MN's AG Releases Scathing Report On Accretive Health Inc.

MINNEAPOLIS (WCCO) -- Imagine rushing to an emergency room, or recovering in a hospital bed, to be greeted a debt collector instead of a doctor. Marcia Newton said that happened to her when she took her 3-year-old son Max to surgery.

"As we were checking in Max at the hospital, one nurse was checking him in while the other was taking my credit card. And Fairview ended up overcharging me by about $600. It took months to get that money back," said Newton.

After a six month investigation, Minnesota Attorney General Lori Swanson released a six-volume report Tuesday, saying Accretive Health, a Chicago-based medical debt collection company contracted by Minneapolis-based Fairview Health Services, aggressively collected debt from patients and misused private patient information.

The case cracked open in July of 2011 when an Accretive executive had a laptop stolen from his car, containing the private medical information of 23,000 Minnesotans. Attorney General Lori Swanson says her investigation revealed a culture driven by sales instead providing a sanctuary for the sick.

"What we found was a profound culture clash between the mission of a charitable hospital, which is about patient dignity and patient care, and the mission of a for-profit debt collection enterprise which is about getting every last penny out of people's wallets," said Attorney General Swanson.

Swanson's office sorted through 100,000 documents as part of a pending lawsuit against Accretive, filed in January. Fairview signed a contract in 2010 to let Accretive run payment services, including debt collection, at its hospitals and clinics.

"So patients were treated like a figure on a balance sheet, the more they collected, the more money the shareholders of Accretive made," said Swanson, referring to what she called a Wall Street hedge fund or boiler room style sales approach. Her investigators determined that Accretive had a goal of cutting Fairview's costs by 25 percent, and ER costs by 20 percent, by whittling away at charity care for the poor.

She says the hospitals violated federal law, by handing Accretive sensitive records. In one case, Accretive debt collectors could see that a depressed man owing recently tried to commit suicide.

"You can imagine how a debt collector can use that to get leverage, knowing people's vulnerabilities, frailties, sensitivities," she said.

Swanson says Accretive embedded employees in hospital, so patients could not distinguish debt collectors from hospital staff in places like the emergency room. Internal company emails show Accretive established quotas on people collecting money in the emergency room, where employees were ranked and scored on how much they collected. Swanson also said patients were given a score based on their willingness to pay.

"Some of the things that go into that score are religion, gender, marital status," said Swanson. "Federal law says you are not supposed to use religion or whether or not you are married or gender to issue credit or collect debt."

A whistleblower complaint to the agency said "if we don't get money from patients in the ER, we will be fired." Internal communication also reveals pay incentives, bonuses and prizes like gift cards for employees who collected the most debt. In one instance, the winner could "throw a pie in a manager's face."

"Wearing the clown outfit, a Waldo outfit, I'll dress up like a turkey, I'll shave my head, if you can collect money," said Swanson, citing more examples of incentives offered by Accretive managers.

The report says employees at Fairview Ridges Hospital in Burnsville, were put into groups named after NFL teams to create a competition around raising money. Another executive said employees should put pressure on the OB Unit, writing, "We need to get cracking on labor and delivery, there's a good chunk of money to be collected there." Swanson says even the most fragile were asked to pay before treatment.

"Putting in place what are called stop lists for breast cancer patients, stopped and asked for money before proceeding on to treatment," she said.

An Accretive health spokesman responded to the Attorney General's allegation Tuesday, by offering this prepared statement, "We have a great track record of helping hospitals enhance their quality of care, for example, we have helped over 250-thousand patients get insurance coverage."

Accretive still has an active contract with North Memorial Hospital in Robbinsdale. Swanson told WCCO North Memorial has not been cooperative in the state's investigation and hasn't provided requested records.

But, CEO Larry Taylor responded to those concerns Tuesday, saying "North Memorial Health Care is working hard to cooperate with the Minnesota Attorney General's Office in its legal investigation of Accretive Health, Inc., a contracted vendor, adding that North Memorial voluntarily responded to the Attorney General's Office request for information in a matter as timely as possible.

Fairview responded by saying it takes the concerns raised by Minnesota Attorney General Lori Swanson seriously, and said last month the board of directors decided to end what is called revenue cycle work with Accretive Health.

"We have been in consultation with her on these issues for several months. We share many of her concerns and have already taken actions to address them. This was a decision we made in the best interests of our patients and our organization. It is critical that our business practices align with our values and comply with applicable laws and industry standards. Fairview is committed to protecting the privacy and dignity of its patients and to acting in their best interests. We continue to evaluate issues raised by the Attorney General and will take action as appropriate."

The Attorney General's Office says Accretive is contracted with 60 hospitals in 20 states, what they cite as an "uber collection agency" which outsources around half of its company to India.

Swanson says she will refer part of her case to other state and federal regulators, but currently won't bring charges or lawsuits against Fairview or North Memorial, in hopes the respective governing boards can remedy the problems.

"I'd rather money go back into patients rather than a fine because that would affect patient care," she said, adding that she'd like to see hospitals like Fairview returns to its own charitable values of "dignity, integrity, service, compassion."

"It's not consistent with the solemn place a hospital should be," she said.

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