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7/30/2019 Accretive Health Inc Cease and Desist Order Minnesota Debt Collector
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22711 K R J
S T A T E O F M I N N E S O T AD E P A R T M E N T OF C O M M E R C E
In the Matter of the Collection Agency - C O N S E N T C E A S ELicense of Accretive Health, Inc. A N D D E S I S T O R D E RD B A Medical Financial Solutions
License No . CA 40235104
T O : Accretive Health, Inc.
D B A Medical Health Solutions, Inc.
401 North M ichigan Ave.Chicago, II 60611
1. Commissioner of Commerce Mike Rothman ("Commissioner") has advised Accretive
Health, Inc., D B A Medical Financial Solutions, Inc., and any and all subsidiaries, affiliates or related
entities (collectively, "Respondent") that he is prepared to commence formal action pursuant to M inn.
Stat. § 45.027 (2010) and other applicable law, against Respondent's collection agency license based
on allegations contained in the complaint entitled State of Minnesota v. Accretive Health, Inc.
U.S.D.C., Case No. 0:12-cv-00145-RHK-JJK (attached) that Respondent has:
(A ) Failed to implement policies and procedures to prevent, detect, contain and correct data
security violations of 45 C.F.R § 164.308(a)(1) and the Minnesota Health Records Act, Minn. Stat. §
144.293, in violation of Minn. Stat. § 45.027, subd. 7;
(B ) Engaged in a practice of allowing unregistered persons to act as debt collectors in
violation of Minn. Stat, § 332.33;
(C) Failed to provide proper notice to Minnesota debtors in violation of Minn. Stat.
§ 332.37;
(D) Used false, deceptive, or misleading representations or means in connection with the
collection o f debts in violation o f the Fair Debt Collection Practices Act, 15 U.S.C. § 1692e and M inn.
Stat. § 332.37; and
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2 2 7 ^ ^
^(E) ^ Usedu n^ or u^^
o f M ^ ^ § ^ 3 3 ^ 0 ^
2. Respondent ac^owledgesthat^has been advised ofits rights oahe^
matter to present argument to the Oon^issio^^
hearing, and Respondent hereby expressly waives those rights. Respondentneither admits nor denies
the allegations herein. Respondent acknowledges that this order does notaddress any violations that
have previously occurred and Respondent expressly agrees that the purpose ofthis Order is solelyto
prevent further violations ^om occurring. Respondent further acknowledges that it has been
represented by legal counsel throughout these proceedings or hereby expressly waives that right.
3. Respondent has agreed to informal disposition ofthismatterwithoutahearing as
p r o v i d e d i n M i n n . S t a t . § 1 4 . ^ ^ 0 1 ^ a n d M i n n . R . 1 ^ . ^ 0 ^ 1 1 ) .
4. The following Order is in the public interest.
N O ^ T ^ R E F O R E ^ T I S ^ R E ^ O R D E R E ^ p u r s u a n t t o M i n n S t a t ^ ^
5(2010), thatRespondent shall cease and desist Irom any lu^er activity re^uiringacollector'slicense
in the State ofMinnesotaf^raperiod of at least twenty (20) days Irom the elfective date of this order
and continuingthereal er and until Respondent: l)provides at least ten (10) days priornotice to the
Con^ssionerofits intent to resume licensed collector activity,and 2) the Respondent liles with the
Commissioner an affidavit signed by an ofUcer authorised bythecompanyto sign on its behalfthat
Respondent is in compliance withMinnesotadebt collectionlaws.
I T I S F ^ R T ^ E R O R D E R E D , pursuantto Minn. Stat .§45.027,thatRespondentshall :
A . Providealistof al l past and current collectors who may have had contact with Minnesota
debtors or consumers, ^ou must include each collector'slastknownaddressand telephone number.
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22711 K R J
B,-Provide a copy of all letters.-notices including dunning notices or other communications - -
provided to debtors in their attempt to collect debts from Minnesota consumers.
• i
C. Provide your company's debt collector screening process as required by Minn. Stat. § 332.
D . Provide all collector training materials.
E. Provide all policies and procedures for protecting and safeguarding of consumer's personal
information.
F. Provide any and a ll other documents requested by the Department.
Respondent shall provide the above-requested documents arid information as soon as possible
but no later than fifteen (15) days after the effective date of this Order.
IT IS F U R T H E R O R D E R E D , that Respondent shall pay any and all reasonable travel
expenses for Department personnel to verify Respondent's compliance with and/or meet with company
representatives about this order.
This Order shall be effective upon signature by or on behalf of the Commissioner.
Dated: 2 — 3 ^ 1 ^ .
Mike Rothman
Commissioner
85 Seventh Place East, Suite 500
Saint Paul, Minnesota 55101
Telephone: (651)296-2488
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22711 KRJ
C O N S E N T J T O E N T R Y . O F _ O R D E R -
The undersigned, acting on behalf of Accretive Health, Inc, states that he has read
the foregoing Consent Order; that he knows and fully understands its contents and effect;
that he is authorized to execute this Consent to Entry of Order on behalf of Respondent;
that he has been advised of Respondent's right to a hearing; that Respondent has been
represented by legal counsel in this matter; or that he has been advised of Respondent's
right to be represented by legal counsel and that he has waived this right; and that he
consents to entry o f this Order by the Commissioner of Commerce. It is further expressly
understood that this Order constitutes a settlement agreement between the parties hereto,
there being no other promises or agreements, either express or implied.
Accretive Health, Inc
By /
Its:
S T A T E OF T:lliu>0r5
C O U N T Y O F C o o L
This instrument was acknowledged before me on
(name of person)
(stamp)
ijfgtlflZ I tt)by AnPg f r c i
•Iiture of notary offiefer)
OFFICIAL SEAL
i ^ f e f f
Title (and Rank)
M y commission expires:
/•gyv
//^
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U N I T E D S T A T E S D IS T R IC T C O U R TD I S T R I C T OF M I N N E S O T A
State of Minnesota, by its Civil File No.Attorney General Lori Swanson,
Plaintiff,
v . C O M P L A I N T
Accretive Health, Inc.,
Defendant.
The State of Minnesota, by its Attorney General Lori Swanson, brings this action
against Defendant Accretive Health, Inc. ("Accretive" or "Accretive Health") for
violations of the Health Insurance Portability and Accountability Act of 1996
( HIPAA ) , Pub. L . No: 104-191, 110 Stat. 1936, as amended by the Health Information
Technology for Economic and Clinical Health ( HITECH ) Act, Pub. L. No. 111-5,
123 Stat. 226, and Department of Health and Human Services Regulations at 45 C.F.R.
§ 160 et seq.; the Minnesota Health Records Act, Minn. Stat. § 144.291 et seq.;
Minnesota's debt collection statutes, Minn. Stat. Ch. 332; and Minnesota's consumer
protection laws, M inn. Stat. §§ 325D.43 et seq. & 325F.68 et seq., as follows:
I N T R O D U C T I O N
1. Accretive is a portfolio company of the New York private equity fund
Accretive, L L C , which has a controversial history in Minnesota relating to the arbitration
and collection of consumer debts. Accretive wears a number of hats as it relates to the
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patient of two Minnesotahospi^
bothadebtco^ector and tr^ment coordinator
2. Accretive is licensed asadcbt collection agency in Minnesota. Accretive
has largely assumed control ofthem^agement and operations ofthe so-called "revenue
cycles" ofhothFairview Health Services ("Fair iew") and North Mem
("North Memorials including their scheduling, registration, admissions, hilling,
collection, and payment functions. Accretive assumes managerial responsibility for the
hospitalemployees who performthesefimction^ and has "infused"its own employees
into the staff of thehospitals. Accretive engages in"data mining" and"consumer
behavior modeling" on patients, as described below.
