Settlement kicks Accretive Health out of Minnesota

John O'Brien Jul. 31, 2012, 1:13pm


MINNEAPOLIS (Legal Newsline) - Health care debt collector Accretive Health will stop doing business in Minnesota for at least two years.

The company settled state Attorney General Lori Swanson's lawsuit against it on Monday and must stop all business operations in the state by Nov. 1. After two years, it may re-enter the state with the permission of the Attorney General's Office.

Swanson's initial complaint, filed in January, alleged the company failed to protect patient health care confidentiality. In April, she released a report that alleged the company may have broken the law by asking patients to pay their bills as they sought care.

The report prompted a stock plunge and shareholder lawsuits. Her proposed second amended complaint added the report's allegations to her lawsuit.

"A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown of patients. It is good to close the door on this disturbing chapter in Minnesota health care," Swanson said.

The company will also pay a $2.5 million penalty to the State. It will be part of a restitution fund, and remaining funds will be given to the state treasury.

Swanson says state law forbids debt collectors to imply or suggest medical care will be withheld in an emergency situation when collecting on a bill.

Swanson provided the court with stories from several individuals who claim Accretive did just that. Those testimonials allege a woman from Accretive demanded payment while the patients were receiving emergency care.

The woman allegedly gave the impression care would be withheld if payment was not collected. Seventeen affidavits in support of Swanson's motion were filed with it.

Swanson also alleges Accretive overbilled patients using its own software program, known as A2A.

Accretive's stock plunged 42 percent (to $10.86 per share) shortly after Swanson issued her report in April. As of Tuesday, it was trading at 13.68 per share.

Swanson's probe began when an Accretive employee allegedly lost a laptop that contained the unencrypted health data of approximately 23,500 patients in Minnesota, including patients of Fairview.

Swanson's lawsuit alleges that Accretive gained access to patient data that was sensitive through contracts with the hospitals and used a numerical score to determine patients' risk of hospitalization and medical complexity. The lawsuit also alleges that the company graded patients' "frailty," compiled per-patient loss and profit reports and identified patients that were deemed "outliers."

Pending was the company's motion to dismiss Swanson's lawsuit.

"The suggestion that our focus or practice is to put bedside pressure on patients to pay their medical bills out of pocket is a flagrant distortion of fact," a statement released in April by the company says.

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