MINNEAPOLIS, Minn. (Legal Newsline)-Minnesota Attorney General Lori Swanson on Thursday sued Allina Health System for charging patients with medical bills more than double the rate of interest allowed by state law.

In her lawsuit, the 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.

The lawsuit, filed in Hennepin County District Court, names as defendants Minneapolis-based Allina and Accounts Receivable LLC, the company's debt collection agency.

Allina presented patients with medical debts three payment options, which included spreading 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.

"The high cost of health care is one of the biggest financial obstacles faced by many Minnesota families," Swanson said. "Allina has dug a deeper financial hole for patients facing tough economic times by charging usurious interest rates."

In addition to violating state usury laws, Swanson alleges that in some case Allina failed to fully disclose interest rates charged.
Swanson asks that the court order the insurer to refund patients who were charged unlawful rates of interest.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.