Debt collectors posted at ERs as harsh steps taken on hospital bills

04/25/2012 12:00 AM

04/24/2012 10:03 PM

Hospital patients waiting in an emergency room or convalescing after surgery could find themselves confronted by an unexpected visitor: a debt collector at bedside.

One of the nation's largest medical debt-collection companies is under fire in Minnesota for having placed its employees in emergency rooms and other departments at two hospitals and demanding that patients pay before receiving treatment, according to documents released Tuesday by the Minnesota attorney general. The documents say the company also used patient health records to wrangle for more money on overdue bills.

The company, Accretive Health, has contracts with dozens of hospitals around the country. Since January, it has faced a civil lawsuit filed by Attorney General Lori Swanson of Minnesota alleging that it violated state and federal debt-collection laws and patient privacy protections.

Swanson, though not bringing further charges on Tuesday, said she was in discussions with state and federal regulators to prompt a widespread crackdown on Accretive Health's practices in other states.

"I have every reason to believe that what they are doing in Minnesota is simply company practice," she said in an interview, but declined to be more specific.

An Accretive Health spokeswoman said, "We have a great track record of helping hospitals enhance their quality of care."

Hundreds of internal company documents released by the attorney general's office cast a spotlight on the increasingly aggressive medical-collection techniques used against patients at hospitals across the country.

As a growing number of hospitals struggle under a glut of unpaid bills, they are turning to companies like Accretive. To win promised savings, all hospitals have to do is turn over the management of their front-line staffing – ranging from patient registration to scheduling and billing – and their back-office collection activities. Accretive said it has such arrangements with some of the country's largest hospital systems to help reduce their costs.

Indistinguishable from medical staff members, Accretive employees register patients, take down sensitive health information and champion aggressive bill collection goals with incentives like gift cards for staff members, the company records show.

"It is absolutely stunning that the company has systematically trampled on patient rights, perverting the charitable mission of a hospital," Swanson said in an interview.

Accretive is one of a group of debt-collection companies specializing in health care collection. Last year, the publicly traded company reported $29.2 million in net income, up 130 percent from a year earlier.

In pitches to hospitals, Accretive boasts that it trains its staff to focus on getting payment.

Employees in the emergency room were told to ask incoming patients first for a credit card payment. If that fails, employees are told to say, "If you have your checkbook in your car, I will be happy to wait for you," internal documents show.

In July 2010, a manager at Accretive told staff members at Fairview Health Services, a Minnesota hospital group, that they should "get cracking on labor and delivery," since there is a "good chunk to be collected there," according to internal company emails.

As part of its collection strategy, Accretive fostered a boiler-room environment at the hospitals it works with, according to hospital employees and the newly released documents.

While hospital collections increased, patient care plummeted, the employees said. "Patients are harassed mercilessly," a hospital employee told Swanson. Another hospital employee complained, "We were told if we don't get money from patients, in the emergency room, we will be fired."

Accretive debt-collection employees, calling themselves "financial counselors," are instructed by the upper management ranks to stall patients entering the emergency room until they have agreed to pay a prior balance, according to the documents.

Patients with outstanding balances are closely tracked by Accretive staff members, who list them on what employees refer to as "stop lists," internal documents show. In March 2011, doctors at Fairview complained that such strong-arm tactics were discouraging patients from seeking life-saving treatments, but Accretive officials dismissed the complaints as "country club talk," the documents show.

It is not clear how many times the "stop lists" induced patients seeking emergency care to leave the hospital.

By giving its collectors access to health records, Accretive violates the Health Insurance Portability and Accountability Act, colloquially known as HIPAA, Swanson said. For example, an Accretive collection employee had access to records that showed a patient had bipolar disorder, Parkinson's disease and a host of other conditions.

Collection employees also discussed a patient's cancer, speculating about whether the condition was "terminal or disabling," company emails show.

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