[Senate Hearing 112-911]
[From the U.S. Government Publishing Office]
S. Hrg. 112-911
ENSURING PATIENTS' ACCESS TO CARE AND
PRIVACY: ARE FEDERAL LAWS PROTECTING PATIENTS?
=======================================================================
FIELD HEARING
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
ON
EXAMINING ENSURING PATIENT'S ACCESS TO CARE AND PRIVACY, FOCUSING ON
WHETHER OUR FEDERAL LAWS ARE DOING ENOUGH TO PROTECT PEOPLE WHEN THEY
ARE MOST VULNERABLE, WHEN THEY ARE SICK AND IN NEED OF MEDIAL CARE
__________
MAY 30, 2012 (St. Paul, MN)
__________
Printed for the use of the Committee on Health, Education, Labor, and
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
TOM HARKIN, Iowa, Chairman
BARBARA A. MIKULSKI, Maryland MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon JOHN McCAIN, Arizona
AL FRANKEN, Minnesota PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island MARK KIRK, Illinois
RICHARD BLUMENTHAL, Connecticut
Daniel E. Smith, Staff Director
Pamela Smith, Deputy Staff Director
Frank Macchiarola, Republican Staff Director and Chief Counsel
(ii)
C O N T E N T S
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STATEMENTS
WEDNESDAY, MAY 30, 2012
Page
Committee Member
Franken, Hon. Al, a U.S. Senator from the State of Minnesota..... 1
Witnesses--Panel I
Swanson, Lori, Attorney General, State of Minnesota, St. Paul, MN 3
Prepared statement........................................... 6
Rothman, Michael, Commissioner of Commerce, State of Minnesota,
St. Paul, MN................................................... 9
Prepared statement........................................... 11
Witnesses--Panel II
Mooty, Charles, Chairman of the Board of Directors and Interim
CEO, Fairview Health Services, Minneapolis, MN................. 18
Prepared statement........................................... 19
Kazarian, Gregory, Senior Vice President, Accretive Health, Inc.,
Chicago, IL.................................................... 20
Prepared statement........................................... 22
Witnesses--Panel III
Deb Waldin, Former Fairview Patient, Edina, MN................... 40
John Thomas ``Tom'' Fuller, Former Fairview Patient, New
Brighton, MN................................................... 42
Witnesses--Panel IV
Ross, Jean, RN, Former Nurse at Fairview; Co-President, National
Nurses Association; Member, Minnesota Nurses Association, St.
Paul, MN....................................................... 44
Prepared statement........................................... 45
Goodwin, Michele, Everett Fraser Professor in Law, University of
Minnesota, Minneapolis, MN..................................... 46
Prepared statement........................................... 48
Curtis, Jessica L., J.D., Director, Hospital Accountability
Project, Community Catalyst, Boston, MA........................ 52
Prepared statement........................................... 53
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Nina Bugbee, RN, President, Teamster Local Union 332, Flint,
MI......................................................... 69
Laurence J. Massa, President, Minnesota Hospital Association,
St. Paul, MN............................................... 74
Letters to Senator Franken from:
Greg Kazarian, Accretive Health.......................... 76
(iii)
Linda Hamilton, RN, BSN, President, Minnesota Nurses
Association (MNA)...................................... 76
Michele Manion, Executive Director, Primary Ciliary
Dyskinesia (PCD) Foundation and Cynthia Le Mons,
Executive Director, National Urea Cycle Disorders
Foundation (NUCDF)..................................... 77
Response to questions of Senator Franken by:
Lori Swanson............................................. 78
Michael Rothman.......................................... 79
Charles Mooty............................................ 89
Gregory Kazarian......................................... 90
Jean Ross, RN............................................ 99
Michele Goodwin.......................................... 100
Jessica L. Curtis, J.D................................... 101
ENSURING PATIENTS' ACCESS TO CARE AND PRIVACY: ARE FEDERAL LAWS
PROTECTING PATIENTS?
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WEDNESDAY, MAY 30, 2012
U.S. Senate,
Committee on Health, Education, Labor, and Pensions,
St. Paul, MN.
The committee met, pursuant to notice, at 10 a.m. in
Hearing Room 15, Minnesota State Capitol, Rev. Dr. Martin
Luther King Jr. Blvd., Hon. Al Franken presiding.
Present: Senator Franken.
Opening Statement of Senator Franken
Senator Franken. This field hearing of the Senate Health,
Education, Labor, and Pensions Committee will be called to
order.
This hearing will focus on whether our Federal laws are
doing enough to protect people when they are at their most
vulnerable, when they are sick and in need of medical care.
Being in the hospital, even under the best of circumstances, is
a stressful experience. When you or someone you love is in
urgent need of care, nothing else matters. I think everyone has
had the experience of powerlessness and vulnerability when
you're in pain and you don't know what's wrong, or when your
child or your parent or your spouse is hurting, and at that
moment the last thing on your mind is your wallet.
That's why I found Attorney General Lori Swanson's report
about Accretive's alleged activities at Fairview extremely
disturbing. I would find it absolutely abhorrent if any
patients had been badgered by debt collectors in the emergency
room or if any patients had been given the impression that they
wouldn't be seen unless they pre-paid for their care. That type
of activity is not acceptable anywhere, and is certainly not
acceptable here in Minnesota.
I've read that patients in extreme pain were asked for
payment for health services in Fairview's emergency room before
they even knew what was wrong with them, and I've heard that
parents of premature infants were approached about their bills
while they were in the neonatal intensive care unit. I've even
heard that offsite debt collectors had access to detailed
protected health information about patients, including their
mental health conditions and other diagnoses, which may be in
violation of Federal privacy laws.
And I'm worried. I'm worried that if patients know they'll
be asked for pre-payment of services, that they'll stop going
to the emergency room when they're sick, which isn't just
dangerous for them but could result in the spread of disease
and in entire communities getting sick. And I'm worried that if
patients hear that their protected health information isn't
going to be kept private, that they won't share important
information with their doctors such as what medications they're
taking, and that could lead to even worse health problems and
higher costs if doctors don't have the information that they
need.
I'm worried that activities like the ones that have been
alleged could bring down the quality of health care that
Minnesotans receive when they go to the hospital, and that
would be a real tragedy. Our State has always been a national
leader in providing high-quality health care, and Fairview
Health Services is a prime example. I visited Fairview Hospital
many times and I've spoken at length with their doctors and
their nurses. I'm convinced that they are among the best health
care providers anywhere, and I think we'll hear from people
today who will bear that out.
But I also know that there's another part of the equation
dealing with the administrative side of things, and so I look
forward to working with Fairview and all of Minnesota's health
care leaders to make sure that patients are fully protected.
It's possible that the laws that protect consumers from
debt collection and those that protect our privacy don't go far
enough, and although we're still getting all the facts about
the activities that may have taken place, I look forward to
hearing from our experts about whether we need to strengthen
the laws that protect us when we are at our most vulnerable.
Before we can move forward in strengthening our patient
protections, we need to understand what took place, and that's
why I've called this hearing and asked our witnesses to testify
today, because I want to hear all sides of the story. I'm not
here to sit as judge or jury. I'm not here to resolve the
dispute between Accretive and the attorney general. That will
be left to the court system.
But I do want to find out what happened the best that I
can, how patients were affected and whether existing laws are
doing enough to protect Minnesotans when they go to the
hospital. Take the Health Insurance Portability and
Accountability Act, or HIPAA, for example. That law is intended
to protect both the privacy and the security of patients'
sensitive health information. In this case, though, nobody
disputes that data from more than 20,000 Minnesota patients
were compromised, and it appears that debt collectors had
access to more protected health information than they needed to
perform their jobs.
So that raises questions for lawmakers. Does HIPAA need to
be strengthened? Does it require clarification? Is it being
enforced adequately?
Take the Fair Debt Collection Practices Act as another
example. That statute puts in place important protections for
consumers. It governs when and how debt collectors may approach
a person about a payment. But there's a dispute in this case as
to whether that law even applies to Accretive's alleged
activities. Again, it will be for a court to resolve that
dispute. But again, there are questions for lawmakers here. For
example, are Federal statutes sufficiently broad in their
coverage to protect Minnesotans from abusive debt collection
practices?
And finally, there is the Emergency Medical Treatment and
Active Labor Act of 1986, or EMTALA, as it is known, which was
put in place to prevent the practice of patient dumping, where
hospitals would turn patients away from the emergency room if
they were unable to pay for their care. The idea here was that
anyone who desperately needs help should get it regardless of
their ability to pay, and I think it is important to remember
the underlying goal of this law is to provide emergency care to
everyone who needs it.
I know that hospitals across the country are being squeezed
right now. Reimbursements are low. Costs are rising every year,
and budgets are tight for everyone, and hospitals, particularly
hospitals here in Minnesota which provide such high-value care,
deserve to be paid for the services they provide. But
especially in this time of economic hardship, we have to make
sure that those with the least voice are heard and that
patients aren't the unintended victims of budget shortfalls,
and that's what we'll be hearing about today, whether patients
are being protected and what we can do better to protect them.
Now I'd like to introduce our first panel of witnesses.
Lori Swanson is Minnesota's attorney general, the first
woman ever to hold that seat. She was elected in 2006 and re-
elected in 2010 and has been named one of the top 10 lawyers in
America by Lawyers USA in 2009. She previously served Minnesota
as Solicitor General and Deputy Attorney General.
Mike Rothman was appointed the Minnesota Commissioner of
Commerce in January 2011. Like the attorney general,
Commissioner Rothman has extensive experience with consumer
protection issues. Prior to his current role, Commissioner
Rothman was an attorney with Winthrop and Weinstein PA in
Minneapolis.
Thank you both for being here today. Please proceed with
your testimony.
First I would just like to take a moment to remind all
witnesses to stick to 5 minutes of testimony today, although,
as you know, you may submit your statements for the record. We
are going to have someone, Katherine here, holding up some time
warnings just to let you know, because we do have a lot of
witnesses today and we want to get through it.
Thank you, Attorney General Swanson, and please go ahead.
You can begin.
STATEMENT OF LORI SWANSON, ATTORNEY GENERAL OF THE STATE OF
MINNESOTA, ST. PAUL, MN
Ms. Swanson. Chairman Franken, thank you for expressing so
much concern and compassion for America's patients and for
holding this hearing, especially in Minnesota, where so many
patients and Minnesotans can have the opportunity to
participate.
Charitable health care organizations in Minnesota, get a
lot of breaks from the taxpayers in Minnesota. They don't pay
income taxes, sales taxes, property taxes. They get the
privilege of issuing tax-exempt bonds. Over the years, the
Office of the Minnesota Attorney General has had a strong focus
on whether charitable hospitals and health care organizations
in particular operate in a manner consistent with their
charitable tax-exempt status and duties.
Following a compliance review of Fairview in 2005, which
found that the hospital engaged in overly aggressive collection
practices, our office entered into a court order consent decree
with the hospital to reform and modify its billing and
collection practices. We entered into a similar consent order
with North Memorial, as well as other hospitals.
More recently we initiated a compliance review of both
Fairview and North Memorial to evaluate their compliance with
the consent decree, and also whether their conduct was
consistent with the duties and responsibilities of tax-exempt
charitable hospitals.
At Fairview, we examined the delegation of management
activities by a charitable hospital to Accretive Health, a for-
profit Chicago company. The Fairview compliance report is
complete, and one of your next witnesses is Chuck Mooty, the
Fairview chairman and soon-to-be incoming interim CEO. I have
worked with Mr. Mooty over the last several months and can tell
you that I believe he is in command in addressing our concerns
and has great concern and empathy and compassion for the
patients of Fairview.
The compliance review of North Memorial is under way.
The Fairview compliance review found that Accretive
repeatedly ignored the court order between the hospital and the
attorney general. This chart is an e-mail from an Accretive
manager asking its collectors to sign an agreement that they
were familiar with the court order, but then telling the
collectors don't worry, the court order won't change their
behavior anyway. It's just so we can say we have it.
This chart is a Fairview issues log from the very same
month, finding that Accretive tried to collect money from
patients who were current on their payment plans, that it sent
6,000 accounts to collections without ever having asked a
patient for payment first, and that it sat on 300 payments made
by patients, resulting in artificially high bills.
This chart is from a Fairview internal audit in May 2011
that found numerous violations by Accretive of the consent
decree.
This chart is a Fairview e-mail to Accretive from September
2011 advising Accretive that it was in violation of the consent
decree, that its action were resulting in numerous patient
complaints and confusion for patients and saying we're not
going to be able to keep doing business with you.
This chart is from another Fairview internal audit in
December 2011 concluding that Accretive continued to ignore the
consent decree and that it had violated the debt collection
laws and the patient privacy laws.
Senator, it's apparent from the compliance review that, No.
1, Accretive thought it was above the law; No. 2, that
Accretive's management contract unduly incentivized the company
to ignore the cultures and mission and duties and values of a
charitable hospital organization; and No. 3, that the hospital
was unable to restrain Accretive.
I'm going to focus, in the interest of time, in just one
area of the compliance review, and that's bedside collection
visits in the emergency room.
Mr. Chairman, 20 percent of Americans face a life-changing
event in an emergency room. It's where husbands lose their
wives, wives lose their husbands, kids lose their parents, and
parents lose their children. It's a place of both medical
trauma and emotional suffering. It is a solemn place, and it
should be and remain a very solemn place.
This chart shows that Accretive differentiates itself from
other companies with what it calls the Accretive secret sauce,
and it uses words very frankly, Senator, that are not befitting
for a hospital or an emergency room that are insulting to the
patients.
The document concedes that typical hospitals don't collect
money in the emergency room. It then describes, though, the
placement of collectors in the emergency room as one of
Accretive's secret sauce ingredients. Now, I've personally met
with about 25 patients who were hit up by the Accretive secret
sauce. My office has interviewed and spoken with many others.
About 20 of those patients and their families are sitting here
today behind me, and I want to thank them for coming and being
part of this hearing.
Senator, they are here because they don't want any other
patient in America to ever be subjected to the kind of tactics
to which they were subjected.
We have heard from patients who received bedside collection
visits in the emergency room while suffering from chest pain,
strokes, blood clots, labored breathing, diabetic attacks,
appendicitis, elevated heart rates, elevated blood pressure,
kidney stone attacks, disorientation, and even while
hemorrhaging blood. Some were asked to pay money while they
were in so much pain that they thought they were going to die.
Others were asked to pay money while dazed and confused and
disoriented. Some were asked to pay money while hooked up to
morphine drips, heart monitors, IVs, or with tubes shoved down
their throat.
Senator Franken. I'm sorry, Madam Attorney General, but we
are through with your 5 minutes. Could you wrap it up real
quick?
Ms. Swanson. Yes, I will wrap it up.
Many were laying undressed on a gurney in pain. Most had
insurance, yet they were still asked to find their credit cards
or checkbooks while suffering in the emergency room. Some were
over-charged because the secret sauce aimed high and demanded
that they pay too much money, and some had to fight for
refunds. Others were surprised to be stop-listed on early
morning hours before their surgery while weak and suffering.
Mr. Chairman, there is a time and a place to collect money,
but what these patients went through is not the right time or
the right place. Our office doesn't enforce EMTALA, but we do
regulate charitable organizations in Minnesota. Accretive's
management contract unduly incentivized the company to scorn
the culture, mission and values of a charitable hospital. It's
not appropriate for a management company to orchestrate this
type of collection conduct at a charitable hospital that
receives tax exemptions from the people of Minnesota. American
patients deserve better.
And, Mr. Chairman, I thank you again for holding this
hearing.
[The prepared statement of Ms. Swanson follows:]
Prepared Statement of Lori Swanson
i. introduction
I thank the Senate Committee on Health, Education, Labor, and
Pensions (``HELP'') and Senator Al Franken, for convening this
committee hearing today on the important issue of ensuring patients'
access to health care and protecting the privacy of patients' medical
information.
ii. the attorney general and charitable organizations
Charitable health care organizations in Minnesota benefit from tens
of millions of dollars annually through exemptions on property taxes,
sales taxes, and income taxes and their ability to issue tax-exempt
bonds. The Minnesota attorney general regulates charitable
organizations in the State of Minnesota. Most hospitals and health care
organizations in Minnesota are charitable institutions; as a result,
the Minnesota attorney general's office has had a strong historical
focus on whether Minnesota charitable hospitals and health care
organizations operate in a manner consistent with their charitable,
tax-exempt status, mission, and duties.
For example, one of the more significant cases in the history of
the Minnesota attorney general's office involved a compliance
examination and report on the Sister Elizabeth Kenny Foundation. The
Sister Kenny Foundation operated a nonprofit hospital in Minnesota to
treat and research polio. Former Minnesota attorneys general Miles Lord
and Walter Mondale commenced a review and issued a report exposing,
among other things, that a Chicago-based third party vendor had
overcharged and misled the charitable hospital. The report eventually
led to prosecutions of certain officers of the vendor and the
charitable organization. More recently, the Minnesota attorney
general's office issued compliance review reports of Allina Health
System, Medica Health Plans, HealthPartners, Blue Cross and Blue Shield
of Minnesota, and Fairview Health Services. A 2001 Compliance Review of
Allina Health System eventually led to the divestiture of Medica Health
Plans (an HMO) from its parent organization, Allina, and the removal of
directors and officers of the organization.
iii. the 2005 fairview compliance review report
In 2005, the office conducted a Compliance Review of Fairview
Health Services (Fairview). Among other things, the Compliance Review
Report found that Fairview had engaged in inappropriate and overly
aggressive collection practices. Like other hospitals at the time, it
also charged up to three times more for medical treatment to uninsured
patients than it charged to insurance companies for the same services.
After the Report was published, the office entered into an agreement
with Fairview to modify its billing and collection practices. The
agreement required Fairview to adhere to certain collection standards,
to develop internal collection and charitable giving policies at the
Board of Directors level consistent with the obligations of a
charitable organization receiving tax-exempt benefits, and for the
Board to annually review the hospital's collection and charity care
activities. The agreement required Fairview to have a zero tolerance
policy for abusive, harassing, or oppressive conduct, both by its own
employees and by third party vendors engaged in collections activity.
The agreement also required Fairview to charge uninsured patients no
more than it charged to the insurance company delivering the most
revenue to the hospital (e.g. which is typically the insurer that
negotiates the lowest prices from the hospital). The agreement was
filed as a Consent Decree in Ramsey County District Court. The Consent
Decree was renewed in 2007.
