The hospital collections firm, banned from Minnesota, is sorting out financial statements.
Embattled hospital revenue management company Accretive Health Inc. has replaced longtime Chief Executive Mary Tolan with Stephen Schuckenbrock, former president of Dell Services, the company said Tuesday.
Tolan will become chairman of Accretive’s board, where she will continue to work with the company’s customers and court new prospects, she said in a brief conference call with analysts.
The move to replace Tolan comes at a difficult time for Chicago-based Accretive, which has not reported fourth-quarter 2012 financial results. The company said last month that it booked revenue for certain contracts incorrectly for at least nine quarters and will restate all quarterly financial statements going back to the second quarter of 2010.
Accretive’s management change also comes nearly a year after Minnesota’s attorney general issued a blistering report on the company’s heavy-handed collection practices that included confronting patients in the emergency room. The company also was accused of mishandling patient data at Fairview Health Services and North Memorial Medical Center.
The replacement of Tolan, a founder of the company, was announced after market closed. Accretive shares finished down 2.4 percent at $10.
Accretive works with hospitals and other health care providers to manage revenue processes. It reported $826.3 million in revenue in 2011, $606.3 million in 2010 and $510.2 million in 2009.
When the company’s debt-collection tactics came under attack in Minnesota, it cost another top executive his job within weeks. Fairview, whose six hospitals include two at the University of Minnesota in Minneapolis, ousted its then-CEO, Mark Eustis, last May. He was responsible for hiring Accretive as a consultant.
Later, Accretive settled with the attorney general, agreeing not to operate in Minnesota for at least two years. The company also agreed to pay a $2.5 million settlement, part of which went to 90 patients who endured abusive billing practices.
In a regulatory filing about its financial statements, the company said it is “still assessing whether restatement will be required for prior periods” and warned that investors should not rely on its financial statements for the 2009, 2010 and 2011 fiscal years. Accretive said it expects the restatements will have no impact on total revenue booked over the life of each existing contract and those that expired before 2012. It also said the revisions will not affect the timing or magnitude of cash flow from operations related to those contracts, and could lead to increases in future revenue.
The company has not explained how it committed the errors. Shares tumbled after it postponed its earnings call on the eve they were to be released.
Schuckenbrock declined to answer when the company plans to release its fourth quarter and full-year 2012 earnings. “I will only tell you that the company will react to that situation and make its announcement as soon as they’re ready,” he said.
In the call with analysts, Tolan said she looked forward to working with Schuckenbrock “to grow and innovate in the company.” She said the company had been seeking her replacement for some time and said the timing comes “as we look to take on a significant amount of new business.”
Before Dell, Schuckenbrock was co-chief operating officer and executive vice president of global sales and services for EDS. He also was chief operating officer of the Feld Group, an IT consulting firm.
Staff writer David Shaffer contributed to this report.