WHAT HEELS: MN Hospital Engages In Usury
MN Attorney General Lori Swanson accused Allina Hospitals and Clinics of charging patients interest rates as high as 18 percent on medical debt – well above 8 percent cap allowed under state usury laws – and filed a lawsuit to force the Twin Cities' biggest hospital and clinic chain to give refunds to consumers, reports the Star Tribune:
Swanson said she wants Allina to reduce interest rates charged by its MedCredit Financial Services unit and make refunds to patients who were charged high rates in the past. She is also pursuing civil penalties of up to $25,000 per violation.
In a statement, Allina said it had earlier decided to reduce the interest rate on all current and future MedCredit accounts to 8 percent and told the attorney general of the decision last month. However, it maintained that its previous interest rates were "fully consistent with Minnesota law." …
Allina said that beginning Feb. 1, all accounts will be charged 8 percent interest. MedCredit, which has been around since 1988, has about 8,000 open accounts. …
Swanson's suit centers on the question of whether MedCredit constitutes an "open-ended credit" plan under Minnesota law, which would enable it to charge interest of up to 18 percent. Swanson says it doesn't, because it does not extend credit but merely services and collects debt for Allina. Allina says MedCredit is indeed "open-ended credit," because patients can continue to use the program for subsequent care.
Editorial Note:The interest rate Allina was charging patients exceeds the 14 percent interest rate that Mexican robber baron Carlos Slim is extracting from The New York Times for his $250 million investment to keep the Grey Lady on life support. The prime lending rate is currently 3.25 percent.
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