Inside Allina Health's Failed Revenue Cycle Strategy, Formal Investigation

The health system is under investigation for allegations it was canceling appointments and "cutting off" patients with medical debt. What went wrong?

Revenue cycle leaders are under pressure to collect on their patient’s bills in order to help pad an organization’s bottom line, but a new investigation is pointing out that some organizations are going too far.

Allina Health, one of the largest non-profit health systems in Minnesota, was recently called out in a New York Times report alleging that it was canceling appointments and “cutting off” patients with medical debt.

The Times’ report has now prompted a formal investigation, announced last week, by Minnesota Attorney General Keith Ellison.

According to the Times, Allina Health allegedly refused to provide certain types of care for patients with, in some instances, only $1,500 in medical debt. Although Allina would provide emergency care, it had a written policy to deny other services until that debt was paid off, the Times said.

At the time of the Times' article publication, Allina Health CEO Lisa Shannon said it “will take a thoughtful pause on any new interruptions to non-emergent, outpatient clinic scheduling while we re-examine our policy.”

“Reducing barriers to care is central to our mission as a steward of community health, and we will carefully study additional ways to educate our teams about the extensive financial services available to patients experiencing financial barriers to care,” Shannon’s statement said.

Even though Allina’s policy was paused, Attorney General Ellison is not letting the health system off the hook.

“Allina is bound under the Hospital Agreement to refrain from oppressive billing practices and provide charity care when patients need and qualify for it, as all Minnesota hospitals are. Denying patients needed care on the basis of medical debt harms every Minnesotan, whether or not they are Allina patients,” Attorney General Ellison said in a statement this week.

“My office has heard from a good number of Allina patients who have shared their own upsetting stories of being denied care for this reason,” Attorney General Ellison said.

As hospitals and health systems battle to increase margins and improve efficiency to remain financially healthy, what can revenue cycle leaders do to stay afloat? Denying care is not it.

Revenue cycle leaders have been working for years to minimize the same patient payment challenges as Allina Health, albeit with better strategies.

One strategy we see time and time again? Placing more of a focus on the front end, usually through technology, to reduce the cost to collect on the back end.

In fact, this is a strategy that Augusta University Medical Center follows. The health system realized it was missing opportunities by not prioritizing pre-service and point-of-service payments, which led to a negative patient financial experience, collecting pennies on the dollar, and writing off bad debt.

“Patients are providers’ second largest payers, so collecting payment prior to or at the time of service is critical to the overall financial health of the organization and our ability to serve the community with quality care,” Sherri Creech, AVP of patient access services at Augusta University Medical Center, told HealthLeaders.

After implementing technology and establishing new staff trainings and protocols for payment collection, the system increased its point-of-service collections by 150%--thus reducing its patients’ amount owed after care.

“The team couldn’t believe how small changes every day, like collecting a copay, can add up over time and help that bottom line,” Creech said.

Editor's note: Following this article's publication, Allina Health sent an email to HealthLeaders stating the following: "We have determined there are opportunities to engage our clinical teams and technology differently to provide financial assistance resources for patients who need [financial] support. We will formally transition away from our policy that interrupted the scheduling of non-emergency, outpatient clinic care." -Allina Health PR.