(Story updated at 6:30 p.m. ET.)
Accretive Health and Minnesota's attorney general agreed to settle a lawsuit alleging violation of privacy, debt collection and consumer protection laws.
Accretive Health, a Chicago-based billing and collection company, will stop operating in Minnesota for two years, effective no later than Nov. 1. The company agreed to pay $2.5 million, according to a Securities and Exchange Commission filing.
Patients may receive a share of the settlement under the agreement.
Accretive Health continues to deny any liability or wrongdoing.
The company agreed to destroy or return health and financial information of its Minnesota clients within 60 days of closing down its Minnesota operations, the agreement said. Accretive will also pay for an independent consultant to verify it did so.
Minnesota's attorney general will have the power to oversee Accretive's return to Minnesota's market for four years after the company's two-year exile ends. The company must provide 120 days notice of plans to do business in Minnesota and enter into a consent decree with the attorney general.
Minnesota Attorney General Lori Swanson sued Accretive in January after the theft of one of the company's laptops. Months later, Swanson released a scathing report on the company's collection efforts inside hospitals. The attorney general added claims to her lawsuit
in June, alleging the company's collection tactics were illegal. The company denied the allegations and sought to have the lawsuit tossed from the courts.
“A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families,” Swanson said in a statement (PDF)
. “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 healthcare.”
Accretive also announced that James Bolotin, its vice president and corporate controller, resigned and will join a private Chicago company.
Accretive said its projected annual Minnesota revenue totaled $23 million to $25 million.
“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,” Mary Tolan, Accretive's CEO, said in a statement (PDF)
. “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.”
North Memorial Health Care, based in Robbinsdale, Minn., said the 384-bed hospital and Accretive “mutually decided to end their business relationship” before the settlement was announced, according to an e-mailed statement from a spokeswoman.
“North Memorial is working on an orderly and accelerated transition plan with Accretive to ensure revenue-cycle improvement continues,” the statement said. “The transition is expected to be complete in August.”