Mayo Clinic Settles with Minnesota Attorney General Over Charity Care Practices

Minnesota Attorney General Keith Ellison announced a settlement with Mayo Clinic, addressing allegations that the nonprofit hospital system failed to meet its obligations to provide adequate charity care and engaged in aggressive debt-collection practices. The investigation, led by the Attorney General’s Office (AGO), concluded that Mayo Clinic created barriers for patients eligible for charity care, failed to fully honor its charitable mission, and violated the Minnesota Hospital Agreement.

The Allegations: Barriers to Charity Care and Aggressive Debt Collection

As a nonprofit hospital, Mayo Clinic enjoys substantial tax breaks in exchange for its presumed responsibility to serve its community, including providing charity care to patients unable to pay for services. However, according to the AGO’s findings, Mayo Clinic made it unduly difficult for eligible patients to access charity care.

One such patient, Roger Daniel from Mabel, Minnesota, detailed his experience. Homeless and uninsured at the time, Daniel sought emergency care for high blood pressure and enrolled in the state health insurance program, MNsure, to cover costs. While MNsure was expected to pay for follow-up cardiology appointments, Daniel was asked for a $2,000 deposit during a billing office call. This barrier discouraged him from continuing his care at Mayo Clinic, leaving him distrustful of their services.

The AGO’s investigation revealed that Mayo’s charity care practices deterred eligible patients in several ways:

1. A burdensome application process for financial assistance.
2. Instructions to staff to avoid discussing charity care and instead recommend loans or familial financial support.
3. Medical care delays or denials for patients with outstanding debts.
4. Suing patients who could not pay their medical bills—practices deemed inconsistent with Mayo’s charitable obligations.

Settlement Terms: A Commitment to Charity Care

Ellison lauded the settlement as a step forward for patients in Minnesota. “As a result of our investigation, Mayo Clinic provided more charity care in 2024 than in the last five years combined,” he stated. However, the agreement does not include financial penalties or require Mayo to make substantive policy changes. Instead, it validates policies Mayo already claims to have adopted.

In its statement, Mayo Clinic contested many of the AGO’s findings, describing them as “inaccurate, speculative, or irrelevant to applicable legal requirements.” The organization emphasized its longstanding commitment to charity care, citing its $600 million financial assistance contributions in Minnesota since 2019. Mayo also highlighted its recent adoption of “presumptive eligibility,” a practice allowing some qualifying patients to receive aid without completing an application.

While the settlement does not require new practices, Mayo agreed to continue policies it had voluntarily implemented before the AGO’s investigation. These include communicating the availability of financial assistance on its website, during registration, and in billing statements, as well as offering free financial counseling.

Broader Implications: The Charity Care Debate

This case has reignited broader discussions about the responsibilities of nonprofit hospitals and the adequacy of charity care programs. Critics argue that Mayo Clinic’s practices exemplify systemic issues, where nonprofit hospitals fail to meet their obligations while benefiting from tax exemptions. Attorney General Ellison underscored the need for legislative action, stating, “Our investigation revealed shortcomings in the charity care system generally, and I hope lawmakers will consider my office’s recommendations to help more Minnesotans get the care they need.”

Nonprofit hospitals, which account for nearly 60% of U.S. hospitals, receive approximately $28 billion in federal tax exemptions annually. Yet, studies suggest many underperform in providing charity care relative to their tax savings. Experts like Gary Young, a professor at Northeastern University, have called for stricter oversight. “The problem is that there’s no uniform standard for charity care, allowing some hospitals to fall short,” he stated.

Mayo Clinic’s Defense and Response

Mayo Clinic continues to defend its charity care efforts, highlighting its compliance with regulatory guidelines and its investments in patient financial support. “The settlement does not reflect a finding of wrongdoing,” Mayo asserted in its statement, emphasizing its voluntary adoption of practices that exceed legal requirements.

However, patient stories like Roger Daniel’s and findings from the AGO indicate that gaps remain. The public response has been mixed, with some praising Ellison’s leadership and others questioning whether the settlement goes far enough to hold Mayo accountable.

Accountability and the Need for Reform

While the settlement represents progress, it also exposes deeper issues in how nonprofit hospitals fulfill their community obligations. Mayo’s significant charity care contributions are commendable, but the barriers identified by the AGO suggest that even prominent institutions need stronger incentives—or penalties—to ensure equitable access to care.

This case also highlights the role of state and federal lawmakers in driving systemic reform. Establishing standardized guidelines for charity care could help eliminate disparities across nonprofit hospitals, ensuring that tax exemptions translate into tangible community benefits. Moreover, increased transparency in debt-collection practices is essential to rebuilding patient trust in healthcare institutions.

Ultimately, this settlement should serve as a wake-up call. Nonprofit hospitals must not only meet but exceed their obligations, putting patients’ well-being above financial considerations. Anything less risks further eroding public trust in institutions tasked with safeguarding community health.

Next Steps

Attorney General Ellison plans to attend a community forum in Rochester to discuss the settlement and its implications. His office has also indicated plans to propose legislative reforms aimed at addressing shortcomings in the charity care system.