Minn. settles suit over hospital debt collections

[July 31, 2012]  ST. PAUL, Minn. (AP) -- Attorney General Lori Swanson announced a legal settlement Monday that will bar a Chicago medical revenue company from doing business in Minnesota for six years after she accused Accretive Health Inc. of intrusive efforts to collect money from patients in several hospitals.

The settlement requires Accretive to stop operations in Minnesota by November. Accretive will be banned for two years outright and another four years after that unless the attorney general approves.

Accretive also will pay $2.5 million to set up a restitution fund for patients and return patient data to its client hospitals in the state, which include Fairview Health Systems hospitals, North Memorial Health Care and Maple Grove Hospital. Fairview terminated its contract with Accretive in April.

Swanson sued Accretive in January, alleging violations of health privacy, debt collection and consumer protection laws. Her lawsuit contained dozens of stories from patients who said they were pressured to pay while incapacitated by pain and waiting for medical care. Most had health insurance. Swanson's investigation stemmed from the theft of an unencrypted laptop containing private information for 23,500 patients out of an Accretive employee's car.

"It's good to close the door on this disturbing chapter in Minnesota health care," Swanson said.

Accretive said in a statement that the settlement allows the company to move on without admitting liability or wrongdoing, but it will cost more than 100 jobs in Minnesota.

"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," Chief Executive Officer Mary Tolan said in the statement.

The company works with hospitals to maximize revenue, including efforts to enroll qualified patients in health insurance. Accretive also said it has improved its encryption of laptops after firing the employee who left the unencrypted laptop in his car.

U.S. District Richard Kyle of St. Paul approved the settlement Monday.

In its statement, Accretive said Swanson's investigation "did not and could not identify a single patient" in Minnesota who had a bad experience with an Accretive employee or alleged they were denied care.

Joe Anthony, a Minneapolis attorney representing Accretive, accused Swanson of putting pressure on the company for political gain.

"She turned it into a media circus," Anthony said Monday in a telephone interview.

In a report last April, Swanson's office said Accretive professionals created a high-pressure atmosphere in which employees were coached to get payment from patients before treatment was given.

Any money left over from the restitution fund required by the settlement will go to the state treasury.

Swanson said she has also referred the affidavits from patients to the U.S. Centers for Medicare and Medicaid Services, which enforces a federal law requiring hospitals to treat emergency patients before seeking payment.

Commerce Commissioner Mike Rothman, who issued a cease and desist order against Accretive in February, said the state won't tolerate improper efforts to collect medical debt.

"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," he said in a statement.

[Associated Press; By MARTIGA LOHN]

Associated Press writer Jeff Baenen contributed to this report from Minneapolis.

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