Fairview boss apologizes for criticized billing tactics

As Fairview Health Services' CEO apologized to patients and workers for aggressive billing and collection practices, congressional leaders called for an investigation into the unfolding controversy.

In a report this week, Minnesota Attorney General Lori Swanson detailed how Fairview workers and consultants from Accretive Health Inc. employed what she called overly aggressive tactics to get patients to pay their medical bills.

On Friday, April 27, Sen. Al Franken, D-Minn., wrote to the Chicago-based consulting firm seeking responses by next week to a list of questions. Meanwhile, Rep. Pete Stark, D-Calif., has called for a federal probe of Accretive, which has seen its stock price fall by about half since Swanson's report.

Friday night, Fairview officials said they told Accretive they plan to terminate their last remaining contract-an agreement in which Accretive consulted on certain Fairview contracts with health insurance companies.

"These alleged activities included demanding that patients pay for services before and during treatment, particularly targeting pregnant women," Franken wrote in his letter.

"The report also alleged that Accretive provided a broad range of its employees, including debt collection agents, with full access to Fairview patients' detailed medical records."

Fairview CEO Mark Eustis sounded contrite during an interview Friday.

"Some of our patients don't feel they've been treated with respect and dignity," Eustis said. "It's obvious that we placed some of our employees in uncomfortable situations."

Even so, he defended the decision by Fairview executives in 2010 to hire Accretive, since hospitals often seek outside help for such tasks as bill collection.

But he said that if Fairview knew then what it knows now, "we wouldn't have made the same decision."

An Accretive Health spokeswoman did not immediately offer a response to the comments.

After Swanson released her report Tuesday, the company issued a statement saying it has helped hospitals across the country enhance their quality of care while guiding patients to insurance coverage.

An Accretive Health filing with the federal Securities and Exchange Commission says the company's clients include some of the most prestigious health systems in the country, including St. Louis-based Ascension Health and Dartmouth-Hitchcock Medical Center.

Swanson's report includes several hundred pages of documents describing alleged problems with everything from charity care policies and debt collection practices to privacy violations and a "culture clash" between the nonprofit health system and the for-profit consultant.

As a charitable organization, Fairview receives an exemption from paying property taxes, income taxes and sales taxes, Swanson noted, while investors who buy Fairview bonds receive tax-exempt status on the dividends. In exchange, Fairview must operate exclusively for charitable purposes, her report stated, adding that the obligation includes offering and publicizing charity care programs for needy patients.

Fairview says it stopped using Accretive as a bill collector in early January and decided in March to end its "revenue cycle" contract, in which Accretive directed hospital workers on everything from patient registration and admissions to scheduling and the billing process.

A total of 37 workers from Accretive worked in Fairview hospitals, clinics or administrative offices, said Dan Fromm, chief financial officer at Fairview. Accretive did not have the power to independently hire and fire workers, he said.

But Swanson maintains the revenue cycle agreement between the parties gave Accretive Health too much control. Accretive, in turn, imposed collection quotas on hospital employees and created a "high-pressure boiler-room style sales" atmosphere, her report states.

Eustis said he doesn't think patient care was harmed in the hospital's work with Accretive Health.

"I don't believe that we actually have done something that's impaired the clinical care of an individual patient," Eustis said, although he said some patients might think differently.

"If they feel that way, it's real," he said. "So, we want to honor that feeling and be respectful. But I honestly believe we have not done anything that's put any patient in jeopardy by delaying or getting in the way of the care process."

Minneapolis-based Fairview operates seven hospitals in Minnesota and a network of clinics. Its relationship with Accretive was thrust into the spotlight last year when the health system informed thousands of patients that their medical records were on a laptop stolen from the locked car of an Accretive employee.

In January, Swanson sued Accretive and alleged violations of state and federal privacy laws, state debt collection laws and state consumer protection laws.

Fromm, the chief financial officer at Fairview, said Friday that the health system agrees with Swanson's findings relative to possible violations of a 2007 agreement between the health system and the attorney general's office.

In that agreement, Fairview said it would give patients a reasonable chance to pay their bills, as well as easy access to charity care.

On those points, Swanson's report relies on Fairview's own auditing documents to substantiate allegations, Eustis said. He added that Fairview was moving independently to change its relationship with the company when it learned of Swanson's investigation.

"I think we did identify issues fairly early," Eustis said.

To re-establish trust with the community in the wake of Swanson's report, Fairview intends to do some "culture work," Fromm said.

"These are sensitive situations," he said about collecting medical bills. "(We) need to make sure that the concerns of patients in those situations are taken into account."

Eustis, the Fairview CEO, added: "We want to work hard to repair that trust."