Accretive Health Settles Minnesota Debt Collection Lawsuit, Agrees to Pay Restitution, Cease Business in State

Accretive Health, the medical debt collector that recently drew fire for the heavy-handed methods it uses to collect hospital bills, has reached a settlement with the Minnesota attorney general.  According to the Minneapolis Star Tribune, Accretive Health has agreed to pay $2.5 million in restitution and will stop doing business in the state for at least two years to resolve charges that it deceived patients, harassed them in emergency rooms, and mishandled patient data while collecting bills for two Minnesota hospitals .

As we reported previously, Minnesota Attorney General Lori Swanson filed suit against Accretive in January, after a laptop containing information on more than 23,000 patients was stolen from the company.  In April, her office issued a report that slammed some of the tactics Accretive Health used to collect debt and payments on behalf of Fairview Health Services and North Memorial Hospital.  Among other things, Swanson described how Accretive debt collectors approached patients in hospital emergency rooms or at their bedsides and demanded that they pay outstanding bills or make point of service payments at that time. According to the report, the Accretive representatives “may discourage them (patients) from seeking emergency care at all, even using scripts like those in collection boiler room.”

The report sparked serious concerns that Accretive’s tactics might have violated state and federal privacy laws, as well as debt collection laws.  It also attracted the scrutiny of Sen. Al Franken (D-Minn.), a member of the Senate Health, Education, Labor and Pensions Committee, who held a hearing to examine Accretive’s debt collection practices in May.

Under the agreement reached with the Minnesota attorney general, Accretive will pay $2.5 million to a restitution fund.  According to the Star Tribune, the fund will be administered by a retired judge to compensate patients.  Accretive will also stop collecting for North Memorial Hospital (Fairview dropped Accretive in April).  The agreement was approved Monday by U.S. District Judge Richard Kyle in St. Paul.  In agreeing to the settlement, Accretive did not admit to any wrongdoing.

According to the Star Tribune, Swanson acknowledge during a news conference yesterday that the two-year ban on Accretive doing business in the state was probably unprecedented, but asserted the tough penalty was needed due to the severity of the case. Hospital emergency rooms, Swanson said “should be a solemn place, not a place for a financial shakedown of patients,”

Ann Johnson, an emergency room patient at Fairview Southdale who complained to Swanson’s office about Accretive’s tactics, told the Star Tribune she was pleased with the settlement.

“I would hate to see one more loved one have to go through this,” she said. “You are so vulnerable when you are in the emergency room.”

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