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The uproar over debt collection practices at Fairview Health Services hospitals in the Twin Cities intensified in St. Paul as U.S. Sen. Al Franken convened a field hearing at the state Capitol to listen to patients’ stories of being accosted by employees of Accretive Health Inc

Franken brings hospital debt collection hearing to state Capitol

Accretive execs contrite before U.S. Senate panel

U.S. Sen. Al Franken, who convened a field hearing at the state Capitol about the debt collection practices of Accretive Health Inc., said, “It seems to me there is a right way and a wrong way, and a right time and a wrong time, to do these things.” (Staff photos: Peter Bartz-Gallagher)

The uproar over debt collection practices at Fairview Health Services hospitals in the Twin Cities intensified in St. Paul last week.

U.S. Sen. Al Franken convened a field hearing at the state Capitol to listen to patients’ stories of being accosted by employees of Accretive Health Inc., a Chicago-based company that Fairview had hired to handle collections.

Tom Fuller of New Brighton, who had made frequent hospital visits because of complications from a lung transplant, told of how he was taken to a hospital room and informed that he had an outstanding balance even though he was current on his hospital bills.

Deb Waldin of Edina told the story of lying on a gurney at Fairview Southdale with pain from a kidney stone so bad that she was “wishing I could die.” Even though she owed no debt to Fairview, she was asked for more than $700 while waiting for a doctor in the emergency room.

These patients complained of the developing practice in the health care business of so-called point-of-service collections. Minnesota Attorney General Lori Swanson said a months-long investigation by her office showed Accretive employees were trying to extract cash or credit card payments from people like Fuller and Waldin who were either in pain, on medication, or both.

“Hitting up patients in their bedside gurney in various stages of undress, where they are hooked up to morphine drips or have feeding tubes shoved down their throats, is not the time and place to collect money,” Swanson said.

Accretive had criticized Swanson’s office in its initial reaction to the April 24 report. But Greg Kazarian, a senior vice president at Accretive, sounded a more contrite tone in front of Franken when he apologized for any actions that “lack compassion or professionalism.”

“We take seriously the allegations that have been raised by the attorney general and appreciate the opportunity to have this dialogue and set the record straight,” he said. “Let me be clear, many of the allegations we’ve heard this morning and in the press are deeply troubling. And if they are true, they would be flatly inconsistent with Accretive health policies, our training and our values.”

Swanson, whose office has the authority to investigate charitable organizations like nonprofit hospitals, said Accretive’s management contract “unduly incentivized the company to scorn the culture, mission and values of a charitable hospital.”

Fairview dumped Accretive earlier this year.

Mike Rothman, the commissioner of the Minnesota Department of Commerce, said his agency’s enforcement division investigated the allegations made by Swanson’s office, including claims that Accretive employees tried to “disguise” their role as collections agents. On Feb. 3, Rothman signed a cease-and-desist order that stopped their collections activity until they are found to be in compliance.

“I want to make it clear,” Rothman said, “that to the extent the evidence collected in our investigation substantiates these allegations, such allegations would represent a clear and troubling disregard for Minnesotans’ rights and a clear violation of Minnesota law.”

Franken queried testifiers on whether a conflict of interest exists when a nonprofit health care provider hands over business functions to a firm seeking profits. He made reference to an email from an Accretive call center employee that made disparaging remarks about people who owed money to hospitals.

“Does an email like this make you concerned about the culture in the call center?” Franken said. “I mean, if an employee works in a setting where he thinks it’s OK to send an email like this to his co-workers, doesn’t that mean you have a real problem on your hands?”

Kazarian responded that Accretive management actively monitors the calls.

The hearing also unveiled new information about problems with Accretive’s handling of private patient information. Swanson said. Accretive handled information for patients at North Memorial Hospital even though the company apparently didn’t have a business associate agreement with North Memorial as required by the federal Health Information Portability and Accountability Act (HIPAA).

She said Accretive “concocted” an agreement after her office inquired about its existence. Accretive later responded that an agreement had been in place but couldn’t be located when the attorney general’s office submitted its request. The issue is especially relevant because North Memorial and Fairview patients’ health information was put at risk when an employee’s laptop containing unencrypted information was stolen from his car.

“That’s a new thing that we just heard today,” Franken said of the alleged HIPAA violation. “It’s a pretty explosive charge.”

A recent Forbes article cited by Franken during the hearing said point-of-service collections have become increasingly common as health care companies try to minimize the bad debt they incur. The same article criticized Swanson for taking on Accretive. And Chicago Mayor Rahm Emanuel sent her a letter imploring her to back off.

With respect to the rising incidence of debt collectors working in health care settings, Franken said at one point, “I get it.” But he also said practices such as those alleged by Swanson cannot be permitted.
“It seems to me there is a right way and a wrong way, and a right time and a wrong time, to do these things,” Franken said.

While Accretive is in legal trouble with Minnesota regulators, it’s unclear whether their industry will experience any fallout in the legislative arena. At the federal level Jessica Curtis, project director at the Community Catalyst’s Hospital Accountability Project, told Franken that the billing standards adopted by hospitals in the early 2000s after a backlash regarding collection practices need to be revisited.
“Clearly more is needed to protect patients from hospital bills they simply cannot pay,” Curtis said.
University of Minnesota law professor Michele Goodwin testified that policymakers should consider the types of penalties that are handed down for violations of debt collection laws.

“Criminal law provides a very strong stick to protect” against cases such as this, Goodwin said.
Accretive doesn’t appear to have hired lobbyists in Minnesota, according to a search of the lobbyist registrations with the state Campaign Finance and Public Disclosure Board. Some lobbyists who attended the meeting representing clients other than Accretive said Minnesota’s debt collection laws are fairly strong and predicted that future medical debt collection issues will be played out in the enforcement arena.

State Rep. Diane Loeffler, DFL-Minneapolis, who attended the field hearing, told Capitol Report the overall policy goal should be to prevent medical care from being compromised by financial consolidations.
“It’s clear we have laws on the books that set forth our values,” Loeffler said. “But I think there’s a question as to whether they’re specific enough and whether there are the [necessary] enforcement mechanisms.”


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