In 2005 and 2007, North Memorial Health Care (``North Memorial'')
signed similar Consent Decrees with the Minnesota attorney general.
iv. the 2012 fairview compliance review report; the north memorial
compliance review; and the accretive health lawsuit
In January 2012, the office filed a lawsuit against a vendor of
Fairview and North Memorial named Accretive Health, Inc., a Chicago-
based debt collection management company. The lawsuit relates to
violation of patient privacy rights and unlicensed and unlawful debt
collection activities. The lawsuit is in its early stages.
The attorney general's office also initiated compliance reviews of
Fairview and North Memorial to determine, among other things, if they
were in compliance with the Ramsey County District Court Consent Decree
and if their conduct was otherwise consistent with the duties and
responsibilities of a tax-exempt charitable health care organization in
the State of Minnesota.
As part of the Compliance Review of Fairview, the office reviewed
over 100,000 pages of documents from Fairview and Accretive. While the
Compliance Review of Fairview has been completed, we are still
conducting the review of North Memorial. North Memorial entered into a
revenue cycle agreement with Accretive in March 2011.
v. the 2012 compliance review findings relating to accretive's
management culture
The Fairview Compliance Review focused on the delegation of
management activities by a charitable hospital organization to
Accretive, a for-profit company. Fairview paid Accretive approximately
$100 million in 2011 to manage the Fairview employees who collect money
from patients and insurance companies and to provide certain
administrative services such as coding and transcription. Accretive
both assumed day-to-day management responsibility over the Fairview
employees who performed so-called ``revenue cycle'' functions and
embedded its own employees into Fairview facilities. Through its
embedded workforce, Accretive managed the hospital patient registrars.
The Compliance Review Report makes numerous findings. Among them is
that Accretive repeatedly ignored the Consent Decree between Fairview
and the Minnesota attorney general.
In April 2011, about 1 year after Accretive entered Fairview, an
Accretive manager had Accretive collectors sign an acknowledgment that
they received a copy of the Consent Decree's requirements. The
Accretive manager then said: ``Very little of this will drive collector
behavior--it's just so we can all say we have it.''
The same month, Fairview prepared an ``issues log'' of problems
with Accretive. Among other things, the log noted that Accretive had
tried to collect money from patients who were current on their payment
plans, referred 6,000 accounts to collections without ever having sent
the patient a letter requesting payment, and failed to timely credit
300 patient payments.
The next month, in May 2011 Fairview published an audit of
Accretive's lack of compliance with the Consent Decree. The audit found
numerous violations by Accretive, including that the company was not
familiar with the Consent Decree and Fairview's charity care policy,
did not halt collection efforts when patients asked for more
documentation, and did not send itemized statements to patients who
requested them. Accretive was copied on the audit.
In September 2011 Fairview again advised Accretive that it did not
comply with the Consent Decree or Fairview's charity care policies,
that Accretive targeted patients in payment plans with collection
notices and phone calls, and that Accretive's actions were ``resulting
in numerous patient complaints and confusion for patients.'' Fairview
told Accretive: ``Fairview cannot continue this relationship. . . .''
In December 2011, Fairview again audited Accretive. The audit
showed that Accretive continued to ignore the Consent Decree. The audit
noted violations of the Consent Decree, Federal debt collection laws,
State debt collection laws, and patient privacy laws.
It is apparent from the Compliance Review that: (1) Accretive
thought it was above the law, (2) Accretive's management contract
unduly incentivized Accretive to ignore the culture, mission, and
duties of a charitable hospital organization, and (3) the charitable
hospital organization was unable to restrain Accretive.
Because of the limited time allotted for testimony, I will focus on
just two areas of the Compliance Review Report:
1. Patients Are Not Told That Their Medical Data is Being Accessed
in Other Countries or Being Used to Predict Their Profitability.
Medical privacy is a bedrock principle of the doctor-patient
relationship. Over 2,500 years ago, the early Hippocratic Oath for
physicians provided: ``All that may come to my knowledge in the
exercise of my profession . . . I will keep secret and will never
reveal.'' Patient confidentiality encourages a full and frank exchange
of information between patients and their doctors.
The Minnesota Supreme Court has recognized the right to privacy
like this:
``The right to privacy is an integral part of our humanity;
one has a public persona, exposed and active, and a private
persona, guarded and reserved. The heart of our liberty is
choosing which parts of our lives shall become public and which
parts we shall hold close.''
Lake v. Walmart Stores, Inc., 582 N.W.2d 231 235 (Minn. 1998.)
Accretive's treatment of patient privacy is disturbing. Its own
records describe ``Common Accretive HIPAA Incidents'' to include
``[l]aptops, unencrypted e-mails, too much access.''
In the fall of 2011 Minnesota newspapers reported that a laptop
with patient data was stolen out of a car in the Seven Corners district
of Minneapolis. The laptop belonged to an Accretive employee and was
left in his rental car. The laptop had patient data on over 23,000
patients of Fairview and North Memorial, as well as data from St.
John's Hospital in Detroit, MI (part of Ascension Health).
The Compliance Review Report includes a copy of a screen shot
provided to a Fairview patient who asked what information about her was
on the stolen laptop. The information on the laptop included, among
other things, her name, social security number, a numeric score to
predict the ``complexity'' of the patient, a numeric score to predict
the probability of an inpatient hospital stay, the dollar amount
``allowed'' to the patient's provider, whether the patient is in a
``frail'' condition, and fields to denote whether the patient had any
of 22 chronic medical conditions, including bipolar disorder,
depression, HIV, or schizophrenia.
Accretive employees embedded at hospital facilities operate largely
on laptop computers, some of which are left in plain sight in cars and
some of which were never encrypted. Accretive acknowledges that its
laptops often contain ``tons of patient health and financial
information.''
As it turns out, a year before the Accretive employee described
above left his laptop (with information on 23,000 Minnesota patients)
in the car, another Accretive employee working for Fairview also had a
laptop stolen out of his rental car while having dinner at a
restaurant. Accretive did not notify Fairview at the time that the
laptop had been stolen. Fairview learned of the compliance breach
through anonymous tips. Fairview questioned whether the second stolen
laptop containing its patient data could have been prevented if
Accretive had informed Fairview about the first stolen laptop 13 months
earlier.
In February 2011 Accretive management stated that there had been
four ``smash and grabs,'' or computers stolen out of employee cars, in
the last 3 months alone.
On May 11, 2012 Accretive told Senator Franken's office that the
company had experienced nine stolen laptops.
It told my office in March 2012 that it found 32 unencrypted
laptops.
The Compliance Review Report documents other troubling findings
about how Accretive handles private medical data.
Patients were not told that their patient data is being used and
accessed by Accretive.
A Fairview audit from December 2011 found that Accretive did not
properly encrypt e-mails that contained patients' private information.
Fairview patient health information was accessed and used by
Accretive collectors in Kalamazoo, MI. It was accessed by Accretive
``revenue cycle'' employees embedded at Fairview.
Accretive also engaged in extensive ``data mining'' and ``consumer
behavior modeling'' using patient data. For instance, company indicates
that it develops a ``Willingness to Pay'' score about patients using
approximately l40 ``data elements'' obtained from client hospitals. An
e-mail from one company manager stated that the ``Willingness to Pay''
score contains various elements, including patients' religion, gender,
and marital status.
Accretive allowed employees at its business office in New Delhi,
India to access Fairview patient data. One of Accretive's clients
uncovered a password sharing breach in India, according to the
company's records.
Patients are not aware that their data was being sent to Accretive
offices or that it was accessed out-of-state in Michigan or overseas in
India. Patients were not advised that Accretive would use their patient
health data for collection purposes, to calculate the likely
profitability of their future treatment, or to develop ``Willingness to
Pay'' scores.
Mr. Chairman, the American people deserve better.
2. Accretive Turned the Attorney General Consent Decree on its Head
by Orchestrating Bedside Collection Visits in Hospital Emergency Rooms
and Using Surprise ``Stop Lists'' to Collect Money From Medically
Distressed Patients on the Morning of Their Surgery.
An estimated 20 percent of Americans face a life-changing event in
the Emergency Room. It is a place where husbands lose wives, wives lose
husbands, parents lose children, and children lose parents. It is a
place of medical trauma and emotional suffering, both for patients and
their families. It is and should be a solemn place.
The Compliance Review Report includes a document prepared by
Accretive which identifies how it differentiates itself from other
companies. Encapsulating the culture of Accretive, the chart refers to
its method as the ``Accretive Secret Sauce,'' saying on the cover page:
``Check out our ASS!'' and ``You've never seen ASS like ours!''
The ``Accretive Secret Sauce'' concedes that ``a typical hospital''
does not collect money from patients in the Emergency Room. By
contrast, one of Accretive's ``Secret Sauce'' devices is to place
collectors into Emergency Rooms.
Our Compliance Review Report found a culture clash between
Accretive's ``Secret Sauce'' and its self-described ``numbers driven
culture,'' on the one hand, and the mission and duties of a charitable
hospital, on the other hand. Accretive--which was responsible for day-
to-day management of the hospital revenue cycle employees--publicized
quotas for how much money hospital registration staff had to collect
from patients, publicized who among individual patient registrars was
ahead and who was behind in the ``race'' to collect, incentivized
hospital employees to collect more money with prizes and gifts, and
promised to dress up as clowns or turkeys or to shave their head if
hospital patient registrars met their collection quotas.
The ``Secret Sauce'' drove a culture of aggressive collections from
medically distressed patients. As one Fairview employee said in a 2010
survey finding 40 percent of Fairview staff to be uncomfortable with
the collection activity: ``As far as the Accretive initiatives, all we
really know is that it is about money and how much we can collect.''
We have heard from patients who had insurance, but were still asked
to take out their credit cards or checkbooks while suffering on
Emergency Room gurneys.
We've heard from patients who were overcharged because the
Accretive ``Secret Sauce'' aimed high and demanded that patients pay
too much money.
We've heard from patients who had to fight for refunds.
We've heard from patients who were surprised to be stop listed in
the early morning hours before their surgery, hit up to pay while weak
and suffering before their treatment at a time of medical distress and
high angst.
We've heard from patients who received a bedside collection visit
in the Emergency Room. Some of these patients were asked to pay money
while writhing in pain. Others were asked to pay money while
disoriented on pain medication. Most of these patients were on a gurney
in various stages of undress. In some cases, the collectors had to
bring them their wallet from their pants, and in other cases patients
had to haggle over their ability or need to pay the bill.
As noted above, the Ramsey County District Court Consent Decree
requires Fairview to have a zero tolerance policy for abusive,
harassing, or oppressive collection conduct, whether by its own
employees or by third parties engaged in collections activity. When
three doctors said in March 2011 that the collection activity was
generating complaints and turning patients away, a top Accretive
executive at Fairview trivialized their concerns as ``country club''
talk.
Our office does not enforce the Emergency Medical Treatment and
Active Labor Act (EMTALA). We do enforce the charitable organization
laws in Minnesota. Accretive's management contract unduly incentivized
the company to ignore the culture, mission, and duties of the
charitable hospital. It is not consistent with the mission and duties
of a charitable hospital organization that receives tax exemptions from
the citizens of Minnesota for a management company to orchestrate this
type of collection conduct toward Minnesota patients.
Senator, I thank you for hosting this hearing. I am particularly
pleased that the hearing was located in St. Paul, where Minnesotans can
participate and see their government at work.
Senator Franken. Thank you, Attorney General Swanson.
Commissioner Rothman, please go ahead with your testimony.
STATEMENT OF MICHAEL ROTHMAN, COMMISSIONER OF COMMERCE OF THE
STATE OF MINNESOTA, ST. PAUL, MN
Mr. Rothman. Thank you, Mr. Chair. My position as
commissioner comes with important responsibilities of
protecting consumers and the public interest. Specific to
today's hearing, the Commissioner of Commerce has the powers
and duties and responsibilities under Minnesota law to regulate
collection agencies.
Under Minnesota law, any collection agency doing business
in Minnesota first must be licensed by the Department of
Commerce, a collection agency must be a financially responsible
entity, and any person wishing to act as a debt collector in
Minnesota must register with the Department.
Minnesota law also sets forth a regulatory scheme for debt
collection practices and activity. To maintain licensure and
compliance with State regulations, no collection agency or
collector shall engage in any of the following prohibited
practices, among others: use or threaten to use methods of
collection that violate Minnesota law; communicate with
consumers in a misleading or deceptive manner by using
instruments which simulate the form and appearance of judicial
process; violate any of the provisions of the Fair Debt
Collection Practices law, the Federal law; in collection
letters or publications or in any communication, oral or
written, imply or suggest that health care services will be
withheld in an emergency situation; when attempting to collect
a debt, fail to provide the debtor with the full name of the
debt collection agency as it appears on their license.
The public has entrusted the Department to enforce these
regulations, and law-abiding debt collectors rely on us to
ensure fair competition in the marketplace. These laws and our
consistent enforcement of them are a crucial line of defense
for Minnesotans, meant to protect their rights and dignity.
The protections are particularly important for the most
vulnerable among us, the poor, the sick, the disabled, the
elderly, and those facing urgent health care needs. When our
Department receives complaints about unlicensed collection
activity or other consumer issues, our staff works to carefully
determine the merit of the complaints. When warranted, the
Department's review may move to the stage of a formal and
comprehensive investigation which may result in consent orders,
formal statement of charges, administrative hearings, or
settlements.
With respect to Accretive Health, the Commerce Department
has begun a thorough investigation of allegations that the
company and its employees were conducting prohibited collection
activity and had allegedly gone to great lengths to disguise
its role as a collection agency from consumers. I directed the
Enforcement Division at the Department to look into these
allegations to determine their merit and pursue a formal
investigation.
Allegations investigated by the Department were based on
the extensive complaint filed by the attorney general. These
allegations of unlicensed activity and prohibited collection
practices raised serious concerns, and the Commerce Department
exercised its regulatory authority to promptly put a stop to
this activity in Minnesota.
After an initial investigation, I signed a consent cease
and desist order on February 3, 2012 that was agreed to by
Accretive Health to summarily terminate any further collection
activity until its collection practices came into full
compliance with Minnesota law. Specifically, the consent order
directed Accretive to, first, cease and desist from any further
activity requiring a collector's license in Minnesota until it
meets certain specific conditions, including full compliance
with Minnesota law; second, to provide copies of documents and
evidence regarding communications provided to debtors in their
attempts to collect debts, their screening process for hiring
employees, training materials, and the policies and procedures
for protecting personal information.
The cease and desist order agreed to by Accretive Health
was an important first step in ensuring the full protection of
Minnesota consumers in response to these troubling allegations.
We have a continuing full and detailed investigation. The
details relating to this ongoing investigation are classified
as private until the investigation is complete in accordance
with Minnesota Chapters 13 and 45 under our statutes. The
investigation will require, though, the full cooperation of
Accretive Health.
False and deceptive collection practices from any collector
or collection agencies, licensed or unlicensed, will not be
tolerated on my watch. I want to make it clear that to the
extent the evidence collected in our investigation
substantiates these allegations, such allegations would
represent a severe and troubling disregard for consumer rights
and a clear violation of Minnesota law.
Mr. Chair, I appreciate the time. We take all our
responsibilities seriously, and I am pleased to answer any
questions.
[The prepared statement of Mr. Rothman follows:]
Prepared Statement of Michael Rothman
Good morning. Chairman Franken and members of the committee, my
name is Mike Rothman, and I am the commissioner of the Minnesota
Department of Commerce serving for Governor Mark Dayton. Thank you for
the opportunity to testify today on Accretive Health, Inc.
i. department jurisdiction
The Minnesota Department of Commerce has a broad and diverse
jurisdiction, serving as the State's regulator of financial
institutions, real estate sector, securities and investments, insurance
products and producers, weights and measures, the energy sector,
telecommunications, and other business sectors. My position as
commissioner comes with the important responsibilities of protecting
Minnesota consumers, and safeguarding the public interest.
Specific to today's hearing, the commissioner of commerce has the
powers, duties and responsibilities under Minnesota law to regulate
collection agencies, including the licensing of debt collection
companies, registration of individual debt collectors, and regulation
of the eligibility and activities of collection agencies and their
collectors pursuant to Minnesota Statutes Section 332.
Under Minnesota law, any collection agency wishing to do business
in Minnesota first must be licensed by the Department of Commerce. A
collection agency must be a financially responsible entity and ensure a
proper screening process for its collectors to verify eligibility. Any
person wishing to act as a debt collector in Minnesota must also
register with the Department.
Minnesota law also sets forth a regulatory scheme for debt
collection practices and activity. Pursuant to Minnesota Statutes
Section 332.37, to maintain licensure and compliance with State
regulations no collection agency or collector shall engage in any of
the following prohibited practices, among others:
(3) use or threaten to use methods of collection that violate
Minnesota law; . . .
(5) communicate with consumers in a misleading or deceptive
manner by using . . . instruments which simulate the form and
appearance of the judicial process; . . .
(12) violate any of the provisions of the Fair Debt
Collection Practices Act of 1977, Public Law 95-109, while
attempting to collect on any account, bill or other
indebtedness; . . .
(14) in collection letters or publications, or in any
communication, oral or written, imply or suggest that health
care services will be withheld in an emergency situation; . . .
(16) when attempting to collect a debt, fail to provide the
debtor with the full name of the collection agency as it
appears on its license; . . .
(21) when initially contacting a Minnesota debtor by mail,
fail to include a disclosure on the contact notice, in a type
size or font which is equal to or larger than the largest other
type of type size or font used in the text of the notice. The
disclosure must state: ``This collection agency is licensed by
the Minnesota Department of Commerce.''
The Minnesota Department of Commerce takes these and other laws
regulating debt collection activity very seriously. The public has
entrusted the Department to enforce these regulations, and law-abiding
debt collectors rely on us to ensure fair competition in the
marketplace. These laws, and our consistent enforcement of them, are a
crucial line of defense for Minnesotans, meant to protect the rights
and dignity of consumers. The protections are particularly important
for the most vulnerable among us: the poor, the sick, the disabled, and
the elderly.
When our Department receives complaints about unlicensed collection
activity, harassment of consumers, violations of consumer rights, or
violations of the Fair Debt Collection Practices Act, our staff works
to carefully determine the merit of these complaints. When warranted,
the Department's review may move to the stage of a formal,
comprehensive investigation.
If I as commissioner determine, based on the evidence of our
investigations, that there has been a violation of the law, I reserve
the authority to impose a civil penalty of up to $10,000 per violation
and/or revoke or suspend an agency license or collector registration.
