Allina settles with Minn. AG over medical interest

Allina Hospitals and Clinics has agreed to reimburse more than $1 million in excess interest payments to its patients. It has also capped its interest rate on all future medical credit accounts at 8 percent.

The agreement settles a lawsuit filed in January by state Attorney General Lori Swanson.

The suit alleged that Allina violated the state's usury law by charging more than 8 percent interest on medical debt. In some cases the state says Allina's rate was as high as 18 percent.

Allina didn't acknowledge any wrongdoing in the settlement. President and CEO Ken Paulus said his organization settled the case because it would help patients.

"This is a time to give patients options, and it's a tough time for lots of folks. And we feel very good about where we landed in that respect," said Paulus. "We're giving patients an opportunity to finance health care in a much more creative way. And I think at a time when these options are necessary it's a good thing."

Allina will credit patients who paid higher interests rates on their medical debt going back to Jan. 22, 2007.