An inquiry into hospital billing company Accretive Health brought into sharp focus the industry's increasing efforts to collect cash from patients.
Chicago-based Accretive may have violated state and federal laws that protect consumers and safeguard patient privacy with policies that pushed patients to pay bills as they sought medical care, even in the emergency room, according to a report released last week by Lori Swanson, Minnesota's attorney general.
When patients balked, bill collectors were instructed by Accretive to press for payment, urging patients to draw on unemployment aid or borrow from relatives if necessary, the six-volume report said. Collectors were told to warn uncooperative patients of a possible credit-score hit. Patients' private medical records were also used in collection efforts, the report said.
U.S. hospitals in recent years have increasingly employed financial screening strategies to determine how much patients owe even before they receive treatment. That trend has been aided by the growth of companies, including Accretive, that market services to identify how much patients owe or whether they are likely to pay (Aug. 17, 2009, p. 28).
The Minnesota report once again brought hospital billing into the national spotlight. Hospitals faced criticism during the past decade over prices charged to uninsured patients and aggressive efforts to collect bills. More than 4,200 hospitals have signed on to the American Hospital Association's principles and guidelines for hospital billing and collection practices, which were developed following earlier scrutiny of the industry's practices.
“None of the collection practices listed in the attorney general's report are consistent with the AHA guidelines, and we don't condone them or excuse them,” Marie Watteau, an AHA spokeswoman, said of last week's report.
Accretive, a publicly traded company based in Chicago, saw its stock slide last week by 50%, according to Yahoo Finance. The Minnesota report also prompted one additional state inquiry and a call for a federal agency to do the same.
Illinois Attorney General Lisa Madigan said she would launch an investigation of Accretive. And Rep. Pete Stark (D-Calif.), in letters to HHS' inspector general's office and the CMS, urged officials to look into possible violations of federal law by the company. Stark also asked for a report on enforcement measures and a notice to hospitals paid by Medicare if violations are found.
Accretive CEO Mary Tolan responded briefly to the scrutiny last week. “I think that our growth going forward is going to continue to be a function of the good work that we're doing with our customers, who are really very supportive of us,” Tolan was quoted as saying in Crain's Chicago Business, a Modern Healthcare sister publication. “That is what's going to carry the day, not this current media blitz.”
Meanwhile, Fairview Health Services, the seven-hospital Minneapolis-based system where Accretive's collection efforts prompted the attorney general's probe, said it ended its billing contract with the company last month.
Swanson's report raised questions about whether Accretive violated charity-care policies at Fairview that prohibit collection efforts for low-income patients as they seek financial aid.
Accretive used incentives to promote collection efforts, even after Fairview said such tactics violate the health system's policy, the report said. 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.
“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.”
Hospital executives and billing companies said that early financial screening helps patients, who may find out quickly if they qualify for financial aid or will avoid being surprised later by a large bill. And providers must try to collect larger amounts from patients as insurance increasingly shifts healthcare costs to households in the form of larger deductibles or co-insurance, they said.
“We're looking to establish an expectation” that patients with a deductible “pay all or some at the time they're here,” said Steven Hall, senior vice president and chief financial officer at Pekin (Ill.) Hospital, where such efforts have expanded since 2008.