Fairview Health Services said its board of directors terminated the contract last month during Swanson's inquiry into Accretive Health. “We take the concerns raised by Minnesota Attorney General Lori Swanson very seriously,” Fairview said a written statement. “We have been in consultation with her on these issues for several months. We share many of her concerns and have already taken actions to address them.”
According to Swanson's report, Accretive used incentives to promote collection efforts, even after Fairview said such tactics violate the health system's policy. One Accretive memo instructs collectors to push patients for payment from unemployment or welfare assistance or to borrow from relatives but does not mention Fairview's legal obligation to provide a financial aid policy.
The New York Times reported Swanson said she was in talks with state and federal regulators about Accretive's bill collections.
A spokeswoman for the Michigan attorney general's office said she could not confirm or deny any inquiry in that state. Officials with the Henry Ford Health System in Detroit, another Accretive Health client, are aware of the Minnesota inquiry and have no comment, a spokesman said.
Ascension Health, the nation's largest not-for-profit health system, was Accretive's first customer and remains its largest customer, according to the billing company's most recent annual report.
Ascension, which owns 14 Michigan hospitals, did not respond to a request for comment. The St. Louis-based health system's venture capital arm was an early investor in Accretive.
Hospitals' efforts to collect medical bills from patients have grown increasingly sophisticated and aggressive.
Accretive has disclosed in regulatory filings that losing its revenue-cycle contract with Fairview would reduce its revenue by $62 million to $68 million, which accounts for about 6% of its projected revenue for 2012. “Accretive Health is working to offset the majority of this revenue shortfall with work from new and existing customers,” the company said.
Illinois Attorney General Lisa Madigan is also starting to look into allegations that Accretive Health has engaged in aggressive bill-collecting tactics for hospital clients, according to Crain's Chicago Business.
Accretive's stock price plunged more than 25%, to about $13.56 a share, in early-afternoon trading Wednesday on New York Stock Exchange, after closing at $18.49 on Tuesday.
