Accretive to Pay $2.5M, Cease MN Work to Settle Suit

The company, which was accused of breaking privacy laws and using unethical debt-collection tactics, did not admit to any wrongdoing in its settlement agreement.

Chicago-based debt collector Accretive Health, Inc., will pay nearly $2.5 million and cease operations in Minnesota for at least two years in order to settle a lawsuit filed by Minnesota Attorney General Lori Swanson, who accused the company of breaking privacy and debt-collection laws.

Accretive has repeatedly denied Swanson’s allegations, and in its settlement agreement, the company did not admit to any wrongdoing.

Swanson sued Accretive in January, accusing the company of violating privacy laws after corporate laptops containing confidential data for Fairview Health Services and North Memorial Health Care patients were stolen.

Then, in a multi-volume report released in April, Swanson leveled new allegations against the company, claiming that it imposed quotas on hospital staff to collect money from patients—sometimes before treatment was provided. The report accused Accretive of using tactics “commonly utilized in high-pressure, boiler room-style sales atmospheres.”

Fairview cut ties with Accretive in April and subsequently chose not to renew the contract of CEO Mark Eustis, who, according to a report by the Star Tribune, was instrumental in hiring Accretive.

In June, Swanson expanded her lawsuit to incorporate the accusations from the April report and tacked on sworn statements from hospital patients who claimed to be victims of the improper collection tactics.

Under the terms of the settlement, which was approved Monday by U.S. District Court Judge Richard Kyle, Accretive is required to cease operations in Minnesota by November and is barred from serving Minnesota clients for at least two years. If, during a four-year period following those two years, Accretive seeks to conduct business in the state, it must first reach an agreement with the attorney general regarding its operations.

Accretive’s only remaining Minnesota client is North Memorial Medical Center in Robbinsdale, according to a report by the Star Tribune.

The $2.5 million payment will go into a “restitution fund,” which will be used to compensate patients, according to a Monday press release from Swanson’s office. The settlement also requires Accretive to return all data about Minnesota patients to their respective hospitals.

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

Accretive said the settlement lets it continue licensing its “revenue cycle” technology, which helps clients manage revenue collection, to clients that it served in Minnesota.

“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,” Accretive CEO Mary Tolan said in a 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.”

Tolan called Swanson’s actions “unnecessarily aggressive” and said they will “cost more than 100 Minnesotans their jobs.”

Mike Rothman—commissioner of the Minnesota Department of Commerce, which contributed to the investigation of Accretive’s practices—said in a statement that the settlement “attempts to rectify the damages inflicted on Minnesota consumers who were deceived, lured into a false sense of security, and then taken advantage of.”

“But no amount of restitution can repair the damage done to the trust and confidence of thousands of Minnesota patients who were subject to predatory collection practices at their most vulnerable moments,” Rothman added.