3. Fai view is the only hospital system in the country to also hire Accretive to
deliver services underasocalled "duality andTotal Cost of Care" ( ^ T C C contract.
Under this contract, Accretive helps Fairview negotiate contracts with H M O s and
^
ihsurancecompamestl^oughwhichthehospitalreceivesincentivepaytocut patient
costs. Accretive then receivesashar e of the hospital's incentive pay. Under the ^ f C C
contract, Accretive develops "risk scores" on individual patients and manages health risk
assessments, automated careplans, ca e andpharmacy management, anddurationof
hospital stays. Accretive tells i t s ^ a l l Street investors that it identifies patients who are
deemed"outliers"andtracks utilization andprofitandlossby patient. Fairviewhas
called Accretive its "strategic partner." Their relationship is so extensive that Fairview
accountedfor over 13 percent of Accretive'sservice revenue for the first three quarters of
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2^1 (over ^75 rn^o^ The ^ ^ e ^ ^ e e r i o ^ mdi^e th^this f i ^ e ^
entanglement w ih grow oneeaneweontrae discussed helow ,is^
4. Through these extensive relationships, Accretive has compiled a high
volume of extremely sensitive and personal medical, financial, and other records
involving tens ofthousandsofMinnesota patients ofthe two hospital systems. Some of
thedata was storedon anunencryptedlaptop computer. The laptop was lefthy an
Accretive employee in arental car outside the har andrestaurant areaof the Seven
Comers area of Minneapolis. The computer was stolen and, with it,dataon at least
23,531 Fairviewand North Memorialpatients. In responseto one patient's request,
Fairview provided the patient witha"screenshot"of thedata ahout the patient that it
says was on the laptop. The screen shot(attached as paragraph 46)sent to the patient hy
Fair^iewincludesa"medical score" to predict thelikelihood that the patient would he
admitted to the hospital,a"medical score" to predict the "complexity"of the patient,a
description o f the "frailty" of the patients and the dollar amount allocated to the patient's
healthcare provider. In addition, thedata disclosedpersonalidentifyinginformation
ahout the patient, including the patient's name, address, phone number and Social
Security number. The screen also included an itemization of whether the patient had 22
listed conditions, including bipolar disorder, schizophrenia, depression, high blood
pressure, asthma, and even low back pain. Accretive violated privacy laws by failing to
keep private patient data secure.
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5. Actmg^ahcen^ddebtcohecto^A^
identity with Minnesota patients and has failed to comply with the disclosure and
registration requirements ofMinnesota'sdeht collection laws.
6. ThroughthisComplaint,theState of Minnesota seeksto hold Accretive
accountable for its violations ofhealth privacy laws, state deht collection laws, and state
consumer protection laws. TheStatealsoseeksthroughthisactionto determine and
disclose to patients the extent ofAccretive's access to data and the manner in which it
utilizes such data.
^ R I ^ C T I O N A N D ^ E N U E
7 TheCourt has jurisdiction pursuant to 42 U.S.C.^1320d^d),^USC
^ l ^ l , a n d 2 8 U S C ^ 1 ^ 7
8. Plaintiff has provided notice of this action to the Secretary of Health and
Human Services as required under 4 2 U S C ^ 1 3 2 0 d ^ d ^
9 ^enue is appropriate under 2 8 U S C ^1391
P A R T E S
10. Lori Swanson, the Attorney General of the State of Minnesota, is
authorized under HIPAA , Minn. Stat Ch. 8, M ^
and Minnesot 'sconsumer protection statutes, and ha^ common law authority,including
^ ^^ ^ ^^ aut ho r i t y , t o bring this action on behalf of the State ofMinnesot^andi^^
citizens.
11. Accretive is aOelaware corporation withitsprincipal executive offices
located at 401NorthMichiganAvenue, Suite 2700, Chicago, Illinois. Its chief executive
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o^cerisMaryA.To^andi^Chairm Accretive
incorporated imder the name Health
to Accretive Health, Inc. in200^ Its shares trade under the symhoi"AH"on the New
York Stock Exchange. Accretive has heen registered asaforeigncorporation with the
Minnesota Secretary ofState since Oecemher 20, 20I0and, on that same date, registered
Medical Financial Solutions" as anassumedname withtheMinnesotaSecretary of
State. Accretive became licensed with the Minnesota Department of Commerce asadeht
collectionagency on January 20, 2011, listing Medical Financial Solutions" as an
assumed name with that agency, and is currentlylicensedasadeht collector with that
agency. Accretive lists Steve Walters as its sole individual collector. Accretive transacts
business in the State of Minnesota, including onbehalf of bothFair^viewandNorth
Memorial.
12. At all times relevant hereto, Fairview has beenahealth care provider that
operates certain affiliated entities under common ownership or control,which are treated
asacovered entity for purposes o f H I F A A . 45C.F.R.^160.103. At all times relevant
hereto, North Memorial has beenahealth care provider within themeaningofHIFAA.
A s health care providers, Fairview and North Memorial are covered entities within
the meaning of H f F A A , and thus are required to comply with the H I F A A federal
standards that govern the privacy of individually identifiable health informat At
alltimes relevant hereto, Accretive, acting asabusiness associate of both Fairview and
No^Memortal, obtained access to individually identifiable health i n f o ^ ^
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providers' patients and therefore was subject to H I P A A . See, e.g., 42 U.S.C.
§§ 17931-34.
F A C T U A L A L L E G A T I O N S
1. Accretive, L L C ' s Prior Debt Collection Activity.
a. Accretive, L L C ' s Relationship with the National Arbitration
Forum.
13. Accretive was incorporated in 2003 as a "portfolio company" of Accretive,
L L C , a New York City private equity fund founded in 1999 by Wall Street investment
manager J. Michael Cline. In court filings, Accretive, L L C has described itself this way:
"Accretive manages private equity funds which invest largely in companies that manage
back-office administrative processes."
14. Cline is the Chairman of the Board of Accretive. As of April 20, 2011,
Cline and Accretive Investors SBIC , L.P. , of which Cline is managing member, each
owned 19.4 percent of Accretive, for a combined 38.8 percent ownership: In 2010,
Accretive^ L L C arranged a public offering for Accretive Health, netting over $100
million in proceeds.
15. Accretive became licensed with the Minnesota Department of Commerce as
a debt collection agency on January 20, 2011. It sometimes performs debt collection
activities in Minnesota under the assumed name Medical Financial Solutions."
