Accretive Health, one of the nation’s largest collectors of medical debt, has agreed to pay $2.5 million to the Minnesota state attorney general’s office to settle accusations that it violated a federal law requiring hospitals to provide emergency care, even if patients cannot afford to pay.
The company has not admitted wrongdoing.
As part of the settlement, Accretive Health is also barred from contracting with hospitals within the state for at least two years, effectively ending its business at three Minnesota hospitals. For four years after that, the company will have to obtain permission from the attorney general before resuming business in the state.
In April, Lori Swanson, the Minnesota attorney general, disclosed hundreds of Accretive’s internal documents that outlined aggressive collection tactics, including embedding debt collectors in emergency rooms and pressuring patients to pay before receiving treatment.
In an interview this week, Swanson said “a hospital emergency room should be a sanctuary for the sick and wounded, not a hunting ground for collectors."
The settlement will end a civil suit against Accretive, which Swanson filed in January after a laptop with patient information was stolen, saying that the company had violated state and federal debt collection laws and patient privacy protections.
“Even though we believe the claims against us were either baseless or exaggerated, we have used this opportunity to carefully examine our own practices in order to ensure we are setting the very highest standards for our own performance and achieving the best possible outcomes for hospitals, patients and communities," Mary Tolan, Accretive Health’s chief executive, said in a statement.
The revelations in Minnesota have reverberated across the country because they raise concerns that such aggressive tactics have become widespread at hospitals.
Accretive Health contracts with some of the largest hospital systems in the country to help them recoup some money on the unpaid bills that have piled up during the financial crisis and the economic downturn.
Rep. Pete Stark, D-Calif., who is the highest ranking member of the House subcommittee that oversees Medicare and other health services, led an investigation in March into the company’s practices.
Hospitals have long hired outside collection agencies to pursue patients after they have left facilities.
But mounting financial pressures on health care providers have resulted in hospitals letting collection firms in the front door, turning over the management of their staffing, like patient registration and scheduling, along with their collection activities, according to Swanson.
Concerns are escalating that such that cozy relationships will threaten patient privacy and care, according to consume advocates.
Still, hospitals say that they are in a tough position. The more than 5,000 community hospitals in the United States provided $39.3 billion in uncompensated care — made up of unpaid patient debts or charity care — in 2010, up 16 percent from 2007, the American Hospital Association, a trade group said.
Accretive Health emails and internal training manuals, which came to light through the investigation, revealed that some employees were told to hound patients to pay outstanding bills and sometimes discouraged them from receiving care.
The company fostered a pressurized collection environment that sometimes included mandatory daily meetings at hospitals in Minnesota, according to interviews with current and former employees. Those employees who fell behind collection quotas were threatened with termination.
In some instances, the employees had access to a trove of confidential patient records, which they might have used while persuading patients to pay their overdue bills, a potential violation of federal privacy laws. Under the terms of the settlement, Accretive Health will be required to turn over all the data of Minnesota patients that it has collected.