Late Monday, Accretive Health, mired in a medical debt collection scandal, disclosed that it was paying the state of Minnesota $2.5 million to settle the Attorney General Lori Swanson’s lawsuit against the company.
Swanson had alleged that the company violated state and federal laws by trying to collect medical debt, and in some cases, prepayment, from patients in the emergency room before they received treatment. The $2.5 million will go to patients, with any remaining money to be sent to state coffers. A Minnesota attorney said that he expected a larger amount.
Without admitting any wrongdoing or liability, the company also agreed to cease operating in Minnesota. It is banned from operating in Minnesota for two years, following which it will require the Attorney General’s permission for four more years to re-enter. The company also is returning all patient records.
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In its press release, Accretive Health’s chief executive had some tough words for Swanson. “The Minnesota Attorney General’s actions towards Accretive Health were unnecessarily aggressive and, unfortunately, will cost more than 100 Minnesotans their jobs,” said Mary Tolan, CEO of Accretive.
There is no question that the case has been played out in the public eye. After articles appeared in the national media, Senator Al Franken held a jam-packed hearing at the Minnesota State Capitol in May questioning an Accretive senior executive.
On Tuesday, a Minnesota attorney, who formerly worked at the Attorney General’s office said he was surprised at the $2.5 million civil settlement.
“It is a smaller amount than I expected, given all the rhetoric from the Attorney General,” said David Aafedt, shareholder with Winthrop & Weinstine. “What likely happened was that Accretive became frustrated with the constant barrage of questions from the Attorney General, the negative press and the attorneys fees and decided ‘Let’s pay and get out of the state of MN.'”
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But Aafedt noted that the ban could be conceived as a lost opportunity for Accretive both in terms of existing contracts and prospective customers. Accretive has already lost several contracts with Minnesota hospitals such as Fairview since the controversy arose.
Aafedt said that although the settlement seems small, Accretive Health may have to deal with the aftereffects of scrutiny brought by the Minnesota Department of Commerce under a separate Consent Order it agreed to with that state department. The state Commerce Department regulates debt collectors like Accretive.
Further, Aafedt is confident that federal investigators are investigating the company’s practices, so Accretive’s troubles may not be over. An Accretive Health spokeswoman could not immediately confirm whether the company was aware of and had disclosed any federal investigation.
In the press release, Accretive’s Tolan noted how the ban will mean that 100 Minnesota jobs will be lost. An Accretive spokeswoman could not immediately answer what the average salary of the employees is, but it is safe to assume that it would exceed the $2.5 million that the company paid to the state.
Meanwhile a news release from the Attorney General’s office played up the ban and talked about the sworn affidavits of patients who said they were harassed by Accretive employees.
“A hospital emergency room is a place of medical trauma and emotional suffering for patients and their families. It should be a solemn place, not a place for a financial shakedown of patients. It is good to close the door on this disturbing chapter in Minnesota health care,” Swanson said in the release.