If the Department's investigation reveals allegations of criminal
activity, the Minnesota Department of Commerce may refer the case to
local, State, or Federal law enforcement authorities for further
investigation and criminal prosecution.
ii. recent enforcement actions
The Department has taken a number of actions in response to serious
allegations in the debt collection industry. For example, in October
2011, I signed consent orders involving eight Minnesota collection
agencies that allegedly: (1) hired convicted felons; (2) harassed
consumers; (3) forged signatures; (4) failed to properly report
instances of criminal identity theft; and (5) doctored financial
documents. In February 2012, the Department took action against 49 debt
collection agencies nationwide based on allegations that their parent
company failed to properly screen employees and employed known felons.
In addition, the Minnesota Department of Commerce engaged in
discussions and worked with the collections industry during the 2012
Minnesota Legislative Session to address underlying issues that have
led to recent compliance and other regulatory issues. Working together,
we clarified and strengthened laws to improve collector screening
processes and achieved other important reforms.
iii. initial investigation
In light of its regulatory responsibilities, the Minnesota
Department of Commerce has begun a thorough investigation of
allegations that Accretive Health, Inc. was conducting unlicensed and
prohibited collection activity in the State of Minnesota and had
allegedly gone to great lengths to disguise its role as a collection
agency from consumers. I directed our Enforcement Division to look into
these allegations, determine whether they had any merit, and pursue a
formal investigation.
Allegations investigated by the Minnesota Department of Commerce
were based on an extensive complaint filed in U.S. District Court by
the Minnesota Office of the Attorney General in January 2012. The
Attorney General's complaint included allegations that Accretive
Health, Inc. committed the following wrongful conduct:
1. Failed to implement policies and procedures to prevent,
detect, contain and correct data security violations of 45 CFR
164.308(a)(1) and the Minnesota Health Records Act, Minn.
Stat. 144.293, in violation of Minn. Stat. 45.027, subd. 7;
2. Engaged in a practice of allowing unregistered persons to
act as debt collectors in violation of Minn. Stat. 332.33;
3. Failed to provide proper notice to Minnesota debtors in
violation of Minn. Stat. 332.37;
4. Used false, deceptive, or misleading representations or
means in connection with the collection of debts in violation
of the Fair Debt Collection Practices Act, 15 U.S.C. 1692e and
Minn. Stat. 332.37; and
5. Used unfair or unconscionable means to collect or attempt
to collect debts in violation of Minn. Stat. 332.33.
These allegations of unlicensed activity and prohibited collection
practices raise serious concerns, and the Minnesota Department of
Commerce promptly exercised its regulatory authority to effectively put
a stop to this activity in Minnesota. After an initial investigation, I
signed a Consent Order (``Consent Order'') on February 3, 2012, that
was agreed to by Accretive Health, Inc. to summarily terminate any
further collection activity until its collection practices came into
full compliance with Minnesota law. Specifically, the Consent Order
directed Accretive Health, Inc. to do the following:
1. Cease and desist from any further activity requiring a
collector's license in Minnesota until:
a. The company provides at least 10 days prior notice to
the commissioner of its intent to resume licensed collector
activity; and
b. The company files with the commissioner an affidavit
signed by an officer authorized by the company to sign on its
behalf that Accretive is in compliance with Minnesota debt
collection laws.
2. Provide a copy of all letters and notices, including
dunning notices or other communications, provided to debtors in
their attempts to collect debts from Minnesota consumers;
3. Provide its debt collector screening process to the
Department;
4. Provide all collector training materials;
5. Provide all policies and procedures for protecting and
safeguarding of consumers' personal information; and
6. Provide any and all other documents requested by the
Department.
iv. ongoing investigation
The Consent Order agreed to by Accretive Health, Inc. was an
important first step in ensuring the full protection of Minnesota
consumers in response to these troubling allegations. Our Enforcement
Division is continuing a full and detailed investigation of these
allegations: to determine their merit, to identify any violations of
State or Federal law, and to take appropriate and decisive action to
enforce the law and correct and appropriately penalize any unlawful
wrongdoing.
Under Minnesota Statutes section 13.39, the details relating to an
ongoing investigation are classified as confidential until the
investigation is no longer active. This ongoing investigation will
require the full cooperation of Accretive Health, Inc.
v. severity of allegations
False and deceptive collections practices from any collector or
collection agency--licensed or unlicensed--will not be tolerated on my
watch. I want to make it very clear that to the extent that the
evidence collected in our investigation substantiates these
allegations, such actions would represent a severe and troubling
disregard for consumer rights and a clear violation of both State and
Federal law.
As I stated earlier, I take our Department's regulatory
responsibilities very seriously. As Commerce commissioner, I will not
allow the rights of consumers to be violated. The public, consumers and
businesses alike, have entrusted us to fairly and consistently enforce
the law. It is our responsibility and our charge to carefully review
these allegations, investigate the matter fully, make an objective
determination, and enforce the full measure of the law.
vi. conclusion
The Minnesota Department of Commerce is committed to protecting
consumers and the public interest, and to working with the debt
collection industry to ensure a fair marketplace. Mr. Chair and members
of the committee, thank you for inviting me to speak with you here
today. I would be pleased to answer your questions.
Senator Franken. Thank you, Commissioner Rothman.
Attorney General Swanson, thank you for your testimony and
for providing us with background on your investigation, which
has garnered quite a bit of attention. I think that's probably
because just about everyone needs medical attention at some
point in his or her life, so these issues affect all of us.
I know you've worked extensively with non-profit hospitals
across the State and, as you noted in your report and in your
testimony, non-profit hospitals qualify for exemptions from all
these different taxes that you laid out. In order to qualify
for these tax exemptions, non-profit hospitals are subject to
specific Federal and State requirements.
Could you tell us about the agreements that you developed
with hospitals across the State to make sure they're providing
a benefit to the community?
Ms. Swanson. Yes. Thank you, Chairman Franken.
In 2005, I think every single charitable hospital in
Minnesota signed an agreement with the attorney general's
office, which was then renewed in 2007 and which we are in the
process of renewing again for a 5-year period. That agreement
was entered into after we did a compliance review that found
troubling conduct, overly aggressive collection practices, and
the agreement requires that hospitals have in place charity
care policies and collection policies. They are to be approved
at the board of directors level, making sure that in exchange
for these significant breaks the hospitals do good, provide
charity care to the poor and make sure people can still get
their treatment.
It requires the hospitals to undertake periodic audits of
both their internal and their external collection practices to
make sure those practices are in accord with various detailed
written standards of our agreement, as well as to make sure
those practices are in accord with the hospital's own policies.
The agreements also prohibit both internal and external
third-party vendors from engaging in aggressive, harassing,
abusive collection practices. The intent of the agreements
were, No. 1, to make sure that hospitals were using what I call
kinder, gentler debt collection practices, recognizing that
hospital bills are different than other kind of debt and that
people are often--if you're sick, you need treatment, and
especially in troubling economic times not everybody can pay
for that treatment immediately.
Also the agreements require hospitals to charge the
uninsured the same price they charge to insurance companies for
the same treatment. Up until the time of that agreement,
hospitals were charging uninsured patients three or four times
more than insurance companies for the exact same treatment. You
had this perversity where patients paid an artificially high
sticker price if they had no insurance that nobody else paid.
The Government didn't pay it. Insurers didn't pay it.
I think that the agreement really reflects what are
community standards in our State and would, frankly, be good
policy for Congress to look at for the whole country.
Senator Franken. What was Accretive's responsibility as a
for-profit company contracting with Fairview, a non-profit
hospital, to comply with this agreement? Do you believe that
Accretive violated your agreements, the AG agreements with
Fairview and others?
Ms. Swanson. Yes. Chairman Franken, Accretive specifically
contracted with Fairview that it would be in compliance with
all aspects of our agreement. That was something that Fairview
wrote into the agreement with Accretive, which is, you have to
honor and comply with the attorney general agreement.
As I've pointed out, Fairview engaged in a variety of
audits and was repeatedly warning Accretive that they were in
violation of the hospital agreement and that Fairview wasn't
going to stand for that violation. In many, many ways, they
violated the hospital agreement, and we've laid that out in a
whole separate volume of our report.
Senator Franken. Do you believe that Accretive's activities
at Fairview created a culture conflict with the kind of
quality-driven culture that we expect from health providers
here in Minnesota?
Ms. Swanson. Chairman Franken, I do. One of the things that
became very apparent during the compliance review is that
Fairview has good doctors, good nurses, people who are very
compassionate and view their work as almost missionaries to
take care of the sick, the infirm and the ill. A charitable
hospital, and especially an emergency room, should be a
sanctuary to take care of people at the worst time in their
life. I think that's certainly the values that have been
expressed by the care providers at Fairview.
On the other hand, Accretive is a for-profit, Wall Street,
money-making company. It wanted to create a numbers-driven
culture at Fairview. We have a document in our report that says
that we want it to be numbers driven. The problem, Senator, is
that health care isn't about numbers. It's about patients. It's
about the patients sitting behind me today who experienced very
tough times in their life and had a collector visit them in the
emergency room, and that created a collision in values, the
culture of a non-profit charitable institution on the one hand,
and the culture of a very hyper-aggressive collection
enterprise on the other.
Senator Franken. Well, it seems to me that hospitals are
also in a tough situation. The cost of health care is
increasing. Hospitals are being squeezed on the revenue side,
and at the end of the day they're operating on a very thin
margin. Hospitals have to find a way to collect the money
that's owed to them, and I'm sure you'd agree.
Collecting payment from patients at the time they get care
is one way to do it. A recent article in Forbes says,
``Increasing point-of-service collection has become a major
weapon in the health care industry arsenal to bring bad debt
under control.'' But the same article criticized your
investigation into Accretive, saying that you were erroneously
attacking an important billing practice.
How would you respond to that criticism? Are you concerned
with point-of-service practices generally, or is your concern
with the way they were implemented in this particular case?
Ms. Swanson. Chairman Franken, there is a time and a place
for hospitals to collect money. There's a right way to do it
and a wrong way to do it. What Accretive orchestrated at
Fairview is the wrong way to do it.
Hitting up patients in their bedside gurney in various
stages of undress where they're hooked up to morphine drips or
have feeding tubes shoved down their throats is not the time
and the place to collect money. This is a time of medical
distress. It's a time of trauma. Some of the patients who were
hit up in the emergency room hadn't yet been on pain medication
and they were, as I mentioned, in so much pain they literally
thought they were going to die.
Other patients, on the other hand, were hooked up to
morphine drips and they were groggy, confused, disoriented, and
the way that this company orchestrated the collection campaign
was not the time and the place to collect money.
Other times patients were stop-listed early in the morning,
before surgeries. They were told don't eat, don't drink for 12
hours. They got up at 3 a.m. to leave their house, came to the
hospital at 5 for very, very important surgeries, only to be
surprised to be stop-listed and told, ``We need your credit
card right now before you move ahead,'' at a time that they
were weak and frail and suffering and groggy. That is not the
time and the place to collect money.
We have not tried through this compliance report to draw
all the boundaries for point-of-service collections, but I can
tell you the kinds of activity that we've outlined I don't
believe is consistent.
Senator Franken. Attorney General Swanson, I believe that
when patients' privacy is violated, everyone is harmed. If
patients can't trust that their health information will remain
private, they will be less likely to tell their doctors what
conditions they have and what medications they are taking.
In Volume 4 of your compliance report, you talk about the
importance of privacy. You say that patients are less likely to
be candid with their doctors if they think their information
isn't private.
What sort of protections are in place to protect patients'
privacy, and are those protections adequate?
Ms. Swanson. Chairman Franken, privacy is a bedrock
principle of the doctor-patient relationship. Twenty-five-
hundred years ago, the Hippocratic oath for doctors said,
``That which I shall learn in the carrying out of my profession
I will keep secret and never reveal,'' the idea being that
patients need to know their information is kept sacrosanct,
that it's going to be treated confidentially. I know that's
been a concern of many of the patients that have come forward
to our office, that they were concerned about their privacy.
Chairman Franken, one of the things we've seen in our
compliance report, we have a screenshot of the information
about a particular patient who was on the laptop computer, and
it lists her name and Social Security number on the laptop,
whether she has any of 22 chronic medical conditions, including
HIV, schizophrenia, bipolar disorder, whether she is depressed,
what is her likelihood of future hospital treatment, is she
frail.
In another example in our report, we have a screenshot of
the type of information that could be collected or accessed by
the Kalamazoo, MI debt collectors of Accretive, and this
particular screenshot is a fellow who was depressed and
attempted suicide by cutting his wrist. You can only imagine
what a debt collector can do with that type of information.
Now, under HIPAA, there are certain privacy protections in
place. One of those is that a hospital and a third-party vendor
are supposed to have in HIPAA parlance what's called a business
associate agreement, and that agreement is supposed to lay out
what the protections will be and how data will be protected. As
it turns out, Fairview had a business associate agreement with
Accretive, only Accretive violated that business associate
agreement.
At North Memorial, as it turns out, there apparently was no
business associate agreement in place at all. North Memorial
entered into a contract with Accretive in March 2011, and in
October 2011 I sent a letter to North Memorial saying please
produce to my office your business associate agreement with
Accretive. In the few days afterward there were a series of e-
mails between North Memorial and Accretive basically concocting
to create a business associate agreement, basically back-dated
or retroactively dated for presentation to my office. Greg
Kazarian, I think one of your next witnesses from Accretive, is
on this particular e-mail from the CFO of North Memorial. It's
dated October 13, and it says, ``Greg, we're sending you the
BAA. Could you sign and return so we can include it with our AG
response?''
North Memorial and Accretive thereafter concocted a
business associate agreement. It's dated March 21, or effective
March 21, 2011, and it was presented to my office as if they
always had a business associate agreement. In fact, that
agreement that was presented to my office was really signed in
October 2011.
Senator Franken. OK, that's news. You have those documents?
Ms. Swanson. Chairman, I do.
Senator Franken. OK. OK. I would like to see those.
Ms. Swanson. I would be happy to present them. I think it
would be very troubling to the patients that their information
is being shared without that type of written contract.
Senator Franken. OK. Thank you. I need to move on.
Ms. Swanson. Sure.
Senator Franken. Commissioner Rothman, we have debt
collection laws for a reason, to protect consumers. Can you
explain why it's important that debt collectors register as
such with your commission and why it is important that debt
collectors disclose to customers that they are debt collectors
and that they are calling to collect a debt?
Mr. Rothman. Mr. Chair, it's vitally important. We have
both requirements for the companies and the individuals to be
licensed and registered, registered by the individuals. It's
important because we want to know who are the people that are
authorized to do debt collection in Minnesota, and then
therefore are also required to follow the law for what are
prohibited practices.
There have been other investigations that I've looked into
in which debt collectors were either unlicensed, unregistered,
or not eligible because of their prior history in terms of
whether or not they're qualified; meaning, for example, they
cannot have certain criminal background history.
These laws are meant to be a first line of defense for
consumers generally, and then in particular in the context of
the medical profession to also make sure that these are
professionals and abiding by the laws of our State.
Senator Franken. One of the issues presented in this case
is whether the people who were collecting payments at the
hospitals and from the call center were--and I'm going to use a
term of art--debt collectors or financial counselors. What do
you make of this distinction, and why does it matter?
Mr. Rothman. Let me speak to Minnesota law. Under our law,
under section 332, it defines what a collection agency is and
what it means and who a person is that does debt collection.
The collection agency means it includes any person engaged
in the business of collection for others any account, bill, or
other indebtedness except as hereinafter provided, and these
exceptions don't apply here. It's a relatively broad
definition. It's a little different than what the Federal law
defines as what a debt collection agency is. And a collector is
somebody who acts under the authority of an agency to do those
things.
In Minnesota, Accretive Health did obtain and does have a
license from the Department of Commerce to be a collection
agency. Individuals who do debt collection activity under
Minnesota law would therefore also need to be registered, and
to the extent they were not and if they were not, they would be
serious and troubling violations of the law.
Senator Franken. OK. In the interest of time, I would like
to move on, and I want to thank you, Attorney General Swanson
and Commissioner Rothman. You are now excused.
Would the next panel please come forward?
Mr. Rothman. Thank you, Mr. Chairman.
Senator Franken. As they're being seated, I would like to
introduce our second panel of witnesses.
Charles Mooty is the chairman of the board and soon will
serve as interim CEO of Fairview Health Services. He is also
the former CEO of International Dairy Queen and recently became
the owner of the Minnesota textiles firm Faribault Woolen Mills
Company. Mr. Mooty began his career working at Adina-based
Dairy Queen in 1987.
Greg Kazarian has been senior vice president of Accretive
Health since January 2004. He previously served as Accretive's
general counsel. Prior to joining Accretive, Mr. Kazarian spent
16 years with the law firm of Peterson and Haupt, where he
worked on issues related to employment, intellectual property,
creditors' rights, dispute resolution, and out-sourcing.
Thank you for joining us, Mr. Mooty and Mr. Kazarian. I
know that it's not an easy thing to take time away from your
schedules to participate in this hearing and to give testimony.
I really do appreciate your time.
Mr. Mooty, please go ahead with your testimony.
STATEMENT OF CHARLES MOOTY, CHAIRMAN OF THE BOARD OF DIRECTORS
AND INTERIM CEO, FAIRVIEW HEALTH SERVICES, MINNEAPOLIS, MN
Mr. Mooty. Good morning, Chairman Franken. My name is
Charles Mooty and I am the chair of the Fairview Health
Services board of directors and will serve as Fairview's
interim chief executive officer beginning August 1, 2012. Thank
you for inviting me to be here today with you.
As you know, Fairview has had a long and strong reputation
of providing exceptional health care to the communities we
serve. Fairview's reputation is built on a long track record of
quality care and contributions to the local community.
The issues that have come to the fore recently have been
challenging for our employees, physicians and leaders. Most
importantly, we know that these issues created challenges for
some of our patients who do not feel that they were treated
with respect and dignity. To those patients, I offer my
personal apology and firm commitment on behalf of the entire
Fairview organization to regain your trust.
The Minnesota Attorney General's compliance review includes
several examples from patients and employees of business
practices that are not in keeping with Fairview's values and
code of conduct. And while Fairview is not a defendant in any
attorney general lawsuit, I can assure you that we are
cooperating with the attorney general's office in order to
reassure our patients that we are committed to compliance with
all laws and regulations and, above all else, improving patient
care.
Fairview has taken action to remedy the issues that have
been identified prior to the attorney general's suit. Fairview
terminated its work with Medical Financial Solutions, a part of
Accretive Health, on January 6, 2012 because of their failure
to comply with the State attorney general's billing and
collection agreement.
In addition to terminating our agreements with Accretive
Health, we also have initiated better approaches for escalating
patient, employee, and physician concerns so that they receive
prompt attention. We are reviewing and revising our training
tools to ensure each patient interaction reflects Fairview's
core values. We've stopped collecting past due balances and co-
insurance payments in emergency departments, and we're
reviewing emergency department and registration workflow
processes.
