Accretive Settles Minnesota Suit for $2.5M, Agrees to Leave State

Accretive Health ended its months-long public legal battle with the Minnesota Attorney General over its health facility debt collection practices, agreeing to pay $2,490,400 in a settlement without admitting any wrongdoing.

The company also agreed to cease its healthcare revenue cycle consulting services practice in Minnesota for two years. The company had contracts with Fairview Health and North Memorial, companies which operate hospitals and clinics in the state.

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“Entering into this settlement agreement allows our company to put this matter behind us and prevents further distraction from the important work that we do for our hospital clients,” Accretive CEO Mary Tolan said in a statement. “Even though we believe the claims against us were either baseless or exaggerated, we have used this opportunity to carefully examine our own practices in order to ensure we are setting the very highest standards for our own performance and achieving the best possible outcomes for hospitals, patients and communities.”

The attorney general’s office had accused Accretive of conducting high-pressure collection tactics at Fairview, including in the emergency room. “A hospital emergency room is a high-stress place,” Attorney General Lori Swanson said Monday at a press conference. “It should be a solemn place, not a place to shake down patients for money. It’s good to close the door for Minnesota on this really disturbing chapter in our healthcare history.”

The Settlement

Under the settlement, Accretive has agreed:

  • To pay nearly $2.5 million, from which any restitution to patients will be paid, and the remainder to go into the Minnesota state treasury;
  • To quit its revenue cycle consulting practice in Minnesota within 90 days, and should it decide to reenter the state for four years after that period, will only do so by first entering into a consent decree with the attorney general’s office;
  • To destroy or return all health and financial information pertaining Minnesota patients, and to hire an independent consultant to certify that it has done so.

North Memorial yesterday announced that it had reached an agreement with Accretive to end its business relationship by August, according to an Associated Press report, and that this agreement had been finalized before Accretive’s settlement with the attorney general. “North Memorial’s experience with Accretive was different than what was depicted in news stories about other hospitals and from the beginning of the relationship, North Memorial maintained management oversight of its revenue cycle, staff and policies,” the healthcare organization wrote in a statement.

How It Began

The legal battle with Accretive began in January when Swanson sued Accretive for failing to protect confidential patient data after an Accretive employee had a laptop stolen the previous July that contained unencrypted patient records from Fairview and North Memorial. The complaint also charged the company with violations of state debt collection laws. Accretive denied all allegations

In April the attorney general’s office released a 6-volume “compliance review” that contained allegations that during the period Fairview had contracted Accretive to manage its revenue cycle, Accretive had employed high-pressure debt collection tactics to increase point-of-service collections. Again, Accretive denied the allegations.

Collection agencies are regulated by the Minnesota Department of Commerce, which slapped a cease and desist order on Accretive. Commerce Commissioner Mike Rothman issued a statement yesterday, writing, “Today’s settlement attempts to rectify the damages inflicted on Minnesota consumers who were deceived, lured into a false sense of security, and then taken advantage of. But no amount of restitution can repair the damage done to the trust and confidence of thousands of Minnesota patients who were subject to predatory collection practices at their most vulnerable moments.” Rothman also said the alleged collection tactics “were illegal and unconscionable.”

The compliance review report prompted Sen. Al Franken (D-Minn.) to conduct a field hearing to investigate the attorney general’s allegations. Last month he filed two bills seeking to bolster protection of patient data and curbing certain collection practices relating to healthcare debt.

Additional resources:

The attorney general’s statement on the settlement (via the New York Times).

Accretive Health’s statement.

Minnesota Commerce Commission statement.