16. Accretive, L L C has a controversial history in the debt collection business in
Minnesota and nationwide. By 2009, through a series of acquisitions, corporate.
formations, management contracts, and asset transactions engineered by Accretive, LLC,
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the equity fund sunuhaneousiy took control of the nations largest deht collection
enterprise and became affiliated through ownership and governance Inte^^
nation's largest consumer debt collection arbitration company. This occurred througha
series of transactions engineered by Accretive, LLClnvolvlngtl^eem^or companies:
National ArbltratlonForum(an arbitration company basedlnMlnnesota),^^
debt collection agency), and Mann Bracken (at the tlme,the nation's largest collection
law firm). The transactions can be summarized as follows:
a. Accretive, LLCformedaseries of private equity funds under the
name "Agora" (Greek for "Forum"), which in turn acquired a $42 million,
40 percent financial interest and governance rights in the Minnesota-based
National Arbitration Forum. The Forum was the nation's largest arbitration firm
for consumer credit card collections, handling over 200,000 consumer arbitrations
each year.
b. Accretive formed and fundedalarge national debt collection agency
called A^ant, L L C , which bec^eadebt collector for the credit card industry and
debt buyers. Accretive, L L C owned over 68 percent of Axiant.
c. Axiantthenacquiredthe assets and collections operations of the
Mann Bracken law firm, the nation's largest collection law firm (which had
previously acquiredtwootherlarge national collection law firms). Gfthe214,000
consumer arbitrations processed by the National Arbitratiou Forum in 2006,
125,000, or almost 60 percent, were filed by Mann Bracken and its predecessors.
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17. Though these fransacrion^ACC^
entfre"revenue eyele" (e.g., the eoheetionageney, theproseeutinglawfirm, andthe
neutral arhitrator) for consumer credit eardeoheetionsm Accretive,
L L C wanted toforma^hroad arbitration ecosystem" wluchwould pay hugefina^^
dividends tor the equity fund. Prior to this scheme, law firms were generally owned hy
individual lawyers due to professional regulations that prohibit for-profit corporations or
non-lawyers from owning law firms, such that W all Street could not profit from law firm
revenues. Through these transactions, Accretive, L L C essentially sought to"monetize"
for Wall Street investors the profits to be made from debt collection law firms.
According to Accretive, L L C ' s internal documents, the executives wantedtheir debt
collection and arbitration system to expand to "becomeacomprehensive, alternative legal
system."
18. h^July,2009, the Minnesota Attorney General filedalawsuit against the
National Arbitration Forum and its affiliates in Hennepin County District Court in
Minnesota. Thelawsuit alleged, inpart,thattheNational Arbitration Forum^which
held itselfout as an independent and neutral arbitrationcompany—misled consumers,
courts, and the public about the extensive financial and governance cross-ties with
Accretive, L L C , which constituted an irreconcilable conflict ofinterest.
19. Asaresultofthehtigation, the National ArbifrationForum (the arbitration
company) exited the consumer arbitration business. Shortly thereafter, in November,
2009,Axi^t (the debt collector) filed for ban ^
in Delaware, fn or about January, 2010, Mann Bracken (the collection law firm) closed
8 ^
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its doors and was placed mto j u d i c i a l ^
in Maryland. A t the time of their closure, all tl ee entities had been the subject of man
consumer complaints alleging heavy-handed collection conduct.
b. Accretive Health and the National ArbitrationForum.
20. Before the three companies shut their doors, Accretive, L LC angledto
profit evenmorebyjoining the Forum's operations withthose of AccretiveHealth.
Accretive, L L C wanted to "launch" the Forum into the arbitration ofhealth care disputes
between patients and hospitals using Accretive Health and stated that it had spoken with
Accretive Health CF^CM aryTolan about placing arbitration clauses in hospitalpatient
agreements. Accretive, L L C told the Forum that one of Accretive Health'sclients^the
largest non-profit hospital in the country (Ascension Health ofMissouri)—had provided
it with access to $ l B n of dormant receivables to attempt collection, asasideline to the
core relationship." Accretive, L L C told the Forum that, if they did business together,
"^wjebelieveourdeepexpertiseandrelationshipsinhealthcareshouldenableusto
jump-start N A F ' s expansion into an extraordinary market opportunity: the use of
arbitration inconsumerhealthcaredisputes and payments." Accretive, L L C told the
Forum that it wanted to "leverage the Accretive network" and set forthaplan in which:
h^ new industries, such as healthcare, NAFFrocedures are used early and consistent
the standard method for resolving payment disputes. Byplaying aprominentrole,NAF
fimdamentally shapes the collections players and tactics that emerge in these industries."
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2. Accrete Returns to Minnesota with Accrete e a l ^
^ Accretive health ^asTa^en Over management of the ^Revenue
Cycles^ofFair^iew and North memorial.
2L Accretive makes most of its money hy entering into "Revenue Cycie
Operations"contracts with hospitals. Throughthese contracts, Accretiveiargeiy takes
confroiof the scheduling, registration, admissions,hihing, and collection and payment
functions at its client hospitals. Accretive assumes managerial responsihility tor hospital
employees who perform these factions and "infuses" its own employees into the sta^
of the hospitals. Accretive receives hoth hase fees and incentive payments for working
with hospitals to hoost their revenue and or cut their costs.
22. On its wehsite,Accretive,LLC describes its portfolio company,Accretiye
Health, this way: "Accretive Health takes over responsibility for the people, process and
technology associated with the entire revenue cycle process." It told Wall Street
investors on January 12,2011 that it has"no direct competitors" who performthese
broad functions. In its 2010 Annual Report, Accretive estimated that up to $50 billion
couldbemadethroughthese servicesnationwide (calculated at fivepercentofabout
$1 trillion in annual revenue at the nation'shospitals and large physician organizations).
23. Accretive entered intoaRevenueOycle Operations contract withFairview
in March, 2010,which became effective on May 1,2010. Fairview isalarge health care
system that operates seven hospitals and numerous primary, specialty, and urgent care
clinics. Fairview accounted for 10.7percent(orover$64million)of Accretive'snet
service revenue of $606 million in 2010, according to Accretive's 2010 Annual Reports
10
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Forthenme months endmgSep^
over $75 mihion) of Accretive'snet service revenue of$566milho Fairview has eahed
Accretive its "strategic partners
24. Accretive entered intoaRevenueCycie Operations agreementwith North
Memorial in March, 2 0 i i . North Memorial operates one hospital and numerous clinics
in Minnesota.
25. Accretive assumes responsihility for a client hospital's "revenue cycle"
functions, ft controls and directs the workofhospitalemployees who are engaged in
"revenue cycle"activities. ft also places Accretive employees—who it calls "infused
management"—inside the hospitals and "connects itsj proprietary technology and
analytical applications to the hospital's existing technology systems." Accretive has
summed up this contract this way: "We emhed our technology, personnel, know how
and culture within each customer'srevenue cycle activities and serve as the customer's
B
on site operational partner."
26. Accretive describes the hreadth of its revenue cycle management services
like this: "For our purposes, the revenue cycle starts whenapatient registers for future
service or arrives at ahospital or clinic for unscheduledservice andends whenthe
hospital has collected a ll the appropriate revenue from all possible sources."
27. In its 2010 Annual Report, Accretive states: "^Wje identify patient
accounts with financial risk by applyingdata mining techniques to the data we have
collected." Accretive also "incre^e^ the collection rate on patient-owed obligations" in
11
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part by using "consumer behavior modehngB' Proprietary algorithms assessapatient's
"propensity to pay B'
28. Aeeretive's revenue cycle management contracts "span the entire revenue
cycled including "front office" (scheduling, registration, and admissions), "middle
office" (billing), and "back office" (collections). According to Accretive,whenapatient
registers ataclient hospital, Accretive begins to compile "complete patient information"
on the patient, such as the patient'sSocial Security number and insurance eligibility. It
performs "real-time" checks for insurance coverage upon admission to assess "each
patient's ability to pay " ft maintains an "automated electronic scorecard" that tracks
each patient, including the patient's payment history, throughout ^hepatient'stimeasa
patient, ft identifies patient accounts with financial risk by applying "data mining
techniques,"and it performs "skip tracing." Accretive collects old bills for Fairview.