We also have reallocated resources to functions within
Fairview that handle refund and credit balance processes to
ensure prompt repayment of amounts due to patients.
In short, we are shouldering our share of the
responsibility and taking actions to address concerns for our
patients, employees, and physicians.
Fairview's first priority is and always will be the care
for our patients. All of our employees--physicians, leaders,
and even board members--are dedicated to patient well-being.
The Fairview team strives to deliver exceptional care at all
times in a respectful manner and in compliance with the
relevant laws and regulations. Moving forward, Fairview
leadership and governance members are going to do a better job
of listening and acting upon patient and staff concerns and
recommendations, and as Fairview transitions to a new
leadership, I can assure you that governance will now have our
renewed commitment to carry this forward.
Thank you for inviting me here today, and I welcome your
questions.
[The prepared statement of Mr. Mooty follows:]
Prepared Statement of Charles Mooty
Good morning, Chairman Franken. My name is Charles Mooty, and I am
chair of the Fairview Health Services board of directors and will serve
as Fairview's interim chief executive officer beginning August 1, 2012.
Thank you for inviting me to be here today.
As you know, Fairview has a long, strong reputation of providing
exceptional care to the communities we serve. Fairview's reputation is
built on a long track record of quality care and contributions to the
local community.
The issues that have come to the fore recently have been
challenging for our employees, physicians and leaders. Most
importantly, we know these issues created challenges for some of our
patients who do not feel they were treated with respect and dignity.
To those patients, I offer my personal apology and firm commitment
on behalf of the entire Fairview organization to regain your trust.
The Minnesota attorney general's compliance review includes several
examples from patients and employees of business practices that are not
in keeping with Fairview's values and code of conduct.
And while Fairview is not a defendant in any attorney general
lawsuit, I assure you we are cooperating with the attorney general's
office in order to reassure our patients that we are committed to
compliance with all laws and regulations, and above all else, to
improving patient care.
Fairview has taken action to remedy the issues that have been
identified. Prior to the attorney general's suit, Fairview terminated
its work with Medical Financial Solutions--a part of Accretive Health--
on January 6, 2012, because of their failure to comply with the State
attorney general's billing and collection agreement.
In addition to terminating our agreements with Accretive Health, we
also have initiated better approaches for escalating patient, employee
and physician concerns so they receive prompt attention.
We are reviewing and revising our training tools to ensure each
patient interaction reflects Fairview's core values. We've stopped
collecting past-due balances and co-insurance payments in emergency
departments, and we're reviewing emergency department and registration
workflow processes.
We've also re-allocated resources to functions within Fairview that
handle refund and credit balance processes to ensure prompt repayment
of amounts due to patients.
In short, we are shouldering our share of the responsibility and
taking actions to address concerns of our patients, employees and
physicians.
Fairview's first priority is and always will be the care of our
patients. All of our employees, physicians, leaders--and board
members--are dedicated to patient well-being. The Fairview team strives
to deliver exceptional care at all times in a respectful manner and in
compliance with relevant laws and regulations.
Moving forward, Fairview leadership and governance members are
going to do a better job of listening to and acting upon patient and
staff concerns and recommendations. And as Fairview transitions to new
leadership, governance will ensure that our renewed commitment carries
forward.
Thank you for inviting me to be here today, and I welcome your
questions.
Senator Franken. Thank you for your testimony, Mr. Mooty.
Mr. Kazarian, thank you for being here.
I will note that I asked Accretive CEO to participate in
this hearing, but she was unable to do so. But I understand
that you are the head of compliance for Accretive and probably
are the best person to talk about these issues that we're
discussing today, so I'm glad that you're here, Mr. Kazarian.
Thank you. Please go ahead with your testimony.
STATEMENT OF GREGORY KAZARIAN, SENIOR VICE PRESIDENT, ACCRETIVE
HEALTH, INC., CHICAGO, IL
Mr. Kazarian. Thank you, Senator, and good morning. My name
is Greg Kazarian, and I'm the senior vice president of
operations and the corporate responsibility officer at
Accretive Health. I came to Accretive Health in 2004 because I
believed in the company's mission and its vision for helping
patients and hospitals navigate the challenge of rapidly rising
health care costs. I came to Accretive Health because I saw
tremendous opportunity to make improvements in a broken and
struggling health care system.
I'm 49 years old, and I have a wife and three children.
Between us, we have four aging parents, two of whom live across
my backyard. As a family, we've experienced all of the usual
medical issues that families experience every day. I know
firsthand how important high-quality, compassionate care is,
and I know firsthand how important it is that patients
understand what insurance and public assistance they're
eligible for, as well as their own financial obligations for
their medical care.
There are three things I'd like to cover quickly in these
opening remarks. First, I want to thank you, Senator. Thank you
for inviting us to speak with you today, for the time your
staff has spent with us discussing these important issues, for
your willingness to listen, and for your efforts to have an
open and honest discussion as to how health care can and should
be improved. I thank you on behalf of myself as well as the
3,000 employees who work at Accretive Health. Approximately 150
of those employees live and work right here in Minnesota. These
individuals work as nurses, financial counselors, and social
workers. Over 50 of them have chosen to attend this hearing
voluntarily on their own time today.
Senator, it's important that the work of these trusted,
dedicated colleagues be understood and appreciated, and that is
something I'm going to try to achieve in our time today.
Today I want to explain what we at Accretive Health do. I
suspect that many people in this room had never heard of
Accretive Health before the last few weeks. Unfortunately,
we've been portrayed in a way that distorts and misrepresents
our business and our work.
True debt collection is less than 1 percent of what we do.
The core of what we do every day, everywhere we work, is help
hospitals find all available coverage for patients and ensure
that insurance companies and government programs pay the
hospitals the money they're owed for the care they provide.
For example, we go to bat for patients who have been denied
insurance coverage for pre-existing conditions and we get those
claims paid. We advocate for patients when their insurance
company refuses coverage for conditions that are medically
necessary, and we get those claims paid. We fight to get
patients who qualify onto disability so that they can get
coverage for the care they need. Over 95 percent of the revenue
we secure for hospitals come from insurance companies or
government payers.
As part of our work, we also help hospitals collect the
amounts due to them from patients, and we help the patients
themselves understand the coverage they have and how it's going
to respond to that episode of care, and the benefits they may
be eligible for. This is information patients want to know and
need to understand.
We're proud of the work we do, and particularly proud of
the fact that we've helped more than 250,000 formerly uninsured
people obtain coverage for their care, 16,000 of those people
right here in Minnesota. Sixteen-thousand people who didn't
know they had coverage for the care they were receiving were
connected to that coverage so it would pay for their claims.
And for those who cannot pay and for whom we cannot find
another source of coverage, we assist hospitals in getting
those patients charity care and other financial counseling,
including discounts and payment plans.
The work of our Quality and Total Cost of Care Program is
another point of great pride for us at Accretive Health. In
this groundbreaking program, we help care providers identify
and reach out to the sickest patients they serve and coordinate
their care and services provided to them in ways that help
improve their health care and reduce the need for costly
emergency room visits.
For example, by connecting social workers with home-bound
patients or patients who are vision impaired, we can create
safer living environments that reduce accidents. For patients
with insufficient social networks and those with memory
problems, we coordinate transportation to pharmacies so those
patients don't get sicker.
I sincerely hope to have an opportunity to talk today in
more detail about this very important part of our work.
The final comment I would like to make is perhaps the most
important. Accretive Health is a company that believes our
mission is to help patients and strengthen the financial
viability of the not-for-profit hospitals we serve. We take
seriously the allegations that have been raised by the attorney
general and appreciate the opportunity to have this dialog and
set the record straight.
As a company, we firmly believe that even one unsatisfied
patient is one too many. Let me be clear. Many of the
allegations we've heard this morning and in the press are
deeply troubling, and if they are true, they would be flatly
inconsistent with Accretive Health policies, our training and
our values. To any patient who experienced any interaction with
us or with our Fairview colleagues that lacked compassion and
professionalism, we sincerely apologize.
Senator Franken. Thank you. You have to wrap up.
Mr. Kazarian. Again, we thank you, Senator, for inviting us
to have this dialog, and I look forward to your questions.
[The prepared statement of Mr. Kazarian follows:]
Prepared Statement of Gregory Kazarian
Senator Franken, thank you for this opportunity to discuss
healthcare issues that we know are of concern to you and other
Minnesotans. We are extremely pleased that you will be holding a
hearing on this important subject because it gives us a chance to tell
the people of Minnesota who we are and what we really do. Accretive
Health and its thousands of employees (including roughly 130
Minnesotans) work every day to help hospitals strengthen their
financial stability so that they can fulfill their purpose of providing
high-quality healthcare in the communities they serve. We strive to
carry out this mission with strict adherence to our values, reflected
in our company's policies, which all of our employees are bound to
follow. Chief among these is that we work with patients in a respectful
and compassionate way, guided by the patient's individual circumstances
and needs.
Over the last several weeks, there have been a number of
misstatements and mischaracterizations about Accretive Health
concerning who we are and what we do in Minnesota. We appreciate the
opportunity that we have had to work with your office and inform you of
the facts. We are aware of reports that individual Accretive Health
employees may not have acted in a manner consistent with Accretive
Health's values and policies. From our review of the record, we have
been able to confirm that many of these reports are grossly distorted
or flatly wrong. To the extent that even some of what has been reported
occurred, however, such conduct is not tolerated by our company. In a
company of our size, it is unfortunately the case that there will
inevitably be instances where individual employees do not conform to
our highest expectations. As a company though, our view is that if even
a single patient has not received compassionate and appropriate
assistance from Accretive Health, that is one patient too many. We are
committed to taking whatever corrective actions are appropriate to
ensure that any patient who interacts with Accretive Health receives
the compassionate care and counseling they deserve. We welcome this
hearing and the opportunity to publicly respond to these misstatements
and mischaracterizations, to correct the record, and to make our
position clear.
It is unfortunate that recent mischaracterizations about our
company have detracted from the serious debate which we all must have
about healthcare policy. There is in this country a large and growing
problem of hospitals not being compensated for the care they provide.
According to the American Hospital Association (``AHA''), community
hospitals provided $39.3 billion in uncompensated care in 2010
alone.\1\ As uncompensated care escalates, hospitals will be forced to
eliminate services, downsize, or even go out of business. Or, ever-
increasing costs for healthcare will be shifted to those patients who
responsibly pay their own fair share of their healthcare costs, and who
will be forced to subsidize those patients who do not.
---------------------------------------------------------------------------
\1\ American Hospital Association, Uncompensated Care Fact Sheet
(Jan. 2012), available at http://www.aha.org/content/12/11-
uncompensated-care-fact-sheet.pdf (last visited May 25, 2012). In large
part, uncompensated care results not from the patient's inability to
pay, but rather from errors and inefficiencies in the third-party payor
system.
---------------------------------------------------------------------------
Our Revenue Cycle Management service helps hospitals overcome this
threat to their ability to deliver high quality healthcare by improving
their financial stability. We utilize people, processes, and
proprietary and cutting-edge technology to achieve this outcome in a
number of ways:
In the vast majority of cases, our work involves helping
hospitals to recover the significant amounts of money owed them by
insurance companies. This involves ensuring that hospital bills are
accurate and correctly coded, that insurer reimbursements are accurate,
and that insurer denials are promptly and effectively challenged.
We work to have timely and transparent conversations with
every patient concerning his or her cost of care. Based on the work of
industry experts, and what we routinely hear from patients, we
understand that clear communications with patients are a fundamental
part of compassionate care.
We help uninsured patients obtain third-party coverage
(e.g., Medicaid, COBRA, charity assistance) for their care. When
successful, this is a ``win-win'': it removes the burden of payment
from the patient while also ensuring that the hospital will be paid.
Since 2003, we have helped more than 250,000 uninsured patients obtain
coverage for their care.
We believe that many of the recent allegations are founded upon a
fundamental misunderstanding of who we are and what we do. We hope it
is now clear that Accretive Health is not principally a ``debt
collector.'' Far from it: over 95 percent of the revenue that we help
hospitals collect comes from insurance companies and other third-party
payors. And the revenue that we help hospitals collect from individual
patients overwhelmingly consists of fees for current services (which
hospitals simply must collect if they are to remain financially
viable), not past ``debt.''
To meet these challenges, Fairview adopted policies and practices,
reflected in Accretive Health initiatives, which closely follow those
adopted by many hospitals across the United States. However, these
policies and practices have now come under close scrutiny. For example,
some now appear to question the practice of Accretive Health and
Fairview employees having timely, transparent conversations with
patients about the cost of care. But these questions reflect a
fundamental misunderstanding of how hospitals work to serve the
interests of their patients.\2\ Numerous third-party organizations have
recognized the significant benefits for patients of timely and
transparent conversations about the cost of care. One leading
organization, the Healthcare Financial Management Association
(``HFMA'') conducted 8 years of research and dialogue to define a set
of practices determined to represent patients' ``optimal financial
experience.'' \3\ The practices that Accretive Health employees worked
with Fairview to implement are based upon HFMA's recommended practices.
---------------------------------------------------------------------------
\2\ They also reflect a fundamental misunderstanding of the
regulations and policy guidance that the Federal Government imposes on
hospitals under the Medicare program. For example, the Centers for
Medicare and Medicaid Services (``CMS'') requires that hospitals, as a
condition of receiving Medicare reimbursement for bad debt, engage in
``reasonable collection efforts.'' 42 CFR 413.89(e)(2); see also
Centers for Medicare and Medicaid Services, Provider Reimbursement
Manual, ch. 3, 310, available at http://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/Paper-Based-Manuals-Items/CMS021929.html
(last visited May 25, 2012). CMS guidance expressly permits hospitals
to use collection agents and engage in direct conversations with
patients regarding collections. See id. Further, CMS and the Office of
the Inspector General of the U.S. Department of Health and Human
Services (``OIG'') have recognized the benefits for patients of
conversations about the cost of care, even in the emergency room
setting. See 64 Fed. Reg. 61353, 61355 (Nov. 10, 1999); 68 Fed. Reg.
53222, 53227 (Sept. 9, 2003).
\3\ Healthcare Financial Management Association, Early Transparent
Financial Communications: A Patient-Friendly Billing Recommended
Practice, available at http://www.hfma.org/Templates/
InteriorMaster.aspx?id=327 (last visited May 25, 2012).
---------------------------------------------------------------------------
Let me be clear: there is nothing illegal or wrong in talking with
patients about the cost of care, and there is nothing illegal or wrong
in requesting the appropriate payment from patients with the means to
pay their healthcare costs. Hospitals operate on very small margins,
averaging approximately 2.6 percent in 2011.\4\ As employers and
individuals increasingly choose health insurance with lower annual
costs but higher co-payments and deductibles, it becomes ever more
critical for hospitals to actually collect patients' share of
healthcare costs. Otherwise, hospitals will not remain financially
viable. For its part, Accretive Health works very hard to ensure that
its employees conduct conversations about such matters in a respectful,
compassionate way. Those who would challenge the need for such
conversations must answer several questions: how are Fairview and other
hospitals to be paid for the services they provide? Should they (and
can they) continue to provide billions of dollars in uncompensated
care? If hospitals are foreclosed from recovering amounts owed them,
how are they to continue providing quality care to patients? And is it
really the best solution to leave patients to fend for themselves in
navigating the complexities of health insurance reimbursement?
---------------------------------------------------------------------------
\4\ Moody's Investor Service, Fiscal Year 2011 Preliminary
Financial Medians for Not-for-Profit Hospitals and Health Systems (May
2012).
---------------------------------------------------------------------------
Perhaps even more serious questions in need of answers relate to
our Quality and Total Cost of Care (``QTCC'') service, which has also
been in place at Fairview. The most important question relating to this
program is simply this: why was this successful program put in
jeopardy, even though it has nothing to do with hospital revenue or
debt collection? QTCC is focused on helping healthcare providers
identify and coordinate care of their most chronically ill patients.
Recent surveys have found that half of all healthcare expenses are
attributable to only 5 percent of patients.\5\ By providing these
patients with more integrated and intensive care, providers can reduce
costly hospitalizations and emergency room visits and improve
healthcare outcomes. With Accretive Health's QTCC service, the quality
of care increases while total healthcare costs decline.\6\
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\5\ See, e.g., U.S. Department of Health and Human Services, Agency
for Healthcare Research and Quality, The Concentration and Persistence
in the Level of Health Expenditures Over Time: Estimates for the U.S.
Population, 2008-2009 (Jan. 2012), available at http://meps.ahrq.gov/
mepsweb/data_files/publications/st354/stat354.shtml (last visited May
25, 2012).
\6\ It is worth noting that Accretive Health's QTCC service is
fully-aligned with former CMS Administrator Dr. Don Berwick's ``three-
part aim'' for a Medicare program that achieved (1) ``better care for
individuals,'' (2) ``better health for populations,'' and (3) ``lower
growth in expenditures.'' 76 Fed. Reg. 67802, 67804 (Nov. 2, 2011).
---------------------------------------------------------------------------
Accretive Health's QTCC service is on the leading edge of
healthcare delivery. One goal of the Fairview/Accretive Health QTCC
partnership was for Accretive Health to assist Fairview in obtaining
``Accountable Care Organization'' (``ACO'') status with CMS.\7\ ACOs
have the potential to achieve a major, positive transformation of the
healthcare delivery system. With Accretive Health's assistance, in
December 2011, Fairview was selected by CMS as one of only 32 pioneer
ACOs for Medicare beneficiaries.\8\
---------------------------------------------------------------------------
\7\ An ACO is a healthcare delivery model in which a group of
healthcare providers and doctors work together to provide coordinated,
high-quality, and cost-effective care for patients.
\8\ News Release, Fairview Named One of 32 Pioneer ACOs by CMS
(Dec. 19, 2011), available at http://www.fairview.org/About/
MediaCenter/News/S_073059 (last visited May 25, 2012).
---------------------------------------------------------------------------
Fairview's recent termination of its QTCC contract is a needless
and unfortunate setback for the Fairview patients whose care and
quality of life was improved through the QTCC program and for the
approximately 130 individuals whose careers were devoted to the QTCC
mission. Nevertheless, Accretive Health will continue to work with
Fairview to preserve the good results that have been achieved through
this program.
