A Minnesota hospital company that worked with debt-collection firm Accretive Health is in hot water with the federal government over allegedly harassing sick patients for money in the emergency department and at their bedsides.
The University of Minnesota Medical Center in Minneapolis, a Fairview Health Services hospital, could get booted from Medicare and Medicaid as a consequence of these alleged activities, according to the Star Tribune. Lesser sanctions are more likely, however, the newspaper reports.
Fairview Health Services, a nonprofit hospital chain, and Accretive Health have been under intense scrutiny since April, when Minnesota Attorney General Lori Swanson issued a six-volume report accusing the companies' employees of harsh tactics including demanding payments upfront from emergency room patients and pressing bedridden patients for money.
Patients were led to believe they would be denied medical care if they didn't pay in advance or settle previous debts, Swanson's reports says. A probe by the federal Centers for Medicare and Medicaid Services uncovered similar incidents, including a woman seeking treatment for a possible heart attack who was asked for $672, according to the Star Tribune.
Federal inspection documents obtained by the Star Tribune show that the hospital repeatedly violated government rules by subjecting patients and their relatives to "abuse and harassment" during bill-collection attempts in the emergency room, labor and delivery area and other wards.
The letters are sent by the thousands to people across the country who have written bad checks, threatening them with jail if they do not pay up.
They bear the seal and signature of the local district attorney’s office. But there is a catch: the letters are from debt-collection companies, which the prosecutors allow to use their letterhead. In return, the companies try to collect not only the unpaid check, but also high fees from debtors for a class on budgeting and financial responsibility, some of which goes back to the district attorneys’ offices.
Debt collectors have come under fire for illegally menacing people behind on their bills with threats of jail. What makes this approach unusual is that the ultimatum comes with the imprimatur of law enforcement itself — though it is made before any prosecutor has determined a crime has been committed.
Prosecutors say that the partnerships allow them to focus on more serious crimes, and that the letters are sent only to check writers who ignore merchants’ demands for payment. The district attorneys receive a payment from the firms or a small part of the fees collected.
“The companies are returning thousands of dollars to merchants that is not coming at taxpayer expense,” said Ken Ryken, deputy district attorney with Alameda County.
Consumer lawyers have challenged the debt collectors in courts across the United States, claiming that they lack the authority to threaten prosecution or to ask for fees for classes when no district attorney has reviewed the facts of the cases. The district attorneys are essentially renting out their stationery, the lawyers say, allowing the companies to give the impression that failure to respond could lead to charges, when it rarely does.
“This is guilty until proven innocent,” said Paul Arons, a consumer lawyer in Friday Harbor, Wash., about two hours north of Seattle.