29. The breadth of Accretive'sactivities is depicted in the following chart from
Accretive's2010AnnualReport(p.l3):
12
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The Accretive Health Revenue Cycle Process Structure and Metrics
Fron t Office
(Patient Ac c e s s )
Middle Office
(Health Services Billing)
Back Office
(Collections)
^ ™ i ^ ^
7 COEs Ragatraacin
MedkalNecesBJty
Sf^taiay ben l
In-HousePanem
financial
Advocacy
Pm-nwqnumwwiPatient
Advocacy
ChargeCapture/Vabdalion
ED Bigitaiay Lost Chaigga
EDAWhonzaUon{it AdnHtefl
Tnag&Wedical
(EDAM
Oocixnomador
.'CaJIna
OPDocumentawn
/Oafcig
mmManagement
MedicareScrubber
Late Charges Oocarrtentason Pfimary BilBng/Codmg
i s rPatent ming
Au#o -Payment
Poeimg
ThiFd-Pany
sivSr
D* dw n* Gov&mmem CrdciitBa&ncsP R M H Rftwr-up u J f Z Z Z . . . liesoiutwn
Underpj/mems
Fdtow-jpPawnFinancial«d«»cv
I***IWMCD
30. The breadth of Accretive"s involvement at the hospitals is similarly
depicted in this chart from Accretive's 2010 Annual Report (p. 22):
Scorecard and Analytics
Integrated Worfciist
Front-End
Z S . £S ^
Patient Pay
Collection
Patient
Financial
Advocacy
Skip Tracing I Credit Check
Reimbursements
Billing and I Best
Claim Status I Possible
Lockbox I Retnittano
Consolidation) Posting
Payer F/U
Yield-Based
Follow up*
Denial
Management
Patient F/U
Patient Slat.
Web Payment
Customer
Service
Pre-Collect &
Dormant
Collections*
CenlraSzatiMi
Shared Service
SohiUons
*
Batch Interface X . i 2 Transactions
13
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b. Accretive Contracts with Fairview to Perform Sweeping
Functions Relating to the MonetizationofHealth Treatment.
3L Fairview advised the Minnesota AttorneyGenerai'sofficeinaietter dated
October i^20iithat"Accretive Health.bassists Fairview in care coordination efforts to
help better coordinate andmanagepatient'sheaith care needs."
32. besides the revenue cyciemanagement contract. Accretive and Fairview
entered intoafiveyear duality and Total CostofCare"^TCC")agreementin
November, 2010. As of the filing ofitsDecemberlO,2010AnnualReport,Fairview was
the only hospital system in the United States that hired Accretive for ^ T C C services, fn
a conference with Wall Street investors on January 12, 2011, Accretive called the
Fairview^TCCagreement its "inaugural" contract.
33. Under the ^ T C C agreement, Accretive helps Fairview negotiate contracts
with certain insurance companies and H M O s that allow Fairview to earn incentive
payments from the insurers and H M O s for cutting health care costs, fn turn, Accretive
receivesashare of the hospital'sihcentive payments under the ^ T C C agreement for cost
savings generatedthrough"managing the carecoordinationprocess." Accretivetold
Wall Street during an investor conference on Novemberll,2010that health care savings
would occur in part through an "intense focus" on "reducing avoidable hospital
admissions." ft f^^er said that the "sickest and most impactable patients" would be
"identified fo r proactive management."
34. Accretive states that the ^ T C C agreement "can help our customers identify
the individuals who are most likely to experience an adverse health event and, asaresult,
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incur high healthcare costs in the coming year." It further states that when a hospital
"adopts both our revenue cycle and quality and total cost of care management solutions,
we can leverage the information available in our revenue cycle technology and data
platform to enable real-time care management."
35. The following chart from Accretive's 2010 Annual Report (p. 17) depicts
the breadth of Accretive's services:
Our quality and total cost of care services offering includes management of the following processes:
Ris k
Evaluation, Strat Deiiverv & Core Admission Coaching &Analytics &
Reportingificnt inii & Access Management Edncatlon
Analytics &
Reporting
Coding
• Health Ris k • Physician Incentive • I'osl-Discliniyc • Hospitalist program / • Performance • Quality
Assessment Structure foilow-up E D management management- scorecard
• Aciniralc claim / « Local PCP • Auihori/aiioits • Dai ly census - Acute / Revenue. Cost. • Pricing/Bcnclit
medical record leadership and • Case Management Ski l led / L T AC Qnnlily. & Service evaluations
docunienlaiiim governance On-bouniing • Patient review hy reviews • Utilizat ion by all» Medica l and Rx structure • Home asscssmenls facility • Population-based healthcare service
claim review c• Comprehensive • Referrals and • Length of stay opportunity reviews types
• Per patient risk rcferrai plans Referral links to management • Training « P / L byscore calculation • Cl in ic a l protocol PCP • Discharge planning education on Patient. P CP . Croup
• Bc M possible determination • Scheduling • Delivery System delivery Networkrevenue calc • Contract sub
specialties
• Contract ancillary
services
• Medica l necessity re-entry • B c nc f i l / E l ig ib i l it y • Benchmarks• Automated care
plans
• Patient social
• Contract sub
specialties
• Contract ancillary
services
review
• I'harnincy
• Tmnsitiunal care • Provider service
issues• Peer group analysis
• Ounier
service• Community Management determinations
determination resources
• Specialist ediciency
evaluation
Payer Rdutio nshi p ManuRemenl
People & Technology
36. Thus, according to the above table and the QTCC contract, Accretive is
responsible for the management of: "risk scores" for each patient, development of
automated care plans for patients, case management, length of hospital stay management,
and discharge planning, among other things. It also performs "analytics and reporting" to
track utilization by patient and physician, to determine profit and loss by patient, and to
identify patients who are "outliers."
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37. The breadth of the managed care service
Fah^iewisa^ore^eetedrnthevarion^oha
account. Tor example,mSeptemher, 2011, Accretive posted an ad tor an"Analyt^
Manager" to staff the Talrvlew contract. The advertisement states that the person will
"aggregate and analyze patient population data and leverage predictive modelsm
order toldentlty Innovative strategies tor population management." As noted above,
Accretive told Its^all Street Investors that "populatlonbased management" tocuses on
Identifying the "sickest and most Impactable patients" for "proactive management."
^ Accretive Loses Sensitive ^ata on at Least Minnesota Ratients
^
3^. Accretive is licensed asadebt collector with the State ofMinnesotaand,m
fact, collects debts for at least one Minnesota hospital system (Tairview). At the same
time, it also assistsTairview with health care management and medical necessity review.
3^. Accretive also manages the"revenuecycle"of North Memorial. (North
Memorial advised the Attorney Oeneral'sOtficeinaletter dated Octoberl7,2011that
Accretive does not perform debt collection services for it.)
40. Accretive states that, among other things, it engages in "data mining,""skip
tracing," "consumerbehavior modeling," and"per patient risk scorecalculation" on
patients.