We vigorously contest recent allegations against our company, most
of which have been brought outside the judicial process through a
distorted public campaign. Our review of the record shows that they are
primarily the product of exaggeration or misunderstanding. And to the
extent that any of these allegations are true, they do not reflect the
policies or values of our company. But in this moment of public
scrutiny, we also see this as an opportunity to create a new consensus
about how to move forward. To this end, on May 15, 2012, Accretive
Health announced that it would support a panel of prominent healthcare
and policy leaders--including former Secretary of Health and Human
Services Michael Leavitt, former Senator Tom Daschle, former Senator
Bill Frist, and former Secretary of Health and Human Services Donna
Shalala--to create detailed and uniform national standards for how
hospitals and other providers interact with patients concerning their
financial obligations.\9\
---------------------------------------------------------------------------
\9\ News Release, Accretive Health Initiates Panel of Health Care
Policy Experts to Establish National Standards for Health Care
Providers' Financial Interactions with Patients (May 15, 2012),
available at http://ir.accretivehealth.com/
phoenix.zhtml?c=234481&p=irol-newsArticle&ID=169
6156&highlight= (last visited May 25, 2012).
---------------------------------------------------------------------------
summary of key issues
First, consistent with the recommended practices of the HFMA and
AHA and based on what we have heard from patients, Accretive Health
believes that timely and transparent conversations about the cost of
care benefit both patients and hospitals. The cost of care often is a
major source of anxiety for patients and their families. For this
reason, Accretive Health believes that conversations with patients are
an important part of compassionate care. These conversations also
benefit hospitals; for example, allowing hospitals to obtain from the
patient information necessary to secure insurance authorization or
payment.
Second, as a part of the pre-registration or registration process
at Fairview, patients were informed of their share of the cost of care
and asked--but never required--to make a payment. Employees were
trained and instructed never to suggest that payment was a condition of
care. Indeed, scripts provided to employees emphasized this fundamental
point in red, bolded, capitalized type:
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
SERVICE WOULD BE DENIED FOR NON-PAYMENT.
Third, while emergency room patients were expected to complete the
same reasonable registration process as other patients, conversations
with patients concerning the cost of care occurred only after medical
screening and any stabilizing treatment, and, consistent with EMTALA,
were never permitted to delay screening or treatment.
Fourth, Accretive Health did not ``control'' Fairview or its
employees. Accretive Health's Revenue Cycle Operations Agreement with
Fairview defined the parties' relationship as a ``collaborative'' one,
with Accretive Health ``accountable'' to a Fairview executive.
Importantly, Accretive Health's work with Fairview--like its work with
all of its hospital clients--was reflective of and bounded by
Fairview's own policies.
Fifth, Accretive Health takes very seriously the confidentiality of
patient health information and has in place robust policies and
practices to ensure that patient information is well-protected. In the
aftermath of the July 2011 theft of an unencrypted company laptop,
Accretive Health terminated the responsible IT employee, strengthened
its laptop encryption practices, rolled out a new e-mail encryption
system, and is in the process of implementing higher-than-industry
standard encryption software.
Sixth, Accretive Health takes reasonable steps to ensure that
patient health information is accessible by only those employees who
need the information for their jobs.
Seventh, in February 2012, Accretive Health entered into a consent
order with the Minnesota Department of Commerce and agreed to suspend
those debt collection activities in the State of Minnesota requiring a
collector's license.
Eighth and finally, there have been numerous mischaracterizations
of Accretive Health documents and misstatements of key facts concerning
practices at Fairview that, Accretive Health believes, call into
question the overall accuracy of the recent report by the Minnesota
attorney general's office. These errors are unfortunate, but they could
have been avoided: in compiling its report, the attorney general's
office did not interview any current Accretive Health employees (either
in the field or at headquarters) despite our request to have a
productive dialogue. We welcome this opportunity to explain the facts.
discussion of key issues
I. Practices at Fairview Were Consistent With Industry ``Recommended
Practices'' and Complied With Applicable Laws
A. Accretive Health Believes That When Patients Are Provided With
Information About Their Cost of Care, Everyone Benefits.
Many of the recent allegations concern the practice of discussing
with Fairview patients their cost of care prior to or at the time of
service. \10\ The attorney general's office apparently believes that
these conversations should not occur. Based on what we have heard from
patients, Accretive Health could not disagree more.
---------------------------------------------------------------------------
\10\ See generally Compliance Review at Volt. 2.
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First and foremost, conversations about the cost of care benefit
patients. A hospital is one of the only places a consumer will go where
the cost of service is ambiguous and unknown. The cost of care often is
a major source of anxiety for patients and their families. Accretive
Health believes, as do many others in the healthcare industry, that
timely and transparent conversations about the cost of care--together
with the option of speaking with a financial counselor--are a critical
part of compassionate care. Accretive Health provides hospitals with
the tools to have these conversations in a compassionate way.
Second, conversations with patients about the cost of care are a
key part of ensuring that patient bills are accurate and appropriate.
For example, patients seeking treatment at Fairview occasionally had
prior balances. In most cases, the prior balance resulted from an
insurance claim that had been delayed or improperly denied, or where
the information needed to submit the claim had not been provided at the
time of service. By discussing prior balances with patients, Accretive
Health and Fairview employees could obtain the patient's assistance in
submitting or re-submitting the claim to the patient's insurer. When
successful, this was a win-win: the patient was no longer burdened by
unnecessary debt and Fairview was more likely to be paid. The data
confirm that Accretive Health's approach yielded significant benefits
for both Fairview patients and Fairview itself. For the fourth quarter
of 2011, over 98 percent of resolved prior balances at Fairview--
approximately $19 million--was paid by public or private insurance,
while less than 2 percent--about $300,000--was paid by patients
themselves.
Both CMS and OIG have concluded that conversations about the cost
of care--even in the emergency room setting--can be helpful to
patients.\11\ CMS and OIG have suggested that these conversations occur
with ``well-trained and knowledgeable'' individuals--the hallmark of
the Accretive Health business model. Third-party organizations also
have recognized the significant benefits to patients and providers of
timely and transparent conversations about the cost of care. Among
other organizations, HFMA places great emphasis on ``early, transparent
financial communications'' with patients so that they understand their
possible out-of-pocket costs before undergoing treatment.\12\ Based on
its 8 years of research and dialogue, HFMA has defined the patients'
``optimal financial experience'' as including the following steps:
---------------------------------------------------------------------------
\11\ See 64 Fed. Reg. 61353, 61355 (Nov. 10, 1999); 68 Fed. Reg.
53222, 53227 (Sept. 9, 2003).
\12\ See Healthcare Financial Management Association, Early
Transparent Financial Communications: A Patient-Friendly Billing
Recommended Practice, available at http://www.hfma.org/Templates/
InteriorMaster.aspx?id=327 (last visited May 25, 2012).
1. Providers gather detailed information before and at the time of
service to prospectively estimate patients' expected out-of-pocket
costs.
2. Providers use tools to help estimate the amounts and terms of
payment that patients can afford. The resulting information allows
providers to:
Identify and aid patients who need financial assistance,
either through in-house programs, Medicaid, or other assistance
programs.
Efficiently reach an agreement on payment amounts and
terms for patients who are able to pay all or a portion of their bills.
3. Providers communicate earlier, so that patients understand their
financial obligation before they undergo treatment.\13\
---------------------------------------------------------------------------
\13\ Id.
This recommended approach is the basis for the steps that Accretive
---------------------------------------------------------------------------
Health employees worked with Fairview to implement.
B. Accretive Health and Fairview Employees Asked--But Did Not
Require--That Fairview Patients Make a Payment Toward Their Cost of
Care.
At Fairview, most conversations with patients about the cost of
care occurred during telephone pre-registration, 7 to 10 days in
advance of the patient's appointment. (If the patient could not be
reached by telephone, this conversation occurred during patient
registration on the day of the patient's appointment.) As a part of
this process, an Accretive Health or Fairview employee verified the
patient's insurance information, thereby enabling Fairview to obtain
any necessary authorization for insurance coverage of the patient's
care. The employee also used Accretive Health's sophisticated software
to estimate the patient's share of the cost of care (called the
``residual balance'') and advised the patient of this estimated amount
as well as any prior balances. The patient was then asked to make a
payment. But payment was optional. In fact, the vast majority of
patients chose not to pay their residual or prior balances during pre-
registration or registration, opting instead to be billed.
Importantly, employees were instructed never to insist that
patients pay residual or prior balances or suggest that payment was a
condition of care.
Training materials and employee scripts emphasized this fundamental
point in red, bolded, capitalized type:
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
SERVICE WOULD BE DENIED FOR NON-PAYMENT.
Accretive Health understands from media reports that,
notwithstanding our significant efforts to be clear that care would
always be provided, certain Fairview patients have indicated they had
the false impression that they may not receive treatment unless they
made a payment toward their cost of care. This is obviously
regrettable. These reports are not consistent with the vast majority of
the feedback we have historically received, and are certainly at odds
with our company's values and policies. But Accretive Health's view is
that if even a single patient believes that he or she has not received
compassionate and appropriate assistance from Accretive Health, that is
one patient too many.
C. Accretive Health and Fairview Employees Never Delayed Screening
or Stabilizing Treatment of Fairview Emergency Room Patients.
The attorney general's office makes very serious--but ultimately
unsupported \14\--allegations that Fairview and Accretive Health
violated the Emergency Medical Treatment and Labor Act
(``EMTALA'').\15\ In fact, practices at Fairview emergency rooms were
fully consistent with EMTALA requirements. While patients presenting at
Fairview emergency rooms were expected to complete the same reasonable
registration process as other patients, this process occurred only
after the patient had received a medical screening examination and any
necessary stabilizing treatment. At no time was an emergency patient's
screening examination or stabilizing treatment delayed because of
registration.
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\14\ Specific instances constituting alleged EMTALA violations are
discussed in Section V, below.
\15\ See Compliance Review at Volt. 2, PP. 16-17. The Emergency
Medical Treatment and Labor Act (``EMTALA''), 42 U.S.C. 1395dd,
provides that ``[a] participating hospital may not delay provision of
an appropriate medical screening examination required under subsection
(a) [of the Act] or further medical examination and treatment required
under subsection (b) . . . in order to inquire about the individual's
method of payment or insurance status.'' 42 U.S.C. 1395dd(h).
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Even after screening and stabilization, employees were allowed to
speak with emergency patients only as permitted by clinicians and only
during ``down times'' (such as when the patient was waiting for test
results). As with non-emergency patients, the focus of registration was
to verify the patient's insurance information, enabling Fairview to
obtain any necessary insurance authorizations. Emergency patients were
also provided with an estimate of their share of the cost of care and
asked to make a payment. But payment was optional and most emergency
patients opted to be billed. Further, both Fairview and Accretive
Health had in place policies that an emergency patient's treatment was
never to be conditioned on payment.
II. Accretive Health Did Not ``Control'' Fairview or Its Employees
Fairview contracted with Accretive Health in March 2010 for its
Revenue Cycle Management service and in November 2010 for its Quality
and Total Cost of Care service. The Fairview/Accretive Health contracts
covered seven hospitals \16\ and more than 40 primary care clinics.
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\16\ The seven hospitals are Southdale, Ridges, Lakes, and
Northland hospitals, and the University of Minnesota Medical Center
(comprised of the Riverside campus, Amplatz Children's Hospital, and
the University of Minnesota campus). Across these facilities, there was
variation in how Revenue Cycle Management and QTCC functions were
carried out, driven in large part by the needs, policies, and
capabilities of the individual facilities.
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The attorney general's office has alleged that Accretive Health
gained ``breathtaking'' control over Fairview and its employees, \17\
but this is not true. The parties' contracts defined their relationship
as a ``collaborative'' one, \18\ with Accretive Health ``accountable''
to the Fairview ``Client Sponsor,'' i.e., a Fairview executive.\19\
Fairview retained and exercised control over the hiring, compensation,
reassignment, and termination of Fairview employees. \20\ Fairview also
had the authority to remove Accretive Health employees working at
Fairview.\21\ Further, as with its other hospital clients, Accretive
Health enacted at Fairview only those policies and practices that
Fairview chose to enact.
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\17\ See Compliance Review at Volt. 1, PP. 7-8.
\18\ See, e.g., Revenue Cycle Operations Agreement, Preamble (``The
Parties desire to enter into a broad-based collaborative relationship .
. . .'').
\19\ Id., 15.
\20\ Id., 17-20.
\21\ Id., 8.
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In March 2012, as a part of Accretive Health's agreement with the
attorney general's office to resolve the pending litigation, Fairview
and Accretive Health decided to amend their Revenue Cycle Operations
Agreement to transition the management of those operations back to
Fairview. Subsequently, Fairview announced its intent to terminate its
unrelated QTCC contract with Accretive Health.
III. Accretive Health Takes Very Seriously Its Obligation to Protect
Patient Health Information
A. Accretive Health Takes Reasonable Measures to Ensure That
Company Laptops Containing Protected Health Information Are Secure.
The attorney general's office uses the unfortunate theft in July
2011 of a company laptop to suggest that Accretive Health has not acted
reasonably to secure protected health information (``PHI''). \22\ We
share the committee's concern, and that of Senator Franken in
particular, that PHI is secured. However, we believe that Accretive
Health has acted reasonably and appropriately to protect PHI, both in
response to the July 2011 laptop theft and more broadly.
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\22\ Compliance Review at Volt. 4 PP. 7-8.
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The relevant facts are as follows: in July 2011, an unidentified
person stole a company laptop from an Accretive Health employee's
locked automobile. The locked automobile had been unattended for less
than 30 minutes. The laptop, which was password-protected but not
encrypted, contained the PHI of thousands of patients. As required by
Federal law, Accretive Health notified the affected hospitals, which in
turn notified the affected patients. Fortunately for all involved,
there is no indication that any patient information contained on the
laptop has been compromised.
It is Accretive Health's policy that all laptops be encrypted. But
due to the oversight of an individual IT employee (who was promptly
terminated), the laptop stolen in July 2011 was 1 of approximately 30--
out of more than 1,400--that was not encrypted due to this employee's
error. Since the July 2011 theft, Accretive Health has strengthened its
policies for ensuring laptop encryption. Today, multiple employees
independently confirm that each laptop is properly encrypted.
Additionally, Accretive Health conducts reviews at least five times
each week to confirm that every company laptop remains properly
encrypted.
Aside from the specific measures taken in response to the July 2011
laptop theft, Accretive Health continues to work to enhance its
protections for PHI. In early 2012, Accretive Health adopted a new e-
mail encryption system. And, Accretive Health recently began the
process of upgrading its encryption software to higher-than-industry
standard.
B. Accretive Health Acted Reasonably to Limit the Protected Health
Information to Which Employees Had Access.
Medical Financial Solutions (``MFS''), an Accretive Health
division, engages in the collection of pre-collect and dormant debt
from individual patients. The attorney general's office alleges that
MFS employees had access to ``personal and confidential data of
Fairview patients.'' \23\ But the discussion of this issue fails to
reflect two important points. First, given their work, MFS needed
access to certain patient information to respond to patient questions.
Often, when contacted about a past-due bill, a patient will ask
questions about the date of service or the reason for the hospital
visit. As is standard, MFS employees were provided access to certain
patient information so that they were able to respond to these
questions.
---------------------------------------------------------------------------
\23\ Id. at 11.
---------------------------------------------------------------------------
Second, when Accretive Health began its work at Fairview in March
2010, the only source of patient information was PASS, Fairview's
patient accounting system. Accretive Health understands that Fairview
implemented PASS decades ago and continues to use the system to bill
its patients. Accretive Health also understands that the information
its employees received from PASS is consistent with what others in the
industry receive from patient accounting systems used by other
hospitals.
However, beginning in November 2010, shortly after Accretive Health
began working with Fairview, Accretive Health discontinued its use of
PASS for this purpose and moved to different software that limited
employee access to certain patient information: (1) patient name and
contact information; (2) guarantor (person financially responsible, if
not the patient); (3) date of service; (4) patient type (e.g.,
emergency room, outpatient); and (5) an easily understood description
of the diagnosis code. This software became fully operational in
February 2011, though some employees continued to have access to PASS
until early 2012.
IV. Accretive Health Suspended Debt Collection Activities in the State
Of Minnesota
The attorney general's office makes a number of statements
concerning Accretive Health's compliance with the Federal Debt
Collection Practices Act and Minnesota debt collection laws. Many of
these statements concern matters at issue in the January 2012 lawsuit
brought by the attorney general's office against Accretive Health. For
this reason, Accretive Health respectfully incorporates by reference
its April 30, 2012 motion to dismiss. However, Accretive Health notes
that, in February 2012, it entered into a consent order with the
Minnesota Department of Commerce and agreed to suspend those debt
collection activities in the State of Minnesota requiring a collector's
license.
V. Many Allegations Concerning Practices at Fairview are Founded on
Mischaracterizations of Documents and Misstatements
of Key Facts
The attorney general's office makes a number of statements
concerning Accretive Health and Fairview's practices of collecting
residual and prior balances at the time of treatment, but does not
specify how these practices violated any law other than EMTALA
(addressed above). However, these allegations are, more often than not,
founded on mischaracterizations of Accretive Health documents and
misstatements of significant facts. For example:
The attorney general's office discusses a December 2011
``incident'' at the University of Minnesota Amplatz emergency room
during which an Accretive Health financial counselor allegedly delayed
the treatment of a child.\24\ But the attorney general's office grossly
mischaracterizes this ``incident.'' In fact, the child's father asked
to meet with a financial counselor to discuss his family's financial
situation and the cost of care. Following the meeting, Fairview's Risk
Management Consultant thanked Accretive Health for ``working
diligently'' with the family.
---------------------------------------------------------------------------
\24\ Compliance Review at Volt. 2, PP. 16-17.
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The attorney general's office claims that numerous
patients left Fairview emergency rooms and suggests that these patients
were deterred from seeking treatment.\25\ This is not accurate. As
evidenced by their inclusion in the cited records, each of the patients
discussed was treated at Fairview but left before completing the
patient registration process.
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\25\ Compliance Review at Volt. 2, p. 16.
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The attorney general's office states that employee scripts
``can lead a patient or her family to believe the patient will not
receive treatment until payment is made.'' \26\ But the attorney
general's office neglects to mention that each employee script included
the following message in red, bolded, capitalized type:
---------------------------------------------------------------------------
\26\ Compliance Review at Volt. 2, p. 14.
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
---------------------------------------------------------------------------
SERVICE WOULD BE DENIED FOR NON-PAYMENT.
