Healthcare News & Insights

Hospital debt collector settles lawsuit for $2.5 million

Remember Accretive Health, the former collection agency for Fairview Health Service, in Minnesota, which was being investigated for aggressive billing and collection practices? Well, its case has finally come to a close.

While admitting no wrongdoing, the medical debt collector has agreed to pay $2.5 million and leave the state of Minnesota to settle allegations that it violated the Emergency Medical Treatment and Active Labor Act (EMTALA) with its billing and collection practices in the emergency room.

It’s also barred for two years from contracting with any Minnesota hospitals and, after that, it has to get permission from the attorney general before setting up operations again in the state.

“A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families,” Attorney General Lori Swanson said in a press statement. “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.”

From the beginning

The lawsuit, which was filed in January by Swanson, actually was started to investigate potential privacy violations last October. A laptop containing data on more than 23,000 patients from Fairview Health Services and North Memorial Health Care was stolen from  an Accretive employee’s rental car.

During the investigation, the attorney general’s office learned of Accretive’s questionable collection practices in emergency rooms and widened its lawsuit.

According to the press statement, the attorney general’s office obtained sworn statements from about 60 patients to support the lawsuit. Two things most of them had in common was:

  • they were asked to pay money in the hospital emergency room before being treated. (Many said they were laying in a gurney, undressed, in pain or hooked up to tubes for medication), and
  • they had insurance.

Moving on

Of course Accretive Health sees things differently.

“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,” said Mary Tolan, CEO of Accretive Health, in a press statement. “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.”

She added that while Accretive believes it embraces industry best practice that are beneficial to their hospital partners, they are re-doubling their efforts to make sure patients and the privacy of patient data always comes first.


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