Debt Collection Agency Accretive Health May Face Federal Investigation For 'Abusive' Tactics

A debt-collection agency that reportedly worked to obtain money owed by patients inside U.S. hospitals should be investigated by federal authorities, a California congressman has said.

Rep. Pete Stark, the senior Democrat on the subcommittee that oversees Medicare and other health care policies, has asked two federal health care agencies to look into the practices of Accretive Health, a debt-collection company that does business with dozens of U.S. hospitals. Stark's call for a federal intervention comes after The New York Times reported that the company sends its employees directly into hospitals to pressure patients for money.

"The debt collection tactics apparently being used by Accretive Health to get money from patients waiting to be seen by an ER doctor or recuperating in a hospital bed are abominable," Stark said in a news release. "This is corporate greed at its worst," he said.

"The article outlines abusive debt collection tactics undertaken by a hospital contractor; tactics that may be in violation of several federal laws," Stark wrote in a letter today to Marilyn Tavenner, the acting administrator of the Centers for Medicare and Medicaid Services, and to Daniel Levinson, the inspector general for the Department of Health and Human Service. Hospitals that hire Accretive Health allegedly allow debt collectors to work within the hospital in roles that include registering new patients, scheduling appointments and handling billing, the Times reported. Patients have been reportedly asked to pay upfront for emergency care, even though federal law requires hospitals to treat emergency room patients regardless of their ability to pay, according to the newspaper.

Hospitals were stuck with $39.3 billion in unpaid bills in 2010, which amounted to 5.6 percent of their total expenses, according to the American Hospital Association. The industry faces increasing financial pressure as health care costs escalate, as Medicare, Medicaid and private health insurance companies' payment rates grow smaller and as more Americans become uninsured or lack the means to pay for health care.

Accretive Health and two of its clients, Fairview Health Services and North Memorial Health Care, have come under scrutiny from the Minnesota attorney general Lori Swanson. Swanson sued Accretive Health in January after a company employee last year left a laptop containing the sensitive information of nearly 23,500 patients in a rental car.

Swanson also released a report this week detailing the practices used by Accretive Health employees to obtain payments from hospital patients.

This post has been updated to include further quotes from Stark and to indicate that Stark's letter was also sent to HHS.

Watch an interview with Nancy Mihalek of Burnsville, Minn., who says the debt-collection company tried to talk her out of surgery because she owed money, on WCCO, a CBS affiliate in Minnesota:

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