One of the nation's largest medical collection agencies allegedly placed employees in emergency rooms, cancer wards and delivery rooms to extract payments from patients before they were seen by medical staff, according to a report released Tuesday by Minnesota Attorney General Lori Swanson's office.

Chicago-based Accretive Health Inc., according to the attorney general's investigation, provided lengthy scripts that employees were told to follow to get credit card charges or cash payments before treatment at Fairview Health Services' network of seven hospitals.

Accretive employees - indistinguishable from medical staff members - registered patients, recorded sensitive health information and championed aggressive collection goals with incentives such as gift cards, the company records revealed. The collection efforts targeted projected co-pays and deductibles for that day's visit or unpaid balances from previous treatments.

Fairview Health Services, based in Minnesota, dropped Accretive as a collector and revenue stream manager under a contract concession. In a filing with the Securities and Exchange Commission, Accretive said the change was aimed at resolving "outstanding issues with the Minnesota Attorney General.''

A review of Fairview's management contracts with Accretive found that the company imposed "boiler-room-style sales atmospheres'' at Fairview's seven hospitals using collection quotas, cash inducements and in-house competitions, said the report. Pressure tactics were applied during registration in many parts of the hospital, the report said. Fairview employees were trained to follow a battery of pre-treatment collection approaches.

"The Accretive culture has converted the hospital culture from that of a charitable organization to that of a collection agency,'' the report said. "Perhaps the most damaging act by Accretive was to undermine the basic premise that a hospital is a sanctuary to treat the sick and infirm.''

When three doctors at one Fairview hospital complained last year that patients were foregoing treatment because of Accretive's high-pressure payment demands, an Accretive employee treated the concerns as bothersome to the goal of maximizing collections, the report said.

Accretive is one of a group of collection companies specializing in health care collections. Last year, the publicly traded company reported $29.2 million in net income, up 130% from a year earlier. Accretive estimated that as a result of losing the Fairview contract it will lose $62 million to $68 million in business, or about 6% of its 2012 revenues. Accretive officials were not immediately available for comment.

Swanson's office sued Accretive in January, alleging it did not keep health care records for tens of thousands of patients confidential (see story).

Swanson's office began to investigate the relationship when the consulting firm lost a laptop computer last summer with medical data on 23,500 Minnesota patients of Fairview and North Memorial Health Care.

Another another arm of the investigation is centered on North Memorial's business relationship with Accretive, but that probe has been impeded by North Memorial 's "profound lack of cooperation,'' Swanson said.

North Memorial spokesperson Mark Vukelich said, "We do not use Accretive for debt collection. We use Accretive for our revenue cycle management.''

The state review of Fairview's revenue management contract with Accretive was done as part of the attorney general's oversight authority of public charities, including not-for-profit hospitals.

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