Accretive Health Inc. was sued by the state for abusive debt-collection tactics.
Minnesota hospital patients who endured abusive billing tactics linked to Accretive Health Inc. have begun receiving restitution payments averaging $4,000 apiece, Attorney General Lori Swanson said Tuesday.
Some 90 patients will share $364,000 -- part of a $2.5 million pool funded by Accretive to settle a lawsuit filed by Swanson in January. The remainder of the restitution fund -- more than $2.1 million -- will go to the state's general fund under terms approved in July by a federal judge. The settlement also bars Accretive from operating in Minnesota for two to six years.
Minnesotans who were subjected to financial harassment while receiving medical care at Fairview and North Memorial hospitals had until Oct. 31 to file claims.
Swanson said that most patients who came forward with complaints were not seeking a financial reward and that some purposely avoided the restitution process, which was run by former Minnesota Supreme Court Justice James Gilbert.
"I have never seen such a classy group of witnesses,'' Swanson said. "These good Samaritans came forward to help others and to make sure that what happened to them didn't happen to any other patient.''
Individual restitution amounts were determined by Gilbert, who met individually with the claimants and took sworn testimony. The awards ranged from $1,000 to $7,000, with the highest payments going to people such as a Fairview emergency room patient who was asked by a hospital employee to make an up-front payment while having a stroke.
Swanson began investigating the Chicago-based consulting firm after one of its employees lost a laptop computer with medical data on 23,500 Minnesota patients of Fairview and North Memorial hospitals, where Accretive worked as a revenue-boosting consultant. The attorney general alleged that Accretive violated health privacy laws and state consumer protections by compiling scores on patients that included a "frailty'' evaluation and a prediction of whether they would be hospitalized.
"Why should anyone other than a doctor have such basic and personal and intrusive information about a patient?'' Swanson said at the time.
Swanson's office was soon besieged by callers who told horror stories about being intimidated and "shaken down'' for payment in Fairview's emergency rooms and in other hospital wards -- often before they received medical treatment.
At least 60 patients provided affidavits to the attorney general, which she released in April as part of a blistering report on Accretive's heavy-handed collection practices. One woman said she was asked for payment while being treated for a miscarriage, and others said they were hooked up to morphine or other drugs while staff members made bedside payment demands.
The allegations led to a U.S. Senate field hearing at the State Capitol, conducted by Sen. Al Franken, and to the ouster of Fairview CEO Mark Eustis, who was responsible for hiring Accretive as a consultant.
To resolve Swanson's lawsuit, Accretive agreed to a settlement that bars the company from operating in Minnesota for two years. After that, the company will need permission from the attorney general to return to Minnesota before November 2018.
The restitution fund was part of the agreement, which was approved by U.S. District Judge Richard Kyle. The vast majority of the recipients were patients of Fairview, the attorney general's office said.
Accretive consistently denied any wrongdoing and said there were "no findings of fault.'' It agreed to pay restitution and to exit the state "in order to prevent this matter from being a continued distraction,'' the company said when the settlement was announced.
Tony Kennedy 612-673-4213