Blog: Ascension Health conditionally stands by Accretive Health

The uproar in Minnesota and Congress caused by an inquiry into Accretive Health's business practices apparently did not totally unnerve the company's first and largest customer.

Ascension Health, the nation's largest not-for-profit health system, accounted for nearly 41% of Accretive's revenue at the end of March. Ascension Health also owns 7% of the Chicago-based billing and collection company.

Accretive—which settled a lawsuit last week with Minnesota's attorney general by promising to stay out of the state for two years—disclosed in a filing with the Securities and Exchange Commission that Ascension has renewed its contract for another five years.

Accretive admitted no wrongdoing and continued to reject allegations that it violated patient privacy, debt collection and consumer protection laws.

Ascension Health's decision to renew gives Accretive the right to renew and expand its business with Ascension hospitals (there are 76 across 15 states), which may separately enter into exclusive contracts with Accretive.

However, there are a few notable caveats to the deal in light of scrutiny Accretive faced not only from Minnesota's attorney general, but members of Congress, including Sen. Al Franken, who has since introduced legislation that would prohibit some collection practices used by Accretive.

The company must follow Ascension's billing, collection, charity care and other policies and Accretive is required to help patients qualify for free medical care or other aid, according to a securities filing about the new five-year agreement.

Ascension may also break an Accretive contract if the company's services “causes a material negative impact to Ascension's brand, reputation or operations,” according to regulatory filings.

Fairview Health Services, a Minneapolis health system whose contract with Accretive became the focus of scrutiny, saw its credit outlook lowered to negative from stable, in part because of “reputational risks” from the spotlight on Accretive.

So Ascension will still play ball with Accretive as long as Accretive plays by Ascension's rules.

You can follow Melanie Evans on Twitter: @MHmevans.