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Debt collection agencies have been embedding debt collectors as employees who run interference in emergency rooms and visit patients’ bedsides to demand payment, among other aggressive tactics.
The Minnesota attorney general, Lori Swanson, revealed that Accretive Health, one of the nation’s largest collectors of medical debts, has been engaging in these tactics. The New York Times notes that this raises concerns that “such practices have become common at hospitals across the country.”
Hospitals are increasingly desperate to recoup payments as their unpaid debts mount. To patients, the debt collectors can blend right in with hospital employees, yet these staff members focus on demanding that patients pay outstanding bills and may even discourage them from seeking emergency care at all. For example, they will sometimes purposely “stall” a visitor to the emergency room in an attempt to get payment before the patient receives any treatment. Their focus is on getting money, not the patient’s health.
Additionally, these workers (who are not actually medical staff) sometimes have access to health information, possibly in violation of Hipaa (the Health Insurance Portability and Accountability Act). Accretive employees may also have broken the law by not clearly stating that they were debt collectors.
As hospitals struggle under a glut of unpaid bills, they are reaching out to companies like Accretive that specialize in collecting medical bills.
Hospitals have long hired outside collection agencies to pursue patients after they have left hospital facilities. But financial pressures are altering the collection landscape so that they are now letting collection firms in the front door, according to Don May, the policy adviser for the American Hospital Association, a trade group.
To achieve promised savings, hospitals turn over the management of their front-line staffing — like patient registration and scheduling — and their back-office collection activities.
Concerns are mounting that the cozy working relationships will undercut patient care and threaten privacy, said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition. “The mission of these companies is in direct opposition to the supposed mission of these hospitals.”
Still, hospitals are in a bind. The more than 5,000 community hospitals in the United States provided $39.3 billion in uncompensated care — predominately unpaid patient debts or charity care — in 2010, up 16 percent from 2007, the hospital association estimated.
Accretive is one of the few companies specializing in hospital debt collection that is publicly traded. Last year, it reported $29.2 million in profit, up 130 percent from a year earlier.
Late last month, Fairview Health Services, a Minnesota hospital group that Accretive provided services to, announced it was canceling its contract with Accretive for back-office debt collection. After Accretive informed investors, its stock plunged 19 percent in a day. On Tuesday, the company’s shares closed at $18.49, down 2.7 percent.
Accretive says that it trains its staff to focus on getting payment through “revenue cycle operations.” Accretive fostered a pressurized collection environment that included mandatory daily meetings at the hospitals in Minnesota, according to employees and the newly released documents. Employees with high collection tallies were rewarded with gift cards. Those who fell behind were threatened with termination.
“We’ve started firing people that aren’t getting with the program,” a member of Accretive’s staff wrote in an e-mail to his bosses in September 2010.
Collection activities extended from obstetrics to the emergency room. In July 2010, an Accretive manager told staff members at Fairview that they should “get cracking on labor and delivery,” since there is a “good chunk to be collected there,” according to company e-mails.
Employees were told to stall patients entering the emergency room until they had agreed to pay a previous balance, according to the documents. Employees in the emergency room, for example, were told to ask incoming patients first for a credit card payment. If that failed, employees were told to say, “If you have your checkbook in your car I will be happy to wait for you,” internal documents show.
Employees at Accretive’s client hospitals ask patients to make “point of service” payments before they receive treatment. Until she went to Fairview for her son Maxx’s ear tube surgery in November, Marcia Newton, a stay-at-home mother in Corcoran, Minn., said she had never been asked to pay for care before receiving it. “They were really aggressive about getting that money upfront,” she said in an interview.
Ms. Newton was shocked to learn that the employees were debt collectors. “You really feel hoodwinked,” she said.
While hospital collections at Fairview increased, patient care suffered, the employees said. “Patients are harassed mercilessly,” a hospital employee told Ms. Swanson.
Patients with outstanding balances were closely tracked by Accretive staff members, who listed them on “stop lists,” internal documents show. In March 2011, doctors at Fairview complained that such strong-arm tactics were discouraging patients from seeking lifesaving treatments, but Accretive officials dismissed the complaints as “country club talk,” the documents show.
Ms. Swanson said that the hounding of patients violated the Emergency Medical Treatment and Active Labor Act, a federal law requiring hospitals to provide emergency health care regardless of citizenship, legal status or ability to pay.
In the January lawsuit, Ms. Swanson said that by giving its collectors access to health records, Accretive violated the Health Insurance Portability and Accountability Act, known as Hipaa (pronounced HIP-ah). For example, an Accretive collection employee had access to records that showed a patient had bipolar disorder, Parkinson’s disease and a host of other conditions.
In addition, she said, the company broke state collections laws by failing to identify themselves as debt collectors when dealing with patients.
Late Tuesday afternoon, Accretive announced it won a contract to provide “revenue cycle operations” for Catholic Health East, which has hospitals in 11 states.