Medical debt collector to pay $ 2.5 million settlement

Accretive Health, one of the nation’s largest medical debt collectors, has agreed to pay the Minnesota state attorney general’s office $ 2.5 million to settle charges that it violated a federal law requiring hospitals to provide emergency care even if patients cannot afford to pay.

The company did not admit any wrongdoing.

As part of Monday’s settlement, Accretive Health is also barred from contracting with state hospitals for at least two years, ending operations at three hospitals in Minnesota. For four years after that, the company will have obtain authorization from the Attorney General before resuming business in the state.

In April, Lori Swanson, Attorney General for Minnesota, disclosed hundreds of internal Accretive documents that describes aggressive collection tacticsincluding bringing debt collectors into emergency rooms and pressuring patients to pay before receiving treatment.

Carol Wall, a 53-year-old resident of Minnesota, said that “a woman with a computer cart” told her she owed $ 300 because she “had a vaginal hemorrhage from large amounts of blood” in a bathroom. Emergency affiliated with Accretive in January, according to court records.

Another patient, Terry Mackel, 50, said he was asked to pay $ 363.55 at another Accretive-affiliated emergency room in Minnesota as he waited “alone, groggy and on an IV. “while waiting to see an emergency doctor, according to court documents. Fearing that this would be the only way to see a doctor, both patients paid.

Accretive Health declined to comment on Ms. Wall and Mr. Mackel. “The conduct described by these patients is directly contrary to the policies, practices and training of Accretive Health,” said Accretive. said in a press release.

In an interview on Monday, Ms Swanson said “a hospital emergency room should be a sanctuary for the sick and injured, not a hunting ground for collectors.” The settlement will end a civil action against Accretive, which Ms Swanson filed in January after a laptop computer with patient information was stolen, claiming the company violated federal and state debt collection laws and the protection of patient privacy.

“Even though we believe the allegations against us were unfounded or exaggerated, we have taken this opportunity to carefully review our own practices to ensure that we are setting the highest standards for our own performance and achieving the best possible results. hospitals, patients and communities, ”said Mary Tolan, executive director of Accretive Health, in a statement.

The revelations in Minnesota have reverberated across the country as they raise concerns that such aggressive tactics have become widespread in hospitals. Accretive Health contracts with some of the largest hospital systems in the country to help them recover money from unpaid bills that piled up during the financial crisis and economic downturn.

Regulators in Illinois, where Accretive is based, have been monitoring developments closely, according to Sue Hofer, a spokesperson for the State Department for Financial and Professional Regulation.

Pete Stark, the California Democrat who is the most senior member of the House subcommittee that oversees Medicare and other health services, investigated the company’s practices in March .

Hospitals have long hired outpatient collection agencies to sue patients after they receive care. But growing financial pressures have led hospitals to let in collection companies, outsourcing management of their staff, such as patient registration and scheduling, as well as their collection activities, according to Ms Swanson.

Concerns are growing that such intimate relationships threaten patient privacy and care, according to consumer advocates.

Yet hospitals say they are in a difficult position. The more than 5,000 community hospitals in the United States provided $ 39.3 billion in unpaid care – comprised of unpaid patient debt or charitable care – in 2010, up 16% from 2007, said the American Hospital Association, a trade group.

Accretive Health emails and internal training manuals, which came to light during the investigation, revealed that some Accretive employees were asked to harass patients to pay unpaid bills and at times have them. discouraged from receiving care.

The company has fostered a pressurized collection environment, according to interviews with current and former employees. Employees who did not meet collection quotas were threatened with dismissal.

“We have started firing people who don’t agree with the program,” wrote an Accretive staff member in an email to her bosses in September 2010.

In some cases, employees had access to a wealth of confidential patient records, which they could have used to persuade patients to pay their overdue bills, a potential violation of federal privacy laws. Under the terms of the settlement, Accretive Health will be required to turn over any Minnesota patient data it has collected.

Shares of Accretive Health closed on Monday ahead of the settlement announcement at $ 10.01, down 4%. Since Ms Swanson released the internal documents in April, Accretive shares have fallen 46%. Investors in the late afternoon seemed happy to see the prosecution and investigation resolved, pushing shares up 23% in after-hours trading.

Rosemary S. Bishop