Mayo Clinic's chief executive is expressing regret over his choice of words in a recent speech that raised concerns among Minnesota regulators that the Rochester-based health system might make it harder for publicly funded Medicaid patients to receive care.

Dr. John Noseworthy said in a written statement released Friday that Mayo would continue to serve Medicaid patients, despite low reimbursement rates paid by the government program, and despite a speech late last year in which he indicated that Mayo would give priority to privately insured patients over publicly funded patients with equivalent conditions.

"In an internal discussion, I used the word 'prioritized' and I regret this has caused concerns that Mayo Clinic will not serve patients with government insurance," Noseworthy said. "Nothing could be further from the truth. In fact, about half of the total services we provide are for patients who have government insurance, and we're committed to serving those patients."

At the same time, Noseworthy said the financing of American health care has reached a point that requires difficult decisions.

"Changing demographics, aging of Americans and budgetary pressures at state and federal government pose challenges to the fiscal sustainability in health care today," the statement said. "While these discussions are uncomfortable, they are critical for us to be able to meet the needs of all of our patients."

In a videotaped speech to staff late last year, Noseworthy indicated that Mayo had reached a "tipping point" at which the growth in the number of its Medicaid patients jeopardized its ability to pay staff and maintain its substantial clinical and research agenda.

Medicaid covers low-income and disabled Minnesotans but reimburses clinics and hospitals at a rate below the cost of providing care, so hospitals typically rely on income from privately insured patients to balance their budgets.

In the speech, Noseworthy said Mayo gives first priority to patients with severe medical needs that Mayo could uniquely address, and second priority to patients who were employees or were sent to Mayo by "frequent referrers" or alums of the health system.

"But we're asking, [in] the third consideration, is if the patient has commercial insurance, or they're Medicaid or Medicare patients and they're equal, that we prioritize the commercial insured patients enough so we can make that shift so we can be financially strong at the end of the year to continue to advance, advance our mission," he said, according to a recording of the talk reviewed by the Star Tribune.

Health officials in Minnesota expressed surprise over the statement — with some expressing a belief that the practice occurred quietly in hospitals throughout the state but that hospital leaders never talked openly about it.

State Human Services Commissioner Emily Piper, who oversees the federal-state Medicaid program, said her department would be checking to make sure Mayo wasn't violating patients' civil rights or any conditions of its Medicaid contracts with the state.

Noseworthy's latest statement didn't address any specific policy of prioritizing privately insured patients, but he stressed that "patient medical need will always be the primary factor in determining and setting an appointment."

Minnesota has added more than 300,000 people to its Medicaid programs over the last three years, due in part to expanded eligibility rules under the federal Affordable Care Act. While this reduced the number of uninsured patients receiving free care, hospital officials across the state nonetheless have bemoaned the financial ramifications of treating a greater mix of Medicaid patients.

Jeremy Olson • 612-673-7744