Minnesota Attorney general, Lori Swanson, recently revealed that Accretive Health, one of the nation’s largest collectors of medical debts, is using possibly illegal tactics to collect debts. Concerns are being raised that these practices have become common at hospitals throughout the nation.
Debt collectors with access to patients health information, a possible violation of federal privacy laws, are demanding that outstanding bills be paid before treatment is received and in some cases even discouraging people from seeking care at all. The collection agents even use scripts like those in collection boiler rooms, according to hundreds of company documents and employees interviewed by The New York Times.
Accretive employees may have also broken the law by not clearly identifying themselves as debt collectors.
Accretive Health has contracts with some of the largest hospital systems in the country, including Henry Ford Health System in Michigan and Intermountain Healthcare in Utah.
Regulators in Illinois, where Accretive is based, are watching the developments closely, according to Sue Hofer, a spokeswoman with the State Department of Financial and Professional Regulation.
“I have every reason to believe that what they are doing in Minnesota is simply company practice,” Ms. Swanson said in an interview.
In January, she filed a civil suit against Accretive after a laptop with patient information was stolen, saying that the company had violated state and federal debt collection laws and patient privacy protections. That action is still pending.
An Accretive spokeswoman issued a brief statement, “We have a great track record of helping hospitals enhance their quality of care.” The company said it was cooperating with the attorney general to resolve the issues in Minnesota.
Hospitals have hired outside collection agencies to pursue patients in the past, but financial pressures are altering the collection landscape. Instead of pursuing debt after an individual has left the hospital, they are now letting collection firms in the front door, according to Don May, the policy adviser for the American Hospital Association, a trade group.
In 2010 more than 5,000 community hospitals in the United States provided $39.3 billion in uncompensated care, mostly in unpaid patient debts or charity care, up 16 percent from 2007.
Accretive is one of the few companies specializing in hospital debt collection that is publicly traded. Last year, it reported $29.2 million in profit, up 130 percent from a year earlier.
The company trains its staff to focus on getting payment through “revenue cycle operations.” Employees work under a pressurized collection environment that includes mandatory daily meetings at the hospitals in Minnesota and rewards for high collection tallies. Those who fell behind are threatened with termination.
“We’ve started firing people that aren’t getting with the program,” a member of Accretive’s staff wrote in an e-mail to his bosses in September 2010.
In July 2010, a manager told staff members at Fairview that they should “get cracking on labor and delivery,” since there is a “good chunk to be collected there,” according to company e-mails.
Patients with outstanding balances are closely tracked and added to a “stop list” by Accretive staff members.
In March 2011, doctors at Fairview complained that the collection agents strong-arm tactics were driving away patients that needed lifesaving treatments, but company officials dismissed the complaints as “country club talk,”.
Federal law requires hospitals to provide emergency health care regardless of citizenship, legal status or ability to pay.
Accretive recently announced it won a contract to provide “revenue cycle operations” for Catholic Health East, which has hospitals in 11 states.