Allina Hospitals & Clinics decries AG's lawsuit

Chris Rizo Jan. 23, 2009, 11:56am

Lori Swanson (D)

MINNEAPOLIS, Minn. (Legal Newsline)-Allina Hospitals & Clinics says a lawsuit filed this week by Minnesota Attorney General Lori Swanson against the company is without merit.

In her lawsuit filed Thursday, Swanson, a Democrat, alleged that Allina is violating state usury laws by charging interest rates of up to 18 percent to patients with bills to the company. The attorney general's office said there is a cap of 8 percent interest on such debts.

"Allina believes the allegations contained in the complaint are without merit," a company statement said. "Allina looks forward to discussing this matter further with the attorney general, and bringing it to a timely resolution."

The lawsuit names as defendants Minneapolis-based Allina and Accounts Receivable LLC, the company's debt collection agency.

Allina allows patients with medical debts to spread payments over time through its MedCredit subsidiary.

MedCredit charges interest of 18 percent on debts up to $4,999 and 12 percent on debts from $5,000 up to $9,999, the lawsuit says.

Allina said Friday that it was surprised by the attorney general's lawsuit since the company had decided on its own to reduce the interest rate on all current and future MedCredit accounts to 8 percent.

The company's statement says it told the attorney general's office of the change in December.

"While Allina believes the new rate of 8 percent is appropriate going forward, it should be noted that the previous rate structure, which included a sliding interest rate scale based on the balance due, was fully consistent with Minnesota law, and was clearly communicated to all patients who participated in the program," the statement said.

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