In a scathing compliance review report issued by Minnesota Attorney General Lori Swanson on April 24, 2012 entitled “Violations of Federal and State Debt Collection Laws,” the hospital debt collection practices of a large health care debt-collection company called Accretive Health, Inc. were heavily criticized.
In March, 2010, Accretive Health, Inc. entered into a complex collection agreement with Minnesota’s large operator of hospitals called Fairview Health Services in which Accretive was delegated substantial collection management authority. Accretive has a collections call center in Michigan that has as many as 100 debt collectors who are assigned lists of patients from whom they attempt to collect debts owed to about 60 hospitals located in a minimum of 12 states, including Minnesota.
Accretive has divided its collections process into three stages. The “front end” stage involves its employees and those employees that it manages attempting to collect money from patients in the following departments of the hospitals: Pre-Registration/Financial Clearance, the Emergency Department, Hospital Admitting, Financial Counseling, and Customer Service. The employees engaged in Accretive’s collection efforts include: the Registrar, the Financial Counselor, the Medicaid Eligibility Specialist, the Patient Access Supervisor, the Social Worker/Case Manager, and the Clinical Area Administrative Directors.
Every patient who enters a Fairview hospital for any reason will quickly encounter one of these employees who is required to screen each patient for past-due balances and how they will pay for the care they presently need. They accomplish this requirement by viewing each patient’s electronic records and personal information, including their diagnoses. They then obtain information regarding health insurance coverage and whether the patient owes an outstanding balance for previous treatment and has a deductible, co-pay, etc., for currently sought services. Lastly, they are required to attempt to collect from each patient at that time any outstanding balances for prior services and the amount of the deductibles, co-pays, etc. for currently sought treatment. They then enter such information in the computer regarding the amount collected from the patient and the payment plan agreed to.
If the patient indicates he is unable to make a payment that day, Accretive instructs its employees that a payment plan be determined in which the monthly payment must be at least 10% of the outstanding amount or $50, whichever is greater, so that the outstanding balance is paid in full within 10 months. The patient’s credit score and open lines of credit are checked in the process of determining a payment plan. Accretive aggressively scores all its employees involved with collection efforts and sets goals for each debt collector.
The pressure on the employees to collect the outstanding balances owed by all patients is so great that employees have expressed their concern that they will be fired if they do not meet the debt collection goals set by Accretive. The Minnesota Attorney General’s report noted that Accretive’s debt collection program may leave patients with the impression that they will not receive adequate medical treatment unless payment is made, using techniques such as debt collectors visiting with patients who are scheduled for surgery and telling patients who check in at the registration desk that they must first meet with a “financial counselor,” who is actually a debt collector, who will demand payment of prior outstanding balances by credit card or a short-term payment plan.
The debt collectors are required to prepare a “pre-balance stop list” the night before patient appointments so that patients can be stopped for payment before treatment is received. Accretive determined that pregnant women in delivery were the patients who were most concerned about receiving medical treatment and were therefore the most vulnerable in obtaining a pre-balance payment (an email from Accretive instructed an Accretive employee to create a report each morning to “identify moms that admitted yesterday” into labor and delivery and to collect money from them).
Accretive also attempts to collect from patients the amounts of co-pays, deductibles, and other amounts not covered by third-party insurance, before the services are provided. The amounts to be collected are determined by entering the likely diagnostic and treatment codes for the patients into an Accretive computer program that then determines the likely amount that the patients will be responsible to pay themselves. Two problems with this debt collection method are that the entered diagnostic and treatment codes may be wrong, resulting in overpayments, and that some overpayments are not properly refunded to patients (some Fairview overpayments had not been properly refunded to patients for over 3,000 days).
Accretive goes so far as instructing its employee debt collectors to attempt to obtain money from patients at their bedside. Even patients lying in bed in the Emergency Room are subjected to Accretive debt collection efforts: Accretive debt collectors are instructed to “collect at bedside post assessment” in the Emergency Room.
The Minnesota Attorney General’s report noted, “In many places, a hospital is deemed to be a sanctuary, going so far as to protect patients from being served with legal process while in the hospital. In other places, the laws presume that legal documents signed in a hospital setting are questionable because of the vulnerability of the patient. Accretive, on the other hand, has no problem sending collectors to patients’ bedsides.”
Accretive’s debt collection efforts and techniques may be a violation of both Minnesota law (a debt collector cannot imply that medical treatment will be withheld in an emergency situation – Minn. Stat. §§ 332.37(14) and 325D.44(12)) and federal law (the Emergency Medical Treatment and Active Labor Act (“EMTALA”), often referred to as the anti patient dumping law, makes it a violation of federal law to fail to medically screen or treat patients in hospitals with emergency rooms because of lack of health insurance or ability to pay).
The Minnesota Attorney General’s report addressed the possible violation of laws by Accretive accessing private medical information regarding patients: “HIPAA, as amended by HITECH, requires Accretive to only disclose the bare minimum amount of private medical information to its employees that is necessary for them to perform their designated job functions. See, e.g., 45 C.F.R. §§ 164.502(b),.514(d). Debt collectors in Accretive’s MFS office in Kalamazoo, Michigan, however, are given access to vast quantities of private medical information about Fairview patients. Some collectors can log directly into Fairview’s PASS system without restriction, while others gain access to Fairview patients’ private medical information through the WinCollect software. Accretive collectors do not need this information to perform collection activities. They use such private medical information to deceptively gain patients’ trust and bolster their collections performance. These practices violate HIPAA, as amended by HITECH. See 42 U.S.C. § 17935(b); 45 C.F.R. §164.514(d). Moreover, the illegal use of private medical information to deceptively gain the trust of patient-debtors also violates federal and state laws. See 15 U.S.C. § 1692e(10) (prohibiting the use of deceptive means to collect debt); 15 U.S.C. § 1692f (prohibiting unfair or unconscionable means to collect debt); Minnesota’s Debt Collections Act, Minn. Stat. § 332.37(12) (prohibiting violation of FDCPA to collect debt).”
The Minnesota Attorney General’s report concluded: “Accretive’s debt-collection activity is rife with violations of Minnesota and federal laws. Accretive has hidden its true identity from patients, aggressively and illegally attempted to collect debts from patients, improperly used patient health information to collect debts, and failed to follow basic laws regarding the registration and conduct of its collectors.”
Hospitals provide valuable and essential services in the community and should be compensated for the services they provide. However, aggressive, deceptive, and possibly illegal debt collection efforts directed at patients at their hospital bedsides or inflicted on pregnant women in the hospital exceed the bounds of decency.
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