Allina Hospitals & Clinics is fending off allegations by the Minnesota attorney general that the 11-hospital system and its subsidiary MedCredit Financial Services broke the states usury and consumer fraud laws. According to a lawsuit Attorney General Lori Swanson filed in Hennepin County District Court, Allina patients who declined to pay bills immediately or in three monthly installments could avoid having their accounts sent to collections if they agreed to pay 18% interest on balances up to $4,999 and 12% on balances from $5,000 to $9,999. Both rates were well in excess of the states 8% cap for medical debt. Allina officials were surprised by the lawsuit, the system said in a written statement, because MedCredit had already decided to switch to a flat 8% rate and communicated the change to Swansons office in December 2008. The statement went on to defend the abandoned sliding-scale rate structure as legal under state law because it qualified as open-ended credit extended on an ongoing basis for subsequent care. The lawsuit seeks an injunction against the alleged illegal practices and reimbursement for patients who were overcharged.
Late News: Minnesota sues Allina under usury, consumer fraud laws
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