The attorney general's office cites an Accretive Health e-
mail, allegedly stating that ``Fairview line staff has expressed
concerns regarding collecting patient share at the time of registration
. . . the impact has been most felt at the Fairview management level--
there have been some emotional responses.'' \27\ The suggestion is that
Fairview staff were upset by Revenue Cycle Management practices. But
the attorney general's office's selective quotation of this e-mail is
misleading. From the full text of this e-mail, it is clear that the
``concerns'' and ``emotional responses'' of the Fairview employees are
directed at the attorney general's office because the January 2012
lawsuit against Accretive Health seemed ``off-base.'' \28\
---------------------------------------------------------------------------
\27\ Compliance Review at Volt. 2, p. 19.
\28\ Compliance Review at Volt. 2, Ex. 93.
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The attorney general's office claims that an Accretive
Health employee dismissed doctors' concerns about ``stop lists'' as
``country club'' talk and suggests that the employee took no
action.\29\ But the attorney general's office mischaracterizes what the
Accretive Health employee actually said. The first portion of the
employee's email--which the attorney general's office does not cite--
identifies numerous steps that Accretive Health could take to address
any doctors' concerns. \30\
---------------------------------------------------------------------------
\29\ Compliance Review at Volt. 2, p. 15.
\30\ Compliance Review at Volt. 2, Ex. 80.
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The attorney general's office claims that Fairview does
not pay timely refunds to patients.\31\ In fact, Accretive Health
worked with Fairview to implement a comprehensive and effective system
to identify accounts where refunds are owed and process and pay such
refunds in a timely manner. Indeed, with Accretive Health's assistance,
we understand that Fairview sped up the payment of refunds to patients
and reduced the number of refunds owed by approximately 60 percent.
---------------------------------------------------------------------------
\31\ Compliance Review at Volt. 2, p. 20.
---------------------------------------------------------------------------
The attorney general's office cites an e-mail chain among
employees discussing a patient's financial situation, stating that the
employees ``discuss[ed] the condition of the patient's disease and
tr[ied] to figure out if her cancer was terminal or simply disabling''
and otherwise ``discuss[ed] her cancer.'' \32\ This e-mail chain
includes numerous messages among Accretive Health employees discussing
the patient's financial status and her eligibility for third-party
coverage. But it does not include any ``discussion'' of the patient's
medical condition beyond that relevant to finding her third-party
coverage. \33\ In fact, the e-mail chain illustrates the great lengths
to which Accretive Health employees would go to help Fairview patients
find coverage for their care.
---------------------------------------------------------------------------
\32\ Compliance Review at Volt. 4, p. 13.
\33\ Compliance Review at Volt. 4, Ex. 14.
---------------------------------------------------------------------------
The attorney general's office makes a number of other allegations
concerning practices at Fairview, but fails to present accurate or
complete facts:
a. ``Stop Lists''
The attorney general's office discusses ``stop lists,'' but this
discussion is misleading. Never have ``stop lists'' been used to
``stop'' patients from receiving treatment. Rather, Accretive Health
and Fairview employees used stop lists to identify patients scheduled
for certain procedures with whom employees would meet to resolve prior
balances.\34\ As described above, Accretive Health and Fairview
employees typically resolved prior balances by obtaining additional
information from the patient, and then using this information to secure
payment from the patient's insurance company.
---------------------------------------------------------------------------
\34\ The procedures included radiology and imaging (all Fairview
hospitals), laboratory tests (Lakes), and surgeries (Southdale and
Ridges).
---------------------------------------------------------------------------
Accretive Health to date has located no instance where a Fairview
patient was barred from undergoing treatment due to a prior balance.
b. ``Bedside Collections''
The attorney general's office discusses ``bedside collection,'' but
this discussion omits several significant facts. At Fairview, Accretive
Health and Fairview employees attempted to meet with all patients to
discuss their cost of care. When these conversations did not occur
during pre-registration or registration (which, for emergency patients,
occurred after screening and any necessary stabilizing treatment), they
typically occurred during the course of the patient's hospital stay.
However, ``bedside'' contacts with patients occurred only after certain
conditions were met. First, all conversations were optional. Second,
conversations occurred only at a time a clinician deemed appropriate.
Third, Fairview policies restricted employees from contacting certain
categories of patients, such as emergency patients with life-
threatening injuries or heart conditions.
Accretive Health believes that its employees making ``bedside''
contacts did so with the greatest possible compassion, in a manner
appropriate to the patient's individual situation and consistent with
the practices agreed upon by Fairview and Accretive Health.
c. Labor and Delivery
The attorney general's office discusses practices in Fairview
hospitals' labor and delivery departments, but, again, this discussion
omits several significant facts. Fairview policies determined when
Accretive Health and Fairview employees could contact mothers of
newborn infants. At the University of Minnesota Medical Center, and at
Northland and Lakes hospitals, the practice was that new mothers could
be contacted only after they were moved into recovery. If, upon
contact, the mother indicated that she wanted to talk, the employee
would schedule a time to meet with the mother in her room. At the
Southdale and Ridges hospitals, the practice was to contact new mothers
on the day they were discharged. As a general matter, employees did not
contact women who were in labor or who had just given birth.
______
Accretive Health believes that the mischaracterizations and
misstatements summarized above call into question the overall accuracy
of the recent allegations by the attorney general's office.
accretive health: moving forward
Accretive Health is a company that strives to make the healthcare
system better. We are made up of thousands of dedicated men and women
who are excited to go to work every day because they believe in our
mission of helping hospitals provide better patient care and lowering
healthcare costs for all. We look forward to working with others in our
industry on developing detailed and uniform national standards for how
hospitals and other providers interact with patients concerning their
financial obligations.
We will also continue to defend ourselves in the lawsuit brought by
the Minnesota attorney general's office. But we remain hopeful for a
renewed and more productive dialogue between our company and the
attorney general's office: a dialogue that ends with Minnesotans
continuing to benefit from Accretive Health's services.
Helping hospitals become financially stable and receive all the
payments they are due is not at odds with transparent, compassionate,
and quality patient care. Senator Franken, thank you again for the
opportunity to discuss Accretive Health's work in Minnesota on behalf
of Minnesotans. I am happy to answer any questions you may have.
Senator Franken. Thank you so much, both of you, Mr. Mooty
and Mr. Kazarian.
Mr. Mooty, I understand that you are in the process of
transitioning to become Fairview's interim CEO, so you may not
know every detail of the day-to-day workings of the hospital or
what happened. But as chairman of the board, I hope you can
answer a few questions, and if there's something you need to
check on, I hope that you'll followup with me.
Fairview has been around for over 100 years, right?
Mr. Mooty. That's correct.
Senator Franken. As far as you know, in those 100 years,
has Fairview ever had problems like those that we're discussing
today?
Mr. Mooty. I think as the attorney general referenced, back
in 2005, when the agreements were entered into before, that
Fairview was part of the group that had had challenges and
issues with the attorney general at that time.
Senator Franken. OK, thank you.
I was very disturbed, Mr. Mooty, by the allegations that
Accretive was badgering patients in Fairview's emergency room,
and in the neonatal intensive care unit they asked for pre-
payment and to collect on debts. What was your first reaction
to these allegations?
Mr. Mooty. I think all of us within Fairview love our
culture and our commitment to our patients, and any time both
our patients and our employees are not in a comfortable
situation, that's just very disconcerting.
Senator Franken. If these allegations turn out to be true,
would they violate any part of Accretive's contract with
Fairview?
Mr. Mooty. I'm not the legal expert to know exactly as to
what the violations would do. My guess is that in many respects
if what has been reported is actual and truth, that would
require an issue as it relates to any agreement or any activity
with Accretive.
Senator Franken. OK, thank you.
Mr. Mooty, the attorney general's report discusses what she
calls a culture clash between Accretive and Fairview. She cites
e-mails in which Fairview physicians express their discomfort
with certain activities. Did Fairview perceive a culture clash
between Fairview and Accretive? What steps did Fairview take to
address these concerns at the time, and did Fairview staff
address them directly with Accretive?
Mr. Mooty. My understanding is that staff did elevate
concerns to their appropriate managerial reports, and that that
was passed along. As to how high that was passed along is still
something that we're needing to try to dive into and gain
greater understanding of.
But there's no doubt that there was a culture change and an
uncomfortableness that both went to our employee group as well
as to our patients, and that's a troubling situation.
Senator Franken. Mr. Mooty, can you tell me what steps
Fairview has taken to protect patients from inappropriate debt
collections? How have Fairview's procedures changed since
Fairview became aware of the attorney general's investigation
and the alleged activities of Accretive? And in Fairview's
view, what is the responsible way or the Minnesota way, if you
will, to collect payment from patients?
Mr. Mooty. I think first and foremost is to make sure that
whatever our procedures are, is that it's within the rules and
laws of the State. In that respect, it's vitally important that
we uphold those laws as we go forward.
As it relates to changes, we have now taken all of that
collection in-house and we have dedicated our team to new
training and to new approaches and new scripting to make sure
that we are upholding that as we go forward. I will do my
darndest as far as what is needed to make sure that we steward
this thing appropriately and guide it to a point where our
patients feel that we are being both good stewards and managers
of our resources, but also providing exceptional quality care.
Senator Franken. Thank you.
Mr. Kazarian, in its response to my letter, Accretive said
that,
``While the revenue cycle employees in the call
center working to collect payments from patients
typically refer to themselves as `patient financial
advisors' or `debt recovery specialists,' these
employees also may have, from time to time, identified
themselves as `financial counselors'.''
Now, all these terms, ``patient financial advisor,'' ``debt
recovery specialist,'' ``financial counselor,'' seem misleading
to one degree or another. Shouldn't the people in the call
center disclose at the outset that they are debt collectors
calling to collect a debt?
Mr. Kazarian. Senator, there are two aspects of work in
that call center, and I'm in full agreement with you with
respect to those people who are collecting on aged debt, debt
that is in default, which is the way the Fair Debt Collection
Practices Act defines it.
In health care billing----
Senator Franken. Maybe we should talk about changing.
[Laughter.]
Mr. Kazarian. Yes, and we might. You know, I've spent 7
years of my life in this company working on these issues that I
talked about in my opening statement, and we are----
Senator Franken. Well, how does Accretive determine when a
debt is in default?
Mr. Kazarian. Actually, Accretive doesn't do that. The
hospital policies will typically dictate that. In most
instances, it will be deemed in default at anywhere from 120 to
180 days after the date of statement of service. And the unique
issue that you have, the reason that we----
Senator Franken. You're saying the hospital does it, but
don't you, on all revenue cycle issues, don't you control what
the hospital does? That's what it says in your SEC filing.
Mr. Kazarian. No, Senator, that's not accurate. I can get
to the reconciliation of the SEC filing if you'd like to. But
what our contracts all provide is that we will operate in a
manner consistent with the hospital's policies and procedures
in all the areas that affect the services we provide. So if the
hospital says that a debt is in default and to be referred to
followup, that's what we adhere to.
Senator Franken. OK. It just seems like it's a legal
technicality. Most people think of debt as money that they owe
to be collected.
Mr. Kazarian. Yes, I understand that, Senator. And that's
why I'd like to talk a minute about an area where I think that
there's more thought to be provided.
Senator Franken. Sure.
Mr. Kazarian. In health care, we have this unique situation
where the patient who is receiving the care, absent some dialog
with somebody, doesn't know what they're going to owe. So if
you have--when my son went to the emergency room and then got
his knee surgery, we didn't know what our deductible was, what
our co-insurance share might be, and unless somebody sits down
and talks to you about how Blue Cross is going to handle that
care, what they're going to charge, you don't know----
Senator Franken. I think I was talking more about the call
centers.
Mr. Kazarian. In the call center, there is a concept in
health care called ``early out vendors,'' or pre-collect, and
what that is talking about is those financial advisors. These
are people--if I send that balance and call a patient and say
you've been referred to debt collection 30 days after you've
received the statement, then Fairview and hospitals all across
Minnesota are going to get complaints that that's been
escalated prematurely. ``Why did you send me for debt
collection? I just had questions that I didn't understand the
bill.''
So the reason the scripts and the language is different for
earlier debt than later debt is because we recognize the first
thing patients want to do, and I think your bill actually
contemplates it, is understand that the amount that you think
is due is an amount I understand. Once we agree on that, then
we can talk about how to take care of it. So that's the reason
for the different language around a call that's early where the
obligation might not be understood.
Senator Franken. I understand. I was referring to calls
that were a little bit later in the cycle, but let me move on.
Mr. Kazarian, in your letter to me you say that revenue
cycle employees ``revenue cycle employees work to communicate
with patients with the greatest possible compassion.''
Now, I have to say one of the most disturbing documents
I've seen in this investigation is an e-mail from an Accretive
revenue cycle employee who describes patients as deadbeats and
plebeians and who said--and these are his words--that he,
``really takes the approach of being stern and
calling people out for being stupid because if they
keep hearing it, they may eventually realize their
stupidity and possibly feel just a hint of guilt for
being such a schmuck.''
And this is the part of the e-mail that I can quote in an
open hearing. Believe it or not, most of what he says in the e-
mail, or a lot of what he says in the e-mail is even worse.
Now, obviously, what was written here doesn't square with
anyone's notion of compassion, so I have several questions
about this e-mail. First, when and how did you become aware of
this e-mail?
Mr. Kazarian. I became aware of it in gathering documents
that we'd been asked to gather in response to what was a
collaborative dialog we were trying to engage in with the
attorney general's office. She'd asked for us to voluntarily
produce some documents, and we were in that process.
Senator Franken. OK. Well, if you really didn't get it
until then, what did Accretive do to make sure that its
employees were following its policies about communicating with
patients?
Mr. Kazarian. First let me deal with one issue with respect
to that e-mail and that associate. That language, that attitude
does not square with our values, it is not consistent with our
values, and that employee was terminated within 24 hours of us
discovering that e-mail. So let me just, for everybody here,
make it clear that is not who we are and that's not what we do.
What do we do to make sure to detect somebody like that? We
have a--all of our collectors, we do a quality scoring of two
calls every day that we listen to, and not just for compliance
with law but for tone, for conduct, for professionalism. If an
associate does not reflect our company's values, they will not
work in our call center. That's how we listen for it, we troll
for it.
All of our calls are digitally recorded. A second feedback
loop is that if there's ever a patient complaint--it may come
to the hospital, it may come to the Better Business Bureau, it
may come from any source--if there's ever a patient complaint,
we can listen to that call. It's digitally recorded, and we can
determine whether or not they've acted with the care and
compassion we expect.
Senator Franken. So I take it that you had listened twice a
day to this employee?
Mr. Kazarian. We'd listened twice a day to this employee.
That tone and attitude hadn't been reflected. Then we took it a
step further, Senator, and after we discovered this e-mail I
asked our internal audit team to listen to another large group
of calls for that employee to make sure that that terrible,
offensive attitude hadn't crept into his exchange with patients
on the phone, with the idea that if there was anybody that I
needed to affirmatively reach out to as an officer of our
company, I wanted to do that.
Senator Franken. Doesn't an e-mail like this make you
concerned about the culture in the call center? I mean, if an
employee works in a setting where he thinks it's OK to send an
e-mail like this to his co-workers, doesn't that kind of mean
you have a real problem on your hands?
Mr. Kazarian. It could, and we looked very closely at that
issue. What I was somewhat comforted by was that the employee
who received the e-mail, you could tell by the response, was
taken aback and wasn't engaging. It wasn't as if this was an
exchange. It was, in fact--you could see in the tone somebody
who didn't want to engage in this exchange.
We spend a lot of time at that call center. We have records
we've shared with the Department of Commerce that indicate that
callers and collectors that don't reflect our values can no
longer stay with our company, and we'll keep working at that
every day. We listen to those calls and we believe in our
people.
Senator Franken. Mr. Kazarian, it seems like Accretive
often tries to pass blame off to Fairview. For example, in your
written testimony you say that Accretive, ``did not control
Fairview or its employees,'' and you say similar things
throughout your response to my letter, things that would lead
most readers to believe that Accretive did not have full
responsibility for Fairview's revenue cycle.
But in reality, isn't it the case that Accretive did assume
full responsibility for the management and cost of Fairview's
cycle, revenue cycle?
Mr. Kazarian. Senator, we work in our work in a partnership
model. At the end of the day, both practically and
contractually, if there is any disagreement with any aspect of
the revenue cycle work, the final authority sits with Fairview.
Now, having said that, I'm concerned if we've left you with
that impression. We viewed our work with Fairview as
collaborative. We saw it as a shared set of responsibilities. I
think what we were trying to simply assure people is that in
doing that practical work together every day, we are guided by
Fairview's values, and if at any point in time there is an
inconsistency between Fairview's value and a particular
practice we might be recommending, Fairview's policy and
Fairview's values will dictate what we do.
Senator Franken. It just seems that time and time again,
both in your written testimony and in your letter to me, that
you kind of pass off responsibility to Fairview employees and
that you don't take full responsibility for Fairview's revenue
cycle, and that's concerning to me because Accretive has said
in its SEC filings, in no uncertain terms, that Accretive,
``assumes full responsibility for the management and cost of a
customer's revenue cycle.'' Accretive says that it has, ``the
right to control and direct hospital staffs.'' It says that,
``we directly manage our customers' employees engaged in
revenue cycle activities.'' It even says you can fire the
employees. It says this in your SEC filing.
It seems to me that Accretive is saying one thing in the
SEC filings, that it does assume full responsibility, and that
Accretive is saying pretty much the opposite thing in the
documents that I got from you and in your written testimony
today, that Fairview is responsible, and I just don't get it.
Mr. Kazarian. Senator, at Fairview, as I've said, Fairview
wrote these partnership principles into our agreement. We
honored them. We were happy to provide for them. There is
language that says we have direct financial responsibility, and
that is the case. It is the case that if the cost of providing
revenue cycle services to Fairview rose beyond what they had
been previously, Accretive Health was fully responsible for
those costs.
Senator Franken. Well, it's not just--I'm sorry to
interrupt you there. It says in the filing ``assumes full
responsibility for the management,'' not just the cost.
Mr. Kazarian. And the only way I can reconcile that,
Senator, is the filings are written in a general template form.
They speak to a broad array of agreements. We have 26
agreements that are carefully negotiated over a period of time,
and different clients have different objectives in terms of how
they want our revenue cycle services to be governed in their
agreement.
The best way I can reconcile what you read in our agreement
with Fairview and what you read there is that it would seem to
me the SEC filing is written more broadly, and that in the
Fairview agreement our specific relationship with respect to
Fairview is set out there.
Senator Franken. OK. I would just remind you that you're a
public company. The SEC filings are there for a reason, so that
investors who are investing in Accretive can know what rules
it's operating under, and they seem greatly at odds with what
happened, with what you wrote to me in response to my questions
when I asked, ``Did Accretive employees do this?'' ``No, it was
Fairview, et cetera.'' So let's move on.
