eligibility floor (e.g., income at 200% of federal poverty guidelines) will improve consistency among hospitals and increase the amount of charity care provided.    
• Enact a uniform and simple charity care application. As the Attorney General’s investigation revealed, a burdensome charity care application results in patients who are otherwise eligible not receiving charity care, and potentially even facing harsh and unnecessary collection action. A uniform, simple application (and follow-up) would increase eligible patients’ ability to access charity care.    

Attorney General Ellison will be hosting a community forum in Rochester on Saturday, March 15 focused on issues like medical debt and federal overreach. Anyone interested in attending is encouraged to RSVP online at this link. The event’s location will be shared upon RSVP.

Attorney General Ellison encourages anyone who is struggling with medical debt to contact the Minnesota Attorney General’s Office by submitting a complaint form on the Attorney General’s website. The office can also be reached by calling (651) 296-3353 (Metro area) or (800) 657-3787 (Greater Minnesota).