41. Through these services and others, Accretive amasses and has access toa
lugh volume of sensitive and personal information, including medical informat^^
Minnesota patients served by the two hospitals. ^
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42. On or about ^ y 2 ^ 2 01 ^ a n A c t i v e e^
unencrypted laptopcomputer^
North Memorial patients in the back seat ofarental ear parked in the Seven Com^
and restaurant district ofMinneapoiis. The laptop was stolen.
43. The information on tbelaptop was not encrypted. Tbelaptop was only
passwordprotected. The laptop contained sensitive personalinformationonatleast
23^31Minnesota patients.
44. On or about September 20, 2011, Accretive informed Fairview that
protected health information of approximatelyl4,000 Fairview patients was contained on
the stolen laptop. Accretive stated that the laptop contained protected health information,
including renames, addresses, dates ofbirth, Social Security numbers, other identic
clinical information, includmg diagnosis and conditions, and other financial info
onFairview patients. Other information on the laptop aboutFairview patients included
their dates of service, account balances, account numbers, and medical record numbers.
45. paragraph 46 contains a "screen shot" sent by Fairview to one of its
patients who requested an accounting ofthe information about the patient that was on the
laptop. The information on the "screen shot" sent by Fairview to the patient included the
following:
D Fatient'sfullname
e Oender
e Number of dependents
e Oateofbirth
D Social Security number
e Olinicand doctor
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D Ani^ertc score to predict the "complexity" of the patient
^ Annmerlcscore to predict the pr^hahihty of an inpatient hospital stay
^ The dollar amount "allowed" to the provider
e whether the patient is in frail condition"e Numherof"chromc conditions" the patient has
D Fields to denote whether the patient has:
^ Macular degeneration
^ bipolar disorder
o depression
o l iahetes
o daucoma
o Hl^
o Metaholism disorder
o Hypertension
^ Hypothyroidismo hnmune suppression disorder
o Ischemic heart disease
o Osteoporosis
o Farkinson'sOisease
o Asthma
o Arthritis
o Schizophrenia
o Seizure disorder
o Renal failure
o Low hack pain
46. Thisisaredacted copy of the "screen shot" sent hyFairviewto the patient:
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47. Accretive informed North Memorial that data on approximately 2,841
North Memorial patients was contained on the stolen laptop. Accretive stated that the
laptop contained protected health information, including the name and clinical
information, including diagnosis, condition, and other treatment information. Other
information on the laptop about North Memorial patients are their ful l names, dates of
service (e.g., admission and discharge dates), medical record number, and encounter
numbers.
48. North Memorial later retained a computer expert on its own initiative to
undertake an independent forensic investigation to corroborate the representations of
Accretive about the nature, scope, and extent of the lost data as it relates to North
Memorial patients. According to North Memorial, the expert discovered an additional
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patient whose names and data w ^
revealed to he on the laptop hyAeeretive. North Memorial sent letters to these patients
tonotltythemofthedatahreaeh.
49. It Is not l^own whether Fah^lew took steps to corroborate the Information
provided to It hy Accretive ahont the nature, scope, and extent ofthe lost data as It relates
to Fairview patients. Fairview has not Informed the Attorney Oeneral s Offlce of any
such steps, and It Is not presently l^own whether data about additional Fairview patients
not disclosed to It by Accretive may have been on the laptop.
50. fn Its 2010 Annual report. Accretive states "Oata and Information
regardlngour customers^ patients Isencryptedwhentransmltted over the mtemetor
traveling off slte oh portable media such as laptops or backup tapes." This was not the
case with the stolen laptop.
51. Accretive agreed with bothFalrvlew and North Memorial that It would not
use or disclose protectedhealthlnformatlonlnvlolatlouoff^AA or f^TF^
woulduse"approprratesafeguards"topreventthemlsuseordlsclosureof protected
health Information, ft also agreedtokeepallprotectedhealthmformatlon"strlctly
^
confidential" and require all of Its employees and subcontractors and agents to mamtam
confidentiality of protected health Information as required by f f fFAA^an ft
further agreed to develop, implement, maintain and use appropriate administrative,
teclmical and physical safeguards to preserve the integrity,confidentiality and availabili^
of protected health information and to prevent nonDpermitted or violating use or
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dis osure of proved hea^ A c t i v e
Health violated these provisions
52. l pon information and helief,Aeeretive tailed to adequately keep traek of
the information on the laptops thus, v^^^
the identity o fa l l the individnalswhose data was exposed.
53. Aeeretive^seontraets indicate that eost savings will depend on the manner
and extent to which thehospitals elects to utilize the^Shared Services blended Shore
centers off^xcellence^..^
54. Accretive operatesashared service center in New Oelhi, India. The New
Oelhi service center carries out functions at the same time for multiple hospitals.
Accretive recently told ^ a l l Street investors that it wanted to increase the use of these
shared service centers, ft is unknown at the present time whether Accretive exported any
data ah^ut Fairview or North Memorial patients out-of-state or overseas or whether any
such data is encrypted.
4D Accretive ^as Tried to ^onceai^l ts^e and identity i th patients and
Has Not^o^owed Minnesota ^ebt^o^ieetion^aws^
55. B^ven though Accretive amasses so much private data ahout patients, it goes
to great length to conceal its activities, going so far as to "infuse" employees into^
hospitals andengageinarecycled payroll system. Asaresult, it would he difficult fbra
patientto understand or even he aware ofthe role ofAccretive in their lives.
5 . Fairview and North Memorial are hoth registered with the Minnesota
Attorney Oeneral s Office as charitable organizations under chapter 309 of the
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Minnesota statu^andtheyareboth^
under the Internal revenue Oode. They hoth tile O S Form 990, return of Organiza^
exempt tromlneomeTax, wlththeMlnnesota Attorney Oeneral s Oflree. Fart^H,
Seetlon^ofForm 990 requires an organization to disclose the tlve highest compensated
Independent contractors that received more than ^100,000 ofcompensatlon tor services,
whether professional or other services, from the organization Inthe particular year.
Neither Fairview nor North Memorial disclose their payments to Accretive on their Form
990s. Thus,apatlent or regulatory agency could not read the Form 990 to Identic the
nature of Accretlve^srole as It relates to their treatment or payment tor that treatment.
57. f^pon Information and hellef, the hospltals patlent admission and medical
authorization forms do not Identify Accretive hy name or disclose the scope and hreadth
oflnformatlon that Is shared with It. l^pon Information and hellef, patients are uot aware
that Accretlvels developlnganalytlcal scorestoratethecomplexlty of their medical
condition, the likelihood they will he admittedto ahospital, their "frailty," or the
likelihood that they will he ahle to pay for services, among otherthings.
5^. As noted ahove, Accretive hecame licensed with the Minnesota department
of commerce asadeht collection agency on January 20, 2011,listing Medical Financial
Solutions" as an assumed name.
59. Minnesota law rec^uiresadeht collection agency,when initially contacting
aMinnesotadehtorhy mail, to includeadisclosureonthe notice stating "This collection
agency is licensed hy the Minnesota department of commerce." Minn. Stat.