In your letter to me, you say that financial counseling was
optional for patients. I take that to mean that the patient
could choose whether or not to have a conversation with a
financial counselor. Is that right?
Mr. Kazarian. Correct.
Senator Franken. But the script Accretive gave to employees
to use when collecting payment made it look like those
conversations were anything but optional. For example, one
script teaches employees how to overcome objections from
patients. So my question is how are patients supposed to know
that these conversations were optional if nobody indicated in
any way that they were optional?
Mr. Kazarian. I don't know the specific scripting that
you're referring to, and there's a lot of scripting in
different scenarios. But what I would say to you is that at the
top of every one of our scripts around patient care is a bold
legend in red at Fairview that says not only are patients never
to be denied service for non-payment, they're never to be given
the impression that service would be denied for non-payment.
The role of these conversations is to help patients find a way
to resolve their contractual obligations, but more importantly
to educate them about these responsibilities. The information
below is to be understood only in that context.
So, Senator, again, I said in my opening statement we will
strive to be better every day, but what we believed we
communicated in our training is that balance of issues.
Senator Franken. I understand that that disclaimer was
there, or you say it was there. The scripts that I saw that
were produced by the AG's office do not have any disclaimers to
the patients. I mean, there was no way that the patients were
told that the conversation was optional in the scripts.
So how do you explain that? I mean, in other words, it's
one thing to put something instructing in red bold, OK, this is
our policy, but then to give your employees a script that
doesn't have a disclaimer saying, ``by the way, you don't have
to have this conversation with me right now''--how is a patient
supposed to know that this is an optional conversation?
Mr. Kazarian. Senator, I think the patient should
affirmatively be given that information, and I will look at our
scripting and I will make sure that that affirmative language
is explicit in multiple ways across the scripting. I take your
point, which is that it is the absolute intent that these
conversations are had at a time when patients are ready to
receive them, and if we can make our scripts better, then we'll
get at that work tomorrow.
Senator Franken. OK. Thank you very much.
Mr. Kazarian, I'm concerned that Accretive's employees had
access to more protected health information than they needed in
order to perform their duties. In Accretive's response to my
letter, Accretive says they developed a software tool to
restrict its employees' access to just a handful of data
points. These included things like the patient's name and
contact information, the person financially responsible for the
patient's care, the date of service, and a general description
of the diagnosis code. It seems to me that that would be all
that Accretive employees would need in order to collect debts
or do that part of the job.
But Accretive's response to my letter says that Accretive
did not even begin to implement this software until 8 months
into the contract with Fairview, that the tool was not even
operational until February 2011, which was about a year into
the contract, and even that some revenue cycle employees
continued to have access to Fairview's complete patient files
for a full year after that.
Now, that begs four questions. First, why did Accretive
wait until 8 months into its contract to begin limiting its
employees' access to protected health information?
Mr. Kazarian. That's perhaps a bit of a misperception. We
had a comprehensive plan to assure that employees working with
Fairview only had access to that health information minimally
necessary to do their job. I believe that the portion of our
response you're referring to relates to activities in the
Kalamazoo collection center. The Kalamazoo collection center
didn't start serving Fairview patients until, I believe, August
or September 2010. So that was part of the lag.
And then you had a mechanism--you had to decide how you
were going to have people access that information. Because the
legacy system--I think it was called PADS--at Fairview didn't
allow for the parsing of data as precisely as we would have
wanted, we had to build a custom, if you will, frame to receive
that information. So that's the--without getting too into the
weeds about the technology of it----
Senator Franken. Sure.
Mr. Kazarian [continuing]. Senator, that's my understanding
of that sequence.
Senator Franken. Thank you. Well, then, why did some
revenue cycle employees continue to have full access to
patients' protected health information even after the
restrictions were put in place?
Mr. Kazarian. So I'll bifurcate in that answer between
people who were doing the work at Fairview on the claim denial
and followup work, those people that were trying to overturn
the denials on pre-existing conditions, those people who were
trying to overcome the denials from a payer who said that the
procedure lacked medical necessity.
I think it's clear that those individuals doing that work
have a necessary reason for access to health information,
because they use it to advocate to get the claim paid. So
that's one group of people that had that access authorized by
Fairview, and I don't think there's any disagreement that that
particular access was appropriate.
In the call center, the approach that was taken was that
patients who were calling and wanted more information about
their case--I don't believe this charge or I wasn't at the
facility on that day, or I thought it was already paid--there's
two ways to approach that. One is to push the patient back to
the hospital. ``I'm sorry, you'll have to followup directly
with the hospital.'' Working with Fairview, we made the
judgment that it would be appropriate to have two or three
managers in the Kalamazoo call center with discrete access so
that they could handle that escalated patient question and be
more responsive.
You've asked about things we can think about in the future,
and there's an open question as to whether having that
escalation, the information necessary to handle that patient
query is appropriate. It's permitted today, and that's the
discrete purpose for which that would have been used.
Senator Franken. OK. It doesn't seem like it's actually
necessary if all that they're disputing is when the procedure
was done and what it was. That is the discrete information, the
minimum necessary information that anyone would need, and I
don't understand why they would need access to all their health
care information prior to that. I don't quite understand the
response.
But related to that, do you believe that Accretive complied
with HIPAA's minimum necessary requirement which says that
covered entities have to restrict their employees' access to
protected health information to only that which is needed for
the employees to perform their job?
Mr. Kazarian. Yes, Senator, I do. We had very clear
procedures and authorization mechanisms to make sure that if
our employees were being provided access to patient health
information, it was that amount minimally necessary to do their
work.
Senator Franken. OK. Matthew Doyle was a revenue cycle
employee, and an unencrypted laptop containing sensitive
information about 23,000 Minnesota patients was stolen from his
car. And I don't understand why Mr. Doyle had all that
information. The law says that Accretive may give its
employees, and you just said it does, only the minimum amount
of data necessary for them to do their jobs.
Why did Mr. Doyle, a revenue cycle employee, have all these
data?
Mr. Kazarian. There were two discrete sets of information
that Mr. Doyle had at the time that his laptop was stolen from
his vehicle. The first was the information relative to the work
he was doing in claims, claim followup, disability applications
and processing, and the nature of that work in the revenue
cycle.
The other was a discrete data file that he had in
connection with his work coming up to speed in our area, in our
work in the Quality and Total Cost of Care Program.
Senator Franken. He didn't work in that, though, did he?
Mr. Kazarian. No, he did not, sir.
Senator Franken. So he would only need that information if
he did work in that. I mean, he was in revenue cycle, and you
said in your letter back to me for my questions, you said that
you gave him that material because he was interested in
learning about the QTCC model that you do, but he wasn't an
employee for QTCC. I mean, he wasn't--knowing this information
isn't required unless you actually have that job. And here,
this information was left in a laptop in plain view, and there
was a smash and grab as you refer to it or as it's been
referred to, at Seven Corners. He was not a QTCC employee. He
was a revenue cycle employee.
OK, let me move on to the next question.
Accretive says it has a policy of encrypting all laptops,
and that seems like it's a common-sense policy to me. Right now
the law does not expressly require encryption of all protected
health information that is contained on laptops and other
portable media that are vulnerable to theft. For example, in
2011 you had nine laptops stolen.
Do you think the law should be updated to require that
practice? It is, after all, a practice that Accretive says it
has in place now.
Mr. Kazarian. I think that that's an appropriate change to
consider. I would tell you that one of the things that drives
people in the health care services arena to that standard is
that when you apply encryption and you do it, you fit within
the safe harbor of the high-tech act under HIPAA. So I'll leave
it to you and your colleagues to decide whether it sits better
sort of with that regulatory incentive rather than as a matter
of law. But one way or another, it is an important standard to
drive anybody that is receiving this information to.
Senator Franken. Thank you, Mr. Kazarian.
Mr. Kazarian, the attorney general alleges that patients
were charged for the predicted patient share of the service,
but that these predictions sometimes were inaccurate. The
attorney general also alleges that Accretive delayed refunding
over-payments. In one of the exhibits I saw, an excerpt from a
registration handbook, Accretive instructs employees not to
notify patients when they're talking to them that they have a
credit on their account. Instead, it tells them to say nothing
about the credit.
Why would Accretive instruct financial counselors not to
let the patients know if they had credits on their accounts?
Mr. Kazarian. Two answers to that, Senator. First, what
ought to be happening is that any patient balance, any patient
refund that's due ought to be remitted and transferred in a
check within 30 days of its determination. So the process ought
to be that if there's any patient refund due to a patient, that
patient ought to receive that patient refund within 30 days.
The reason you wouldn't engage in that at the time of
service is because you would have to coordinate those two
processes, and there are times when that identification of a
possible balance isn't an actual balance. So we'd be passing
paper back and forth.
We found if you focus your energy on getting payments,
refunds that are due, and putting that check in the mail, it's
the most straightforward way to make sure that the patient
knows you refunded that particular amount without the confusion
in an already confusing environment.
Senator Franken. If they hadn't received a refund after 30
days, would you then tell them?
Mr. Kazarian. That's a--let me take a minute to think about
that. I think it's a good idea.
Senator Franken. Well, I'm afraid you're going to have to
think about that a little later because we've run out of time
for this panel. But I want to thank you, Mr. Kazarian and Mr.
Mooty, for your testimony and for coming today and answering
questions. Thank you very much.
I now call the next panel.
Thank you.
Mr. Kazarian. Thank you for your interest, Senator.
Senator Franken. Thank you, gentlemen.
Now I'd like to introduce our third panel of witnesses, Tom
Fuller from New Brighton, and Deb Waldin from Edina. Both Mr.
Fuller and Ms. Waldin are former Fairview patients.
Ms. Waldin and Mr. Fuller, thank you so much for
participating in this hearing and for sharing your stories. I
know that it is not necessarily an easy thing to do.
My main goal here is to figure out whether existing law is
adequate to protect Minnesotans like you when you go to the
hospital. I also have a lot of questions about the evidence.
That's why I asked Accretive and Fairview and the attorney
general so many questions about the exhibits, the reports, and
the legal filings.
But it's really important that we not lose sight of the
human element of this, so I'd like to hear about your
experiences with Accretive and Fairview. So I'd just like to
ask you some questions.
Ms. Waldin, I'll start with you. I understand that you
visited Fairview's emergency room in July 2011. Why did you go
to the emergency room that day?
DEB WALDIN, FORMER FAIRVIEW PATIENT, EDINA, MN
I started experiencing some pain in my side that within an
hour just went off the charts with pain. So I had a friend take
me to the emergency room at Fairview Southdale. She dropped me
off, and I stood in line waiting for triage. I was in so much
pain that I marched to the front of the line and said I need
help here, I need some help right now.
And he got a wheelchair, he put me in a wheelchair to the
side, and I waited there for maybe 10 minutes. And then someone
came and took me into the room in the ER. I was put on a
gurney. By that time I was just in debilitating pain. I was in
a little ball in a fetal position wishing I could die. This
ultimately ended up being a kidney stone, which if anyone has
experienced that, is terrible pain.
Senator Franken. When you say you're in pain, doctors
sometimes use a scale of 1 to 10. On a scale of 1 to 10, what
were you experiencing?
Ms. Waldin. I wouldn't be exaggerating if I said a 12.
Senator Franken. OK.
Ms. Waldin. It was bad.
Senator Franken. Now, had you been given any pain
medications?
Ms. Waldin. No.
Senator Franken. Anything to relieve the pain before you
were approached by a billing employee?
Ms. Waldin. No. They started me on a morphine drip
afterwards, but I had not seen a doctor yet or had any kind of
pain meds.
Senator Franken. OK. So you're writhing in pain on the
gurney, and you're approached by a financial counselor. Was
anyone with you when you were asked for payment, or were you
alone?
Ms. Waldin. No, I was alone.
Senator Franken. How did you feel when the man came to your
cot and asked for the payment? Did you feel vulnerable? Did you
feel scared? How did you feel?
Ms. Waldin. Well, yes. I saw out of the corner of my eye, I
saw this little guy wheeling a podium with maybe a computer or
something on it. I wasn't sure. And I was just having such
pain, it was hard to process what he was saying, but I do
recall he said I needed to pay him between $700 and $800, and I
think it was like $750 or something. And I couldn't believe he
was asking me this at the foot of my bed as I'm laying there,
and I said I have insurance, I don't know what you're talking
about.
And to be clear, I didn't have any debt with Fairview. I
didn't owe them any money. I had no debt with them. And he was
asking for this money right then as I'm laying there, and I
just ultimately told him to get out of the room and go away,
and he did.
Senator Franken. OK. Now, as best you can recall,
understanding you were in a great deal of pain, had you been
seen by a doctor at that point?
Ms. Waldin. I don't believe I had been.
Senator Franken. OK.
Ms. Waldin. It seemed like a long time that I was waiting
for a doctor. But a long time when you're in that kind of pain
may not be that long. I'm not sure.
Senator Franken. Did you have medical insurance?
Ms. Waldin. Absolutely, yes.
Senator Franken. Would you have paid your bill even if you
had not been approached in this vulnerable state?
Ms. Waldin. Oh, I did pay my bill. Yes.
Senator Franken. OK, you did pay it when you were back at
home.
Ms. Waldin. Yes, yes.
Senator Franken. Do you think there's a better way to
collect payment from patients than the way you were treated in
the hospital? In other words, do you think trying to collect
from patients while they're in pain in the emergency room is a
bad policy?
Ms. Waldin. Yes, I think it's a very bad policy.
Senator Franken. Did you complain to anybody about the way
you were treated?
Ms. Waldin. Yes, I did. A couple of days later I called
Fairview and talked to maybe some patient representative. I'm
not sure who it was. And she didn't really have an answer for
me. It sounded like she didn't know what I was saying almost,
and I didn't get any--nothing happened from that. She just kind
of poo-pooed it. And then Fairview sends out a survey, at least
to me, maybe a week or two later to fill out your experience,
and without a doubt the doctors and nurses were fabulous, and I
want to make that really clear, that they were wonderful to me.
Senator Franken. So you were satisfied with the care that
you got from the doctors and nurses?
Ms. Waldin. Oh, absolutely. Once I got that, absolutely.
But I did write on that survey that this man had come in and
approached me under my circumstances that I thought was just
terrible.
Senator Franken. I think that is very important, that you
were very satisfied with the doctors and nurses at Fairview.
Ms. Waldin. Absolutely. I think they're getting a bad rap,
the whole Fairview is. The doctors and nurses were great.
Senator Franken. Thank you. Thank you very much, Ms.
Waldin.
Mr. Fuller, I'd like to ask you similar questions. Can you
tell us about what happened when you visited Fairview Hospital
in November 2011?
JOHN THOMAS ``TOM'' FULLER, FORMER FAIRVIEW PATIENT,
NEW BRIGHTON, MN
Mr. Fuller. I had been going to the hospital there for 3
years, never any problems. I had a lung transplant in January
2011, and I had many complications throughout the year. When I
went in for this procedure in November 2011, I still really
wasn't totally with it, and my wife had been taking care of all
the financial things, and she was there every time I was at the
hospital.
On that day, I checked in at the front desk, and they
always do all the check-in right there, put the little bracelet
on your wrist and sign the waiver. But this particular time the
person at the front desk said that so-and-so will be checking
you in. I thought it was awful weird because for 3 years
nothing like that had ever happened.
As I was being guided back down a hallway, my wife got up
to join me, as she always has, and the nurse says, ``No, no,
you'll be OK, you don't need to be in there.'' And they took me
into a small little office, about 10 square feet it seemed
like. The gentleman checked me in as usual, printed off some
papers, signed the waiver forms that are protocol, and then the
last thing he did is he put another piece of paper in front of
me which was a bill for $500-and-some.
I said, what's this? He said, well, you need to pay up on
your outstanding balance. And I said, outstanding balance? I
said we paid over $10,000 in this year, and we had gotten a
bill the past week, and our balance due was $380. And we were
unaware of any past due amount, and he--I just felt badgered
and I just got extremely upset.
Finally he said, well, I'll take a check or a credit card,
however you want to pay it, and I said I have no intention of
paying you anything right now, I'm going in for a procedure.
On the bill he wrote Accretive's name and a number and
another name for a person to talk to. I went out of the room
and everybody in that waiting room knew what happened in that
room. I was shaking. I was furious. Just nobody at that point
should be going through that. My wife, she called the guy on
the paper. We got home and she called him back, and they went
through it, and he kind of agreed that one of the charges on
there wasn't correct. But I finished my procedure and went
home.
Senator Franken. Now, you had undergone a lung transplant.
Mr. Fuller. A lung transplant, yes.
Senator Franken. So you were vulnerable. I mean, you were
weak at this point, right?
Mr. Fuller. I had many side reactions all year long from
the medications.
Senator Franken. And I understand they knew about your
condition, obviously, from your medical records, so they should
have been aware that you were in a compromised state.
Mr. Fuller. Oh, definitely.
Senator Franken. I understand you had visited Fairview many
times before, but about how many times?
Mr. Fuller. Starting October 2008, probably leading up to
the transplant, I'd bet you 50, 60 times a year.
Senator Franken. Had anyone ever demanded that you provide
a credit card to pay a bill when you came for a scheduled
procedure before this visit?
Mr. Fuller. Never.
Senator Franken. No.
Mr. Fuller. We had payment plans, and we stayed on top of
it. We were never late with a payment. We made a payment plan
for a certain amount that in a bad month, if we couldn't pay
the whole bill off, we had a cushion to fall back on. But we
paid the bills every month, and to our knowledge we were
satisfied. We only owed $380.
Senator Franken. Now, I understand you had asked for your
wife to come with you. Why was that?
Mr. Fuller. Because of the state of mind of where I was at
the whole year, I needed a second set of ears with me at most
times.
And they said that she didn't need to come in.
Senator Franken. OK. How did you feel during this, when you
were taken into this back room and pressed for a payment? Did
you feel like you were being shaken down?
Mr. Fuller. I was outraged. I was shaking. I was just
totally upset.
Senator Franken. Did you feel like the conversation with
the financial counselor was optional? In other words, did he
tell you that you didn't have to have that conversation?
Mr. Fuller. No. I was told to come back to this back room,
and he went through the normal spiel of checking in, and
without losing a breath he put the bill down and he started
asking me for money.
Senator Franken. Setting aside your experience with debt
collections, how was your experience with Fairview? Were you
satisfied with the care that you received from the nurses and
from the doctors?
Mr. Fuller. I can't express enough the care that I received
there, doctors and nurses, coordinators, food service people,
housekeeping. I spent many weeks off and on in the hospital,
and that's what really bothers me, because it's a great
facility. The people there are fantastic, caring, and the
people that had to talk to you, like on the phone, you knew
that they didn't want to be saying what they were saying.
