Accretive Health CEO Dr. Emad Rizk is leaving the struggling revenue-cycle company and has been replaced by Joseph Flanagan.
The Accretive Health board of directors said in an announcement Thursday that it had promoted Flanagan from his position of COO.
Rizk, who also resigned his board seat, will stay on temporarily to assist Flanagan with the transition.
The leadership change comes less than six months after Ascension Health joined private equity company TowerBrook Capital Partners in buying a 40% stake in Accretive to assure the company's financial viability.
Ascension Health, the nation's largest not-for-profit Catholic hospital system, agreed in December to a 10-year sole-source contract for acute-care revenue-cycle products and support from Accretive and along with TowerBrook will invest $200 million in the company.
In its announcement, Accretive said Flanagan has a track record of standardizing best practices and promoting operating efficiencies.
Flanagan joined Accretive as its COO in June 2013, having served previously as senior VP of Worldwide Operations and Supply Chain at Applied Materials Inc. Flanagan has been appointed to the Accretive board of directors.
“He has spent years working as the most senior operator across the entire company and has in-depth experience with problem-solving, organizational scaling and driving value for Accretive Health's customers,” the company said.
Revenue-cycle companies assist hospitals and physicians collect payments and authorize patients for insurance coverage. In 2015, Accretive posted a net loss of $84.3 million, compared with a net loss of $79.6 million for 2014. Revenue in 2015 was $117.2 million.
Rizk took over as CEO in July 2014 and has worked to fix a company that was accused of preying on vulnerable hospital patients and needed to restate years of financial reports.
In an interview this month, Ascension CFO Rhonda Anderson said the hospital system likes several aspects of Accretive's technology and services.
Anderson said Accretive is fast and accurate in determining insurance authorization for covered care. She said it also does a good job of evaluating patients who have been unable to pay their share within 30 days and predicting whether the patient has the resources to pay or if they might be eligible for Medicaid or another program for healthcare coverage.
Those qualities are becoming increasingly important in an insurance environment characterized by high-deductible plans. “What was traditionally done on the back end (of care), hospitals are trying to move to the front,” Rizk said.
