Stevens Community Medical Center in Morris, Minn., has agreed to provide up to $1.4 million in refunds or medical debt reductions after the Minnesota attorney general alleged the hospital improperly calculated discounts for uninsured patients.
The settlement covers 3,478 patients who received services between April 1, 2020, and Dec. 31, 2025, and may have been entitled to larger discounts. To qualify for refunds or debt reductions, patients must verify that their household income was below $125,000 at the time of service.
The attorney general alleged that some patients were billed up to 20.5% more than permitted under Minnesota’s Hospital Agreement, which governs billing and medical debt collection practices at nonprofit hospitals.
From April 2020 through October 2023, the agreement required SCMC to give qualifying uninsured patients the same discount it provided its “most favored insurer,” or the nongovernmental payer that generated the most revenue for the hospital.
SCMC provided all uninsured patients, regardless of income, discounts ranging from 22% to 25%. During the attorney general’s investigation, the hospital determined it had used the wrong commercial insurer to calculate the required discount, which should have ranged from 41.5% to 44.7%.
As a result, 2,001 uninsured patients who received care during that period may qualify for an additional discount of 19.5% to 20.5%, subject to income verification.
A change in Minnesota law created a second issue. Beginning Nov. 1, 2023, hospitals were required to provide qualifying uninsured patients their highest private-insurer discount. SCMC continued using its previous methodology and provided all uninsured patients a 25% discount through the end of 2025. Qualifying patients should have received discounts ranging from 38% to 42.5%, according to the settlement.
Another 1,477 patients may therefore qualify for additional discounts of 13% to 17.5%. In total, potential refunds and debt reductions amount to $1.41 million.
SCMC neither admitted nor denied the attorney general’s allegations.
In an Aug. 14 statement provided to Becker’s, SCMC called the issue an “unintentional error” stemming from its use of the wrong commercial insurer’s discount percentage. The hospital said it first became aware of the issue in late 2025, corrected the calculation and implemented a new rate Jan. 1, 2026. The attorney general’s office began its investigation the following month, and SCMC cooperated with the investigation.
“SCMC works diligently to accommodate our patients regarding their financial concerns. We want people to focus on their health,” President and CEO Kerrie McEvilly said. She said SCMC has long provided immediate discounts to uninsured patients without income verification and will continue doing so.
Under the settlement, SCMC must notify affected patients about potential refunds or debt reductions and make reasonable efforts to provide relief as quickly as possible. The hospital must also report its remediation progress to the attorney general’s office and implement policies and training related to uninsured-patient billing requirements.
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