^332.37(21^2010^. fn addition, the Minnesota deht collection laws makeit unlawful
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for aco^ction agency t^
FracticesActw^ea^emptmgto^
The federal Fair Oebt sec t i o n Frances Act a t ^ ^ ^
following conduct unlawful
The lailnre to disclose in the initial written communication with the
consumer and, in addition, if the initial communication with the consumer
is oral, in that initial oral communication, that the deht collector is
attempting to collectadeht and that any information obtained will he used
for that purpose, and the failure to disclose in subsequent communications
that the communication is fromadebt collector,....
^0. fn some cases, debt collection letters sent byAccretive to Fairview patients
havegone so f^ as to say,"^eare now reaching the point where your account may be
turned over toacollection agency"—without disclosing that Accretive^itselfadebt
collection agency attemptingtocollectadebt.
^1 . Although Accretive ust entered the Minnesota market, it already has been
sued onanumber of occasions in Minnesota by patients who allege that it failed to give
the required disclosures identifying itself asadebt collection agency.
^2. Minnesota law rec^uireslicensed debt collection agencies toregister with
the State ofMinnesota all individuals employed by the agency who perform the duties of
a"collector" under Minn.Stat.Oh.332. According to the Minnesota department of
commerce, Accretive lists Steve Walters as its sole individual collector with the
Minnesota department of commerce. Accretive does not, however, identify the other
employees who act as "collectors" in Minnesota according to the department of
commerce.
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C O U N T I: V I O L A T I O N S O F H I P A A
63. Plaintiff restates and realleges all prior paragraphs of this Complaint.
64. Accretive is business associate1 of both Fairview and North Memorial as
defined in HIPA A. See, e.g., 45 C.F.R. § 160.103. Because HITECH Section 13401 (42
U.S.C. § 17931) provides that 45 C.F.R. §§ 164.308, .310, .312 and .316 apply to a
business associate of a covered entity in the same manner as they would to a covered
entity, Accretive is thus subject to the security provisions contained within H I P A A as
well as applicable civil and criminal penalties.
65. Accretive violated H I P A A by failing to comply with the standards,
requirements, and implementation specifications as set forth in H I P A A , including the
following:
a. Accretive failed to implement policies and procedures to prevent,detect, contain, and correct security violations in violation of 45 C.F.R. §164.308(a)(1).
b. Accretive failed to implement policies and procedures to ensure thatall members of its workforce have appropriate access to electronic protected health
information and to prevent those workforce members who do not have authorized
access from obtaining access to electronic protected health information in
violation o f 45 C.F.R. § 164.308(a)(3-4).
c. Accretive failed to effectively train all members of its workforce,
including agents and independent contractors involved in the data breach, on the
policies and procedures with respect to protected health information as necessary
and appropriate for the members of its workforce to carry out their functions and
to maintain security of protected health information in violation of 45 C.F.R. §
164.308(a)(5).
1
A business associate is an entity that performs or assists in the performance of activities
that involve the use or disclosure of individually identifiable health information or other
regulated functions on behalf of a covered entity, but is not a member of the covered
entity's workforce. 45 C.F.R. § 160.103.
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d. Accretive tailed to identity and respond to suspected or known
security incidents andtomitigate, to the extent practicable, harmtul etfectsof
security incidents that were known to them in violation ot 45 ^ ^ R . ^
1 6 4 3 0 ^ ^
e. Accretive failed to implement policies and procedures to limitphysical access to its electronic information systems in violation of 4 5 d ^
^164310^1)
f Accretive tailed to implement policies governing the receipt and
removal ofhardware and electronic media that contain electronic protected health
information into and out ofafacility,and the movement of these items witb^ the
facilityin violation of 45CFR^16431^d^l)
g. Accretive tailed to implement technical policies and procedures for
electronic information systems that maintain electronic protected health
information to allow access only to those persons or software programs that have
heen granted access rights in violation o f 45 C^ R^164^12(a^l ^
h. Accretive failedtoimplementreasonahleandappropriatepolicies
andproceduresto comply withthestandards,implementationspecifications,or
otherrequirementsofPartl64,SuhpartCin violation o f 45 C^R^164^1^
66. The Attorney general has reason to believe that the interests ofMinnesota
residents are threatened and have been adversely affected by the above violations.
C O U N T O ^ V I O L A T I O N S O F T ^ ^ N N ^ O T A ^ A L T H ^ C O ^ ^
67. Plaintiffrestates and realleges all prior paragraphs of this Complaint.
68. The Minnesota Health Records Act Minn. Stat. 144.291^^.,applies
to the release of health records in Minnesota, ftprohibits pro viderso ran y^^^^^
^ ^ v ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ v ^ ^ from releasing health records u^
(1) asignedanddatedcousentfromthepatient orthepatient's legally
authorized representative authorizing the release^2) specific authorization
inlaws or^arepresentation from the provider that holdsasigned and
dated consent from the patient authorizing the release.
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Mmn.S^^144^9^sub^2(2010)^mphasisadd^ The p^ien^ consent is valid
for one year uniessadifferent time period is specified in the consent or is pr^ ^
i a w ^ s u h d ^
^
69 . Accretive nniawfnhy released the health records of at least 23,531
Minnesotapatientsonorahout^nly 25,2011, when an Accretive employeelett those
patients'health records inacar, in an unencrypted laptop, and that laptop was stolen.
70. Even ifFairviewandNorth Memorial had consent from patients to release
medical intormationto Accretive, Accretivehadanohligationtosecnrethe patients'
health records from further release. Minn.Stat.^l44.293,suhd.2.
71. The State ofMinnesota seeks to er oin Accretive from further violations of
MinnStat.^144291^^
C O U N T ^ V I O L A T I O N S O F ^ ^ S O T A ^ ^ T C O L ^ C T I O ^
72. Plaintiffrestates and realleges all prior paragraphs of this Complaint.
73. Minnesota law contains the following definition of"collectionagency'':
"Collection agency" means and includes any person engaged in the
husinessofcollection for others anyaccount,billor other indehtedness
except as hereinafrer provided, ft includes persons who furnish collection
systems carryinganame which simulates the name ofacollection agency
and whosupply formsor form letters toheusedhy the creditor, even
thoughsuch forms directthe dehtortomakepayments directly to the
creditorratherthantosuchfictitious agency.
Minn.Stat^ 332 31,suhd3(2010)
74. ^ Accretive is a "collection agency" under Minnesota law. ft hecame
licensed with the M^esota department of Commerce asadeht collection agency on
^anuai 20, 2011, listing Medical Financial Solutions" as anassumed name.
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75. Minn. ^^.^332.37 (2010) provides
(21)wheninifialiyeon^mgaMi^
diselosnre on the eontaet notice, inatype size or font wlueh is ^
larger than the largest other type of type size or font nsed in the text of the
notice. The disclosure mnst state: "This collection agency is licensed hy
the Minnesota Oeparhnent ofConnnerce."
76. Accretive sent deht collection noticestoMinnesotapatientsthatdonot
complywithMinnStat^3237(2010).
77. MinnStat. ^33233, suhd. 5a (2010) provides that "^licensed collection
. ^ ^
agency,onhehalf of an individual collector, must register with the state all individuals in
the collection agency'semploy who are performing the duties ofacollector as defined in
sections 332.31to33245"of the Minnesota statutes. Minn.Stat ^3233,suhd 1
(2010)also requiresaperson acting under the authority ofacollection agency,asa
collector, to first register with the Minnesota Con^issioner of Conuherce.
