State AG Sues Medical Collection Agency Over Privacy Issues

Minnesota Attorney General Lori Swanson announced Thursday that her office has filed a lawsuit against a debt collection agency that alleges the firm failed to protect the confidentiality of patient health care records.

In addition to the patient privacy complaints, Swanson levied some extraordinary allegations about the company’s business practices and its relationship with healthcare provider clients.

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“The debt collector found a way to essentially monetize portions of the revenue and health care delivery systems of some nonprofit hospitals for Wall Street investors, without the knowledge or consent of patients who have the right to know how their information is being used and to have it kept confidential,” said Attorney General Swanson. “Accretive showcases its activities to Wall Street investors but hides them from Minnesota patients.  Hospital patients should have at least the same amount of information about Accretive’s extensive role in their health care that Wall Street investors do.”

Swanson’s press release claims that on July 25, 2011, an employee of collection agency Accretive Health, Inc. left an unencrypted laptop containing sensitive information on 23,500 Minnesota patients of two Minnesota hospital systems — Fairview Health Services and North Memorial Health Care — in a rental car after 10 p.m. in the parking area of the Seven Corners bar and restaurant district of Minneapolis.  The laptop was stolen.

Swanson’s lawsuit includes a “screen shot” that Fairview sent to a Minnesota patient who requested to know the data about the patient that was on the laptop.  The screen shot has personal identity information, such as the patient’s name, address, date of birth, and Social Security number.  It also includes a checklist to denote whether the patient has 22 different chronic medical conditions and, if so, the condition of the patient. The screen shot also includes numeric scores to predict the “complexity” of the patient and the probability of an inpatient hospitalization, and a box to describe the “frailty” of the patient.

The lawsuit, filed in United States District Court in Minnesota, alleges that Accretive violated state and federal health privacy laws, state debt collection laws (although no specific examples are given), and state consumer protection laws.  It seeks an order requiring Accretive to fully disclose to patients: (1) what information it has about Minnesota patients; (2) what information it has lost about Minnesota patients; (3) where and to whom it has sent information about Minnesota patients; (4) the purposes for which it amasses and uses information about Minnesota patients.

Swanson also went to great lengths in the announcement to explain the corporate structure of Accretive and its investors, and ties to former ARM companies. But the attorney general made no allegations about wrongdoing in relation to the business structure.