Attorney General Lori Swanson said employees of the hospital system tried to collect upfront money from patients before treatment.
Fairview hospital employees used high-pressure tactics in emergency rooms, cancer units and delivery wards to try to collect money from patients before they were treated, according to a blistering report issued Tuesday by Minnesota Attorney General Lori Swanson.
The collections strategy, designed by an Illinois consulting firm called Accretive Health, was so heavy-handed that several doctors complained it might discourage patients from seeking medical care, the report found.
Swanson said the practices, uncovered during a review of Fairview's management contracts with Accretive, appear to have violated federal and state laws, including those regulating debt collection and patient privacy.
"Perhaps the most damaging act ... was to undermine the basic premise that a hospital is a sanctuary to treat the sick and infirm," the report said.
Fairview issued a brief statement Tuesday saying it has cooperated with Swanson and shares her concerns about the practices. Fairview announced that it has dropped Accretive as its revenue manager, although it continues to use the consulting firm for other services.
The statement did not say what, if anything, Fairview officials knew about the collection practices. "We continue to evaluate issues raised by the Attorney General and will take action as appropriate," it said.
Swanson's probe found that Accretive employed collection quotas, cash inducements and in-house competitions using National Football League team names to motivate staff members to squeeze upfront payments from patients. At patient registration desks, for example, employees were told to follow lengthy scripts, written by Accretive, to press patients for payments before they got treatment, according to the six-volume report.
In one case, a child who sought treatment at the University of Minnesota Amplatz Emergency Room reportedly was kept waiting while the parents, who were uninsured, met with an Accretive "financial counselor." The incident prompted the hospital's own employees to question whether Accretive was violating federal law, which requires emergency rooms to see patients without such delays.
Accretive, whose founder and CEO is Mary Tolan, a former director of Best Buy Inc., declined to field questions Tuesday, but issued a statement saying, "We have a great track record of helping hospitals enhance their quality of care. For example, we have helped over 250,000 patients get insurance coverage.''
One of the nation's largest medical debt-collection firms, Accretive came to Swanson's attention last summer, when an employee lost a laptop computer containing personal data on thousands of Fairview patients. Swanson later sued the company, alleging it failed to protect the confidentiality of patient records or tell patients about its role in managing the revenue and care delivery at two local hospital systems.
Fairview's decision to hire Accretive reflects the intense financial pressures facing hospitals at a time when 49 million Americans lack health insurance and the volume of charity care is rising. In 2010, for example, Minnesota hospitals wrote off $311 million in care, which includes people lacking insurance and those who didn't pay their portion of the bill, according to the Minnesota Hospital Association (MHA).
Wendy Burt, an MHA spokeswoman, said it's common practice for hospitals to have internal staff or outside consultants focus on debt collection. Without knowing details of Swanson's report, Burt said the association is "concerned about these kind of allegations."
"The billing conversation should never get in the way of patient care," she said.
Marcia Newton of Corcoran was one consumer who saw Accretive's tactics firsthand.
Although she is fully insured by Blue Cross and Blue Shield of Minnesota, she says she was told by a Fairview admissions clerk that she needed to pay $876 upfront as her share of a $9,000 procedure to insert tubes in the ears of her 3-year-old son. But when Newton received her insurance statement, she learned that the procedure cost $4,200 and her share should have been $200.
She says she spent two months fighting with Fairview after her credit card was overcharged by nearly $700.
"If I hadn't read that explanation of benefits from my insurer, I would have thought I paid my money and was done," said Newton, a certified public accountant with an MBA. "A lot of people who couldn't have afforded it would have gotten ripped off."
Labor and delivery
Swanson's report details a shift in Fairview's "culture'' that some employees embraced but that caused others to rebel and complain.
For instance, three doctors at Fairview's University of Minnesota facility complained in March 2011 that some patients were forgoing treatment because of Accretive's upfront payment demands, the report said. An Accretive manager, Andrew Crook, dismissed the doctors' concerns in an e-mail to a fellow employee: "I'm assuming this is a country club conversation that is getting floated around.''
Months later, a spine surgeon complained that Accretive's financial clearance process was delaying treatment for patients at Ridges Hospital. In addition, a group of Fairview ER workers went to Swanson with fears that they could be fired for failing to increase collections.
Pressure tactics were applied during registration in many parts of the hospital, not just the emergency room.
"We need to get cracking on labor and delivery. There is a good chunk to be collected there,'' Fairview employee Jena Anderberg wrote in a July 2010 e-mail to Accretive managers.
The report said Accretive implemented so-called "stop lists,'' or front-end denials where patients were pressured into paying a prior balance for part of a scheduled treatment that day. "On April 19, 2011, Accretive added 'stop lists' for breast cancer patients,'' the report said.
Swanson's report leaves open the possibility that Fairview or Accretive could come under investigation by other agencies. The report found indications that Accretive used religion, gender and marital status to create credit scores on Fairview patients, a potential violation of state and federal law.
Swanson is also examining North Memorial Medical Center's business relationship with Accretive, but that probe has been impeded by North Memorial's "profound lack of cooperation,'' Swanson said.
North Memorial released a statement from its CEO, Larry Taylor, saying it is "working hard to cooperate" with Swanson's investigation. Taylor said that the hospital did provide information that Swanson requested and that it will "continue to provide additional information in a manner that is as timely as possible."
Staff writer Jackie Crosby contributed to this report. Tony Kennedy 612-673-4213