78. MinnStat^3231,suhd.6(2010)definesa"collector" as follows:"Collector" isaperson acting undertheauthorityofacollection agency
undersuhdivision3, andonitshehalf inthehusinessofcollectionfor
others an account, hill, or other indehtedness except as otherwise provided
in this chapter.
79. Accretive lists Steve Walters as its sole individual collector with the
Minnesota department Commerce. Cther employees, however, also act as collectors in
Minnesota. Asaresult, Accretive has violated M inn. Stat.^332.33,suhd. 5a (2010).
80. Minn Stat. ^332.37(12)(2010)providesthat no collection agency or
collector shall:
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violate any oftheprovisionsoftheFa^
1977, Public Law 95 lO^wlnleattem^^
or other Indebtedness
81. The federal Pair Oebt Collection Practices Act contains a number of
provisions. Por example, f5U.S.C^1692e provides tbat,"Adebt collector may notuse
any talse, deceptive, or misleading representation or means In connection with the
collection of anydebt." Accretive violated this provision by telling Minnesota patients
that, If they do not settle with It, their debt may be referred toacollectlon agency when
Accretive Is, ltself,adebt collection agency attemptingtocollectadebt.
82. 15USC^1692e(ll)makes the following conductunlawtul:
The failure to disclose In the mitral written commumcatlon with the
consumer and,maddltlon, If the Initial communication with the consumer
Is oral, In that Initial oral commumcatlon, that the debt collector Is
attemptingtocollectadebt and that any Information obtained will be used
for that purpose, and the f lure to dlscloselnsubsequent communications
that the commumcatlon Is fromadebt collector, "
83 15 U.S.C ^1692^10) also makes unlawful "^be use of any false
representation or deceptive means to collect or attempt to collect anydebt or to obtain
Information regardlngaconsumer."
84. 15 U . S . C . ^ 1 6 9 2 f also provides tbatacollector may not use any "unfair or
unconscionable means to collect or attempt to collect any debt."
85. Accretive has not always complied with the prohibitions of the federalPalr
OebtCollectlonPractlcesActmvlolatlonofMmn.Stat.^332.37(12).
86. defendant's conduct described above constitutes multiple, separate
violations o f M l n n . Stat. Ch 332.
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C O U N T ^ V I O L A T I O N S O F T ^M ^ ^ F S O T A P ^ V F N T I O N O F ^
U N I F O ^ ^ C F P T ^ T R A ^ F P R A C T I C F S A C T
87. Plamfiffres^es and reneges ah prior paragraphs of this Co
88. Minnesota Stah^s, Sec t i o n s
provides:
The aet,nse,orempioymenthyanyperson of any frand^taise pretense,
faise promise, misrepresentation, misleading statement or deceptive
praetiee,with the intent that others rely thereon ineonneetion with the sale
of any merchandise, whether or not any person has in tact heen misled,
deceived, or damaged therehy,isen^oinahle as provided in section
89. Theterm"merchandise" withinthemeaningofMinn. Stat. ^
includes services. ^Minn.Stat.^325T.68,snhd.2(2010). Health care services area
formof"merchandise."
90 Minn. Stat. ^3250.44, snhdivisionl^010)provides, in part:
Apersonengages inadeceptivetradepractice when, intheconrseof
husiness,vocation, or occupation, the person:
(1) passes offgoods or services as those of another
(2) causes likelihood ofconfusion or ofmisunderstanding as to
the source, sponsorship, approval, or certification of goods orservices
(3) causes likelihood ofconfusion or ofmisunderstanding as toaffiliation, connection, or association with, or certification hy,
another...
(13) engages in any other conduct which similarly creates a
likelihood ofconfusion or of misunderstanding.
91. ThedoctorDpatient relationship ispredicatedontrust. Patients havethe
right to confidentiality of their medical records and to expect that their medical
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informafion wih not be released without their eonsent. Patient eonfidentiaiity is
important to eneonrageatnhand frank exchange
their doctors. Patients also have the right to make informed choices ahont their health
care(e.g., to give their "informed consent") and to withhold consent follow
frank exchange of information between the patient and doctor. Simply put, if patients
have to be concerned about the dissemination of their medical information, they w ^
get treatment. Pheconsequenceofthistobothpatients and the state asawholeis
obvious as it relates to conditions like communicable diseases, mental health, or
management of chronic conditions.
92 Phese concepts have been part of the doctor patient relationship for
thousands of years. Over2,500yearsago,theearlyffippocratic Oath for physicians
provided: A l l that may come to my knowledge in the exercise ofmy profession... will
keep secret and will never reveal." Poday,the modem Code ofEthics of the American
Medical Association requires physicians to "maintain your patient'sconfidentiality" and
to "respect your patient'sright to choose their doctor freely,to accept or reject advice and
to make their own decisions about treatment or procedures." Phese concepts are reflected
asamatter of statelawandpolicy in the Minnesota Health Records Act, Mhm.Stat.
^ 144 . 291^ ^ . , ^ ^ , w h i c h restricts the release of health records in Minnesotaand
which prohibits p r o v i d e r s ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^
releasing health records without the patient's informed consents Phe concepts are also
^
reflected asamatter of state law and policy in the Minnesota Healthcare Patient Bill of
Rights, Minn. Stat. 144.651, which gives patients the right to: (l)have appropriate
^ A ^ B B ^ 30
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medicare based on their mdividualn^
whoisresponsibieforeoordinafi^^
provider^^to have eompiete information regarding di^
risk and prognosis^5) to be respected and(6) to have their medieai records kept private
and confidential
The Minnesota SnprerneConrt has said this abont the right to privacy:
The right to privacy is an integral part of onr humanity one hasapnbiic
persona, exposed and active, and a personal personam guarded and
preserved. The heart of our liberty is choosing which part of onr lives shallbecome public and which parts we shall hold close.
^ ^ v ^ ^ ^ ^ ^ ^
medical and health care records to be among the most personal, private types of
information, fn order to safeguard their privacy and make informed health care
decisions, patients need full, transparent, and accurate information about how their
medical information is used. As set out in this Complaint, Accretive impeded those
rights.
93. Accretive goes to great lengths to mask from patients its involvement with
Minnesota hospitals, including but not limited to the following:
a. Accretive has "infused" its employees into the staff at the hospital.Upon information and belief, patients are not aware who is and is not an Accretive
employee at the hospitals.
b. EventhoughAccretivehasby contract assumed responsibility for
managing key functions at the hospitals, as set forth above, Accretive charges the
hospitals for the payroll costs ofFairview'semployees, and then pays the payroll
backtothehospitalsothatthehospitalemployeesseeahospitalcheck, even
thoughAccretive manages the function.
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c Accretive is not h^edasaconfractoro^990 disclosures fiied with the^temai Revenue Service or Minnesota A ^Oenerai.
d. Accretive has not disclosed that it acts as a deht collector torFairview, in some cases going sofar to tell patients that "your account mayhe
turned over toacollection agency"—without disclosing that Accretive^itselfa
deht collection agency attempting to collectadeht.
94. Accretive hasmisled, deceivedor caused likelihoodot contusionor of
misunderstanding to patients ahout the role of Accretive in their health care. Among
other things, Accretive leads patients to helieve that, or conceals from patients that, tasks
undertaken hy Accretive are done hy Fairview.
