Accretive Health Debt Collector Defends Embedding Employees Inside Hospitals

Accretive Health, a debt-collection company under fire from Minnesota and federal officials for aggressive tactics to squeeze money from hospital patients, is striking back at critics.

In a rebuttal to accusations made by Minnesota Attorney General Lori Swanson (D), Accretive Health flatly denied it has violated federal or Minnesota laws governing debt collection and patient privacy and said its role in hospitals is to help patients find ways to pay for their medical care. "We are proud of what we do," the company said in 29-page report issued Friday evening. "Patients appreciate the education, expertise, and compassion that we provide."

Accretive Health has been battered in Minnesota, Washington, and on Wall Street since Swanson published a six-volume report on her website last month alleging that the Chicago-based company demanded that emergency room patients pay before receiving medical care, that collectors visited patients' bedsides asking for money, and that collectors employed harsh and deceptive tactics. Democratic lawmakers and federal agencies have made inquiries and Accretive Health shares lost more than half their value before rebounding after the company reported positive earnings Thursday.

The Friday report is the latest salvo in Accretive Health's counteroffensive. A week ago, Chicago Mayor Rahm Emanuel (D), an ex-congressman and President Barack Obama's former White House chief of staff, came to the defense of the company , asking Swanson to ease off. Accretive Health hired well-connected Washington lobbyist Heather Podesta to "educate policymakers" about its services, according to a disclosure form filed with the Senate in March. In addition, Accretive Health has engaged a crisis public relations firm and its attorneys have hinted that the company may sue Swanson.

Accretive Health acknowledged that its employees or those of hospitals operated by Fairview Health Services in Minnesota spoke to nearly every patient about money during the appointment-making process, at registration, or in their hospital rooms. But the company said Swanson misrepresents these discussions. Emergency room patients were screened and stabilized first and no one was denied care, the company said. Accretive Health said the consultations have resulted in more than 250,000 people obtaining health coverage since 2003.

Swanson characterized these activities differently and said patients were made to think they wouldn't be treated if they didn't pay, which would violate federal law. Her reports alleged Accretive Health employees and hospital staff routinely badgered patients because they were under pressure from managers to collect the most money and were rebuked when they failed to meet targets.

Accretive Health also failed to protect confidential patient information, Swanson said. The attorney general sued Accretive Health in January over a case in which an employee's laptop computer, which contained information about more than 23,000 patients, was stolen from a parked car. Employees of Accretive Health's Medical Financial Solutions division also threatened to report patients to credit agencies, which isn't permitted, the attorney general said. The New York Times first reported Swanson's allegations.

The company may seek to contract the debt-collection work among the most criticized to other firms, Accretive Health CEO Mary Tolan said during a conference call with investors Wednesday.

Neither Friday's report nor any change in Accretive Health's business model is likely to end the controversy as federal agencies and lawmakers have taken an interest.

The Department of Health and Human Services, the Federal Trade Commission, Sen. Al Franken (D-Minn.), and Rep. Henry Waxman (D-Calif.) have joined Swanson in questioning whether Accretive Health goes too far in efforts to make sure hospital clients get paid. Accretive Health's report is in response to questions from Franken, who has scheduled a Senate committee hearing in St. Paul on May 30.

"It seems to me a new, aggressive way of approaching patients," Waxman said. "This is part of an ongoing concern we've had about hospitals charging more to uninsured patients." The federal health care reform law says nonprofit hospitals can only charge uninsured people the "amounts generally billed to individuals who have insurance," according to the Internal Revenue Service. Minnesota law requires hospitals to charge uninsured people the same rate as the insurance company that covers the largest number of their patients, Swanson's reports said.

Investigators from the federal Centers for Medicare and Medicaid Services visited one of Fairview's hospitals last week to follow up on Swanson's report, the St. Paul Pioneer Press reported Friday.

The head of that agency, Marilyn Tavenner, wrote hospital industry groups this week to remind them of their obligations to patients and federal law. "We would have serious concerns with the legality of any hospital policy or procedure that may discourage individuals from seeking emergency care," Tavenner wrote to the American Hospital Association, the Federation of American Hospitals, and the Association of American Medical Colleges on Wednesday.

The Federal Trade Commission in March began looking into whether Accretive Health has violated federal debt-collection and credit-reporting laws, the company disclosed in its quarterly report Wednesday.

The American Hospital Association revised its guidelines on hospital billing and collection practices last week in response to the controversy surrounding Accretive Health and to incorporate new requirements from health care reform. "America’s hospitals are committed to doing everything possible to better serve patients and to treat them equitably, with dignity, compassion and respect from the bedside to the billing office," the document said. "Hospitals exist to serve. Their ability to serve well requires a relationship with their communities built on trust and compassion."