Senator Franken. How are you doing now? How are you
feeling? I mean, this lung transplant, I can't imagine. You
were going in for the replacement of a trachea tube or
something like that that day?
Mr. Fuller. No, it was a feeding tube.
Senator Franken. A feeding tube. I'm sorry, a feeding tube.
Of course.
Mr. Fuller. Not a trache at all.
Senator Franken. Yes. And how are you doing?
Mr. Fuller. I'm doing better.
Senator Franken. Good, good.
Well, thank you both very much, Mr. Fuller and Ms. Waldin.
Thank you for being here today and being willing to testify.
You are now excused.
Ms. Waldin. Thank you, Senator.
Mr. Fuller. Thank you.
Senator Franken. Would the last panel come forward, please?
I'd like to introduce our fourth and last panel of
witnesses.
Jean Ross has been a registered bedside nurse for nearly 40
years and is a member of the Minnesota Nurses Association. She
was a nurse at Fairview Health Services and now is co-president
of National Nurses United.
Michele Goodwin is the Everett Fraser Professor in Law at
the University of Minnesota and holds joint appointments at the
University of Minnesota Medical School and the University of
Minnesota School of Public Health. Professor Goodwin is a
prolific scholar who focuses on the role of law in the
promotion and regulation of medicine, science, and
biotechnology.
And finally, Jessica Curtis is the director of Community
Catalyst's Hospital Accountability Project, where she advises
consumer advocates and policymakers on hospital financial
assistance and community benefits programs. Prior to joining
Community Catalyst, Ms. Curtis provided legal services to low-
income elders at Boston College's Legal Assistance Bureau.
Thank you, Ms. Ross, Professor Goodwin, and Ms. Curtis, for
joining us.
Ms. Ross, please go ahead with your testimony, and please
do keep it to 5 minutes. Thank you.
STATEMENT OF JEAN ROSS, RN, FORMER NURSE AT FAIRVIEW; CO-
PRESIDENT, NATIONAL NURSES ASSOCIATION; MEMBER, MINNESOTA
NURSES ASSOCIATION, ST. PAUL, MN
Ms. Ross. Senator Franken, thank you for holding this
important hearing on behalf of patients, family members, and
nurses at Fairview and all over the country. My name is Jean
Ross, and I am a registered nurse.
In December 2009, I was elected co-president of National
Nurses United and currently still hold this position.
Previously I worked as an RN for Fairview Southdale Hospital in
Edina, MN for over 35 years. The following is my personal
account of two different incidents involving the Fairview
healthcare system in the past 2 years that affected my family
and me.
In 2010, my infant grandchild was very ill over one
weekend. On a Friday and then again on Saturday night, I
accompanied my daughter and the baby for several trips to the
emergency room. This was at Fairview Ridges Hospital in
Burnsville, where he was eventually diagnosed with encephalitis
or meningitis and was then transferred to Minneapolis
Children's Hospital.
Our time at Ridges was made especially jarring, however, by
the actions of some ancillary personnel who had nothing to do
with the care of our young family member. My daughter was
extremely worried. She had many questions, but she was holding
up pretty well, until I left to use the restroom.
When I returned, she was holding the baby and sobbing. I
assumed she must have received some very bad news about the
baby's condition. Instead, I learned that while I, the nurse
and doctor were out of the room, a woman had come in and asked
if my daughter was willing to pay all or any part of her bill
now. My daughter told her, no, she could not.
As background, my daughter and her husband are among many
families hit hard with medical bills and changes to insurance
coverage. She certainly did not need reminders of her financial
position while under the stress of worrying about the condition
of her youngest child.
Now fast-forward to February of this year. My same daughter
has just delivered her third child at Fairview Ridges. Within
24 hours, a Fairview representative visits in her room with the
goal to extract some or all of the payment for the bill.
According to my daughter, this woman was at least apologetic.
She even confessed ``this is the least favorite part of my
job.''
Senator Franken, I spent much of my time at Fairview
Southdale working in the ER. While there, I witnessed no such
behavior. This kind of--I call it ruthless corporate behavior,
just wouldn't have been allowed.
A nurse's main focus is to advocate for patients and
families. We urge patients to put other worries aside and to
concentrate exclusively on healing. They certainly don't need
the added burden of being pressed for payment while they are
being treated. Every nurse wants to be proud of the work we do.
We expect policies that allow us to do our job properly. We
want to be able to speak well of the place that employs us.
Programs or policies that encourage or require bill
collection while a patient is being treated are, I believe,
unethical and don't belong in any health care setting. It does
not reflect well on any institution, and I'm very disappointed
in the system that employed me for so many years.
I am even more aggravated at an overall health care system
that doesn't allow universal access to all who are vulnerable
and which drives providers to this misguided and disgraceful
behavior. This is exactly why our trusted and proven system of
Medicare should be expanded so every man, woman and child could
be included in Medicare for all.
I thank you for your time.
[The prepared statement of Ms. Ross follows:]
Prepared Statement of Jean Ross, RN
Senator Franken, members of this hearing committee: Thank you for
holding this important hearing, on behalf of patients, family members
and nurses at Fairview and all over the country.
My name is Jean Ross, and I am a Registered Nurse. In December 2009
I was elected co-president of National Nurses United, and currently
still hold the position. Previously, I worked as an RN for Fairview
Southdale Hospital in Edina, MN for over 35 years.
The following is my personal account of two different incidents
involving the Fairview health care system in the past 2 years that
affected my family and me.
In 2010, my infant grandchild was very ill over one weekend. On a
Friday and then again on Saturday night, I accompanied my daughter and
the baby for separate trips to the Emergency Room at Fairview Ridges
Hospital in Burnsville, where he was eventually diagnosed with
encephalitis (or meningitis) and was then transferred to Minneapolis
Children's Hospital.
Our time at Ridges was made especially jarring however, by the
actions of ancillary personnel who had nothing to do with the care of
our young family member.
My daughter was extremely worried and had many questions but was
holding up well--until I left to use the rest room. When I returned she
was holding the baby and sobbing. I assumed she must have received some
bad news about the baby's condition. Instead, I learned that while I,
the nurse and doctor were out of the room, a woman had come in and
asked if my daughter was willing to pay all or any part of her bill
now. My daughter told her no, she could not. As background, my daughter
and her husband are among many families hit hard with medical bills and
changes to insurance coverage. She certainly did not need reminders of
her financial position while under the stress of worrying about the
condition of her youngest child.
Now fast forward to February of this year. My same daughter has
just delivered her third child at Fairview Ridges. Within 24 hours, a
Fairview representative visits my daughter's room with a goal to
extract ``some or all'' of the payment for the bill. According to my
daughter, this woman was at least apologetic, even confessing ``this
was the least favorite part of her job.''
Senator Franken, I spent much of my time at Fairview Southdale
working in the ER. While there I witnessed no such behavior. This kind
of ruthless, corporate behavior simply would not have been allowed.
Nurses' main focus is to advocate for patients and families. We urge
patients to put other worries aside and to concentrate exclusively on
healing. They certainly do not need the added burden of being pressed
for payment while they are being treated.
Every nurse wants to be proud of the work we do, and we expect
policies that allow us to do our job properly. We want to be able to
speak well of the place that employs us.
Programs or policies that encourage or require bill collection
while a patient is being treated are, I believe, unethical and do not
belong in any health care setting. It does not reflect well on any
institution, and I am very disappointed in the system that employed me
for so many years. I am even more aggravated at an overall health care
system that does not allow universal access to all who are vulnerable,
and that drives providers to this misguided and disgraceful behavior.
I thank you all for your time.
Senator Franken. Thank you very much. We'll handle that
last part in a different hearing, I think.
[Laughter.]
Ms. Ross. Just a hint.
Senator Franken. Professor Goodwin, your testimony, please.
STATEMENT OF MICHELE GOODWIN, EVERETT FRASER PROFESSOR IN LAW,
UNIVERSITY OF MINNESOTA, MINNEAPOLIS, MN
Ms. Goodwin. My testimony today covers two components.
Hopefully we'll get to the second. The first is to explain why,
as a matter of law and policy, Members of Congress should be
concerned about contemporary debt collection practices at some
U.S. hospitals; and the second is to share with you a set of
recommendations that can help move forward your inquiry beyond
investigation, the investigation stage, to exploring meaningful
options to improve patient access to health care, reduce if not
eliminate nefarious collection practices, and shore up a
commitment to patient privacy.
And I do commend you, Senator Franken, for chairing this
hearing and for moving forward in your efforts regarding
consumer protection against overreaching debt collection
practices.
The allegations outlined by Ms. Swanson's office are worthy
of your sustained attention because they outline a
disconcerting pattern of coercion, exploitation, fraud, near
extortion, quid pro quo emergency medicine, indifference to
patient privacy, and abuse of patients. These activities were
allegedly carried out under contractual relationships that
incentivized such conduct. These types of practices are not
protected by law. Indeed, these practices are an egregious
disregard of laws championed by Congress.
Specifically, the Emergency Medical Treatment and Active
Labor Act, EMTALA; the Fair Debt Collection Practices Act, the
FDCPA; and the Health Insurance and Portability Accountability
Act, otherwise known as HIPAA, are intended to protect patients
when they are at their most vulnerable. These laws are intended
to ensure patient privacy, access to medicine during
emergencies, as well as to provide not a mild but a very strong
check against fraudulent overreaching and duress-inducing debt
collection practices.
The FDCPA was enacted in 1978 specifically to guard against
the type of activities that have been described today. When
Congress enacted this law, the following was noted in section
802:
``There is an abundant evidence of the use of
abusive, deceptive, and unfair debt collection
practices by many debt collectors. Abusive debt
collection practices contribute to a number of personal
bankruptcies, to marital instability, to the loss of
jobs, and to invasion of individual privacy.''
Nearly 35 years later, this law is treated as a relic
rather than a living, robust feature of our Nation's promise to
its consumers. The FDCPA specifically prohibits the types of
practices that have been alleged by the attorney general's
office.
If the findings are correct from the attorney general's
office, we have a very clear violation of Federal law. I'll
point you to Section 805 of the FDCPA. In sub-section A it
states that that subsection prohibits collection agents from
communicating with any consumer at, ``any unusual time or
place, or time or place known or which should be known to be
inconvenient to the consumer.'' Certainly, emergency rooms with
people with feeding tubes in and the other kinds of situations
that we've heard about today are certainly inconvenient and not
the appropriate time or place.
My submitted testimony goes further.
I would point you to the EMTALA. The Minnesota Attorney
General's report outlined a range of nefarious practices,
including hospitals embedding debt collectors among their
staff, including in emergency rooms. If this is true, hospitals
deploying such tactics may have violated EMTALA if the
practices resulted in turning away patients in need of
emergency care.
To explain, in 1986 Congress enacted EMTALA to ensure
public access to emergency services regardless of the ability
to pay. What we know is that the legacy that preceded EMTALA
was one that was really quite a scar on our Nation's history.
It included turning away pregnant women who gave birth on the
side of roads. Sometimes people died. We know that there's been
a history in this country where African-Americans have
literally died on the steps of hospitals.
I would just simply close with also pointing out to you
that what we've heard today, and certainly what has come
through in your line of questioning, shows a clear disregard
for HIPAA as well, and patient privacy, being located on
laptops that have been stolen and that were not to be privy to
individuals who had clearly more patient information than they
needed for their debt collection practices.
I have recommendations that are submitted as part of the
written testimony.
[The prepared statement of Ms. Goodwin follows:]
Prepared Statement of Michele Goodwin
when federal law is undermined: the case of patient harassment
at u.s. hospitals
Chairman Harkin, Ranking Member Enzi, Senator Franken and members
of the U.S. Senate HELP Committee, my name is Michele Goodwin. I am the
Everett Fraser Professor of Law at the University of Minnesota, where I
also hold joint faculty appointments at the Medical School and the
School of Public Health. My prior credentials include the directorship
of one of the Nation's top 10-ranked health law programs, as well as
serving as the Chair of the American Association of Law School's
Section on Health Care Law. My work has been reviewed in or featured by
the New England Journal of Medicine, the Journal of the American
Medical Association, and Nature, among numerous other periodicals. I
speak with you today not only in my capacity as a law professor, but
also as a trained bioethicist.
I come before you this morning to provide testimony about patients'
access to care and privacy. Specifically, this testimony responds to
the urgency of your hearing. That is, are Federal laws protecting
patients? I commend your leadership for holding this very important
hearing and accepting my testimony.
My talk today covers two major components. The first is to explain
why, as a matter of law and policy, Members of Congress should be
concerned about contemporary debt collection practices at some U.S.
hospitals. The second is to share with you a set of recommendations
that can help to move your inquiry beyond the investigation stage to
the exploration of meaningful options to improve patient access to
health care, reduce if not eliminate nefarious collection practices,
and shore up a commitment to patient privacy. I commend Senator
Franken's efforts to provide more consumer protections against
overreaching collection practices, including the increased use of
warrants and the seizure of bank accounts to collect debt.
During the past several months, the Minnesota attorney general,
Lori Swanson, has investigated Accretive Health, Inc.'s debt collection
practices and their contractual relationship with Fairview hospitals,
located in Minnesota. From that investigation, disturbing allegations
have emerged that bring into question the effectiveness of current
Federal laws to secure patient privacy and access to care. To be clear,
the use of debt collection organizations to recoup hospital expenses is
not a new phenomenon, nor does that on its face violate Federal law.
Hospitals by law may utilize debt collection organizations to recover
overdue, unpaid fees. For hospitals, if they are to collect on patient
debt (just over $39 billion in uncompensated care in 2010), determining
what information can reasonably be shared with debt collection agencies
is a very important issue.
However, the allegations outlined by Ms. Swanson's office are
worthy of your sustained attention, because they outline a
disconcerting pattern of coercion, exploitation, fraud, near-extortion,
quid pro quo emergency medicine, indifference to patient privacy, and
abuse of patients. These activities were carried out under a
contractual relationship that incentivized such conduct. These
practices are not protected by law. Indeed, these practices are an
egregious disregard of laws championed by Congress.
The tactics that you have heard about today and some that are
described in this testimony, may be unscrupulous, but are they illegal?
If there is some illegal practice occurring, what is it? Are these
tactics (stalking at hospitals or embedding as medical personnel)
permissible if a patient refuses to pay medical bills or simply lacks
the financial resources to do so? In the Minnesota case, several
Federal laws appear to have been violated.
Specifically, the Emergency Medical Treatment and Active Labor Act
(EMTALA), the Fair Debt Collection Practices Act (FDCPA), and the
Health Insurance and Portability Accountability Act (HIPAA), are
intended to protect patients when they are most vulnerable. These laws
are intended to ensure patient privacy, access to medicine during
emergencies, as well as to provide not a mild, but a very strong check
against fraudulent, overreaching, and duress-inducing debt collection
practices.
The FDCPA,\1\ enacted in 1978, specifically guards against the
latter activities. When Congress enacted this law, the following was
noted in 802. Congressional findings point out:
---------------------------------------------------------------------------
\1\ See, http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf.
(a) There is abundant evidence of the use of abusive,
deceptive, and unfair debt collection practices by many debt
collectors. Abusive debt collection practices contribute to the
number of personal bankruptcies, to marital instability, to the
loss of jobs, and to invasions of individual privacy.
(b) Existing laws and procedures for redressing these
injuries are inadequate to protect consumers.
(c) Means other than misrepresentation or other abusive
debt collection practices are available for the effective
collection of debts.
(d) Abusive debt collection practices are carried on to a
substantial extent in interstate commerce and through means and
instrumentalities of such commerce. Even where abusive debt
collection practices are purely intrastate in character, they
nevertheless directly affect interstate commerce.
(e) It is the purpose of this title to eliminate abusive
debt collection practices by debt collectors, to insure that
those debt collectors who refrain from using abusive debt
collection practices are not competitively disadvantaged, and
to promote consistent State action to protect consumers against
debt collection abuses.
Nearly 35 years later, this law is treated as a relic rather than a
living robust feature of our Nation's promise to its consumers. The
FDCPA specifically prohibits the type of practices that Ms. Swanson's
investigation reveals to be common amongst Accretive employees. For
example, the law prohibits misrepresentation and deceit. According to
the attorney general's investigation, Accretive employees were embedded
amongst Fairview hospital's staff. Accretive employees hid in hospital
waiting rooms and even stalked patients in the convalescing rooms to
collect payments before and after treatments. These bed-side practices
highlight desperate hospital tactics to collect money and recoup
losses. But, the tactics are particularly troubling because they occur
when patients are most vulnerable: seeking emergency care for a range
of conditions, which may be life-threatening. The cases highlighted by
the attorney general's office detail clandestine debt collection
schemes that not only misrepresent hospital staff, but likely produce a
deterrent effect on individuals seeking treatment.
If these findings are correct, they reveal clear violations of
Federal law. Federal law obligates collection agents to reveal their
identity and the purpose(s) of their communication with consumers.
Accretive and Fairview hospital's failure to properly disclose
collection agents' identities and the purposes of their communication
with patients violates Federal law. I refer you to 805 of the FDCPA,
which specifically addresses communication in connection with debt
collection.
Subsection (a) prohibits collection agents from communicating with
any consumer ``at any unusual time or place or a time or place known or
which should be known to be inconvenient to the consumer.'' Interfering
with patients' emergency care through a barrage of questions and
attempts to exact moneys before treatment at hospitals indicates a
pernicious pattern of violation that rises to the level of brazen
disregard of Federal law. The purpose of the FDCPA was to shield
consumers from the unfettered reaches of debt collection agents by
limiting location, method, and hours by which consumers could be
contacted. However, this type of debt collection practice--in person
harassment at the point of service--exemplifies the worst type of
patient-chasing.
Section 807, subsection (5), speaks to these concerns as it
prohibits collection agencies from ``threat[ening] to take any action
that cannot legally be taken or that is not intended to be taken,''
which is important in this particular context as much of these
activities are reported to have occurred during emergency visits to
hospitals.
The Minnesota attorney general's report \2\ outlined a range of
nefarious practices,\3\ including hospitals ``embedding'' debt
collectors among their staff, including in emergency rooms. If this is
true, hospitals deploying such tactics may have violated EMTALA if the
practices resulted in turning away patients in need of emergency care.
To explain, in 1986, Congress enacted EMTALA ``to ensure public access
to emergency services regardless of ability to pay.'' Specifically,
---------------------------------------------------------------------------
\2\ See, Compliance Review of Fairview Health Services' Management