95. Minnesota patients are not aware of the extent of Accretive's involvement
in their health care or the extent to which it amasses data ahout them. This includes that:
a. Accretive—a licensed deht collector—has access to at least the
following intormationahout Minnesota patients:
D Fatient'sfullname
D lenderD Numher of dependents
^ Oateofhirth
^ Social Security numher
^ Clinic and doctor
^ Anumeric score to predict the "complexity" of the patient
D Anumeric score to predict the prohahility of an inpatient hospital
stay
^ The dollar amount "allowed" to the provider
D whether the patient is in frail condition"
^ Numherof"chronic conditions" the patient has^ Fields to denote whether the patient has:
o Macular degeneration
o Bipolar disorder
o depression
o Oiahetes
o glaucoma
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o HIV
o Metabohsm disorder
o Hypertension
^ Hypothyroidism
o hnmnne suppression disordero isehemie heart disease
o Osteoporosis
o Parkinson'sOisease
o Asthma
o Arthritis
o Schizophrenia
o Seizure disorder
o Renaitaiiure
o Low hack pain
h. Accretive represents to its investors that it "identities' patientaccounts with tinanciai risk hy applying data mining techniques to the data ithasj
cohectedB'
c. Accretive represents to its investors that it "increased the collection
rate on patientowed obligations" in part hyusing"consumerhehaviormodeling"
d. Accretive represents to its investors that it uses proprietary
algorithms to assessapatient's"propensity to pay."
e. Under the ^TOO agreement with Fairview, Accretivereceives ashare of thehospital'sincentivepaymentsfromcertain H M O s and insurerstor
cost savings generated through "managing the care coordination process."
f. Under the ^ T O O , Accretive works to achieve health care savings in
part through an "intense focus"on "reducing avoidable hospital admissions" and
by identifying the "sickest and most impactable patients" "for proactivemanagement."
g. Accretive helpshospitals identify the individuals who are"most
likely to experience an adverse health event and, asaresult, incur high healthcare
costs in the coming year."
h. Accretive tells its investors that,whenahospital "adopts both our
revenue cycle and quality and total cost of care management solutions,we can
leverage the information available in our revenue cycle technology and data
platform to enable real-time care management."
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Accretive manages the frmcfionsidentified on page i7otits20i0
Annnai Report, incinding that it performs "analytics and reporting" to track
utilization hy patient and physician, to determine profit and loss hy patient, and to
identify patients who are "outliers."
96. fn sharp contrast to the lack of information provided hy Accretive to
Minnesota patients, it provides much more detailed information t o^al l Street investors
ahout its role in the health and lives of patients. Minnesota patients are entitled to know
the information that Accretive amasses ahout them and its extensive role in their health
care so that they can make informed choices ahout their health care and medical records.
B y withholding such information, Accretive has omitted and failed to make necessary
disclosures to Minnesota consumers to enahle them to make informed choices ahout their
health care and medical records. Accretive is responsible to provide such information to
patients. Among other things, it manages, oversees, and controls the hospital employees
responsible to provide such information. ^ ^ ^ ^ ^ ^ v. ^ ^ ^ ^ ^
^ , l ^ F S u p p 2 d 9 6 2 , 9 6 7 ^ M i n n ^ l )
97. Accretive has violated the above provisions through the acts and practices
described in this Complaint, as well as through its material omissions of information to
which Minnesota patients are entitled in order to make informed health care decisions.
98. defendant's conduct described above constitutes multiple, separate
violations of Minn. Stat.^325F.69, subd. 1 and Minn. Stat.^3250.44, subdivision .
B y failing to disclose and on^tting material facts, defendant f i ^ e r engaged in deceptive
and fraudulent practicesinviolationof the these acts. Fortheseviolations,theState
seeks in^unctiverelief civil penalties, costs, and attorneys feesunderMinn. Stat. ^
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325F.69 et seq., 325D.43 et seq., and 8.31. A s part of its request fo r equitable relief, the
State also seeks an order requiring Accretive to disclose to Minnesota patients the data
that it has about them and where and how such data is stored, including but not limited to
whether it has been sent overseas.
P R A Y E R F O R R E L I E F
W H E R E F O R E , Plaintiff State of Minnesota respectfully asks this Court to enter
judgment against Defendant Accretive, awarding the following relief:
1. Preliminarily and perma nently enjoining Defendan t from violations of the
federal health privacy laws, 45 C.F.R. §§ 164.308(a)(1), .308(a)(3-4), .308(a)(5),
.308(a)(6), .310(a)(1), .310(d)(1), .312(a)(1), and .316 as provided under 42 U.S.C.
§ 1320 d-5(d)(l)(A); and from violations of M inn. Stat. Ch. 144, Minn. Stat. Ch. 332, and
Minnesota's consumer protection laws, Minn. Stat. §§ 325D.43 et seq., 325F.68 et seq.
2. Awarding judgment against Defendant for statutory damages for all
violations by Defendant as provided under 42 U.S.C. §§ 1320d-5(d)(l)(B), (2) and for
civil penalties pursuant to M inn. Stat. § 8.31.
3. Awarding P laintiff costs of the action and reasonable attorneys fees to the
State of Minnesota as provided under 42 U.S.C. § 1320d-5(d)(3) and Minn. Stat. § 8.31.
4. An order requiring Accretive to disclose to Minnesota patients the data that
it has about them, where and how such data is stored, including but not limited to whether
it has been sent overseas, and how such data is u tilized.
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5. Such other and further relief as provided by law and/or as the Court deems
just and appropriate.
Dated: January 1 j , 201211 Respectfully submitted,
LORI SWANSONAttorney General
State of Minnesota
A L GILBERTSolicitor General
N A T H A N B R E N N A M A NDeputy Attorney General
J ^ Q
Assistant Attorney General
Atty. Reg. No. 0346597
jacob.kraus@ag.state.mn.us
445 Minnesota Street, Suite 1100
St. Paul, Minnesota 55101(651)757-1454 (Phone)
(651)282-5832 (Fax)
(651) 296-1410 (TTY)
ATTORNEYS FOR PLAINTIFFSTATE OF MINNESOTA
AG : #2944942-v1
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District of Minnesota ( D M N )
C I V I L D O C K E T F OR C A S E #: 0:12-cv-00145-RHK-JJK
Minnesota, State of v. Accretive Health, Inc.
Assigned to: Judge Richard H . K yleReferred to: Magistrate Judge Jeffrey J. Keyes
Cause: 28:1331 Fed. Question
Date Filed: 01/19/2012
Jury Demand: None
Nature of Suit: 890 Other Statutory
Actions
Jurisdiction: Federal Question
Date Filed # Docket Text
01/19/2012 I C O M P L A I N T against Accretive Health, Inc. ( Filing fee $ 350 receipt
number 3-009192.) assigned to Judge Richard H . Kyle per Master List and
referred to Magistrate Judge Jeffrey J . Keyes, filed by Minnesota, State of.
(Attachments: # 1 Cover Letter, # 2 Civil Cover Sheet). (Imb) QC'd on
1/26/2012 (jmf). (Entered: 01/19/2012)
01/19/2012 Summons Issued as to Accretive Health, Inc. (Imb) (Entered: 01/19/2012)
01/25/2012 2 S U M M O N S Returned Executed by Minnesota, State o f. Accretive Health,
Inc. served on 1/19/2012, answer due 2/9/2012. (Attachments: # I Affidavitof Service)(Kraus, Jacob) (Entered: 01/25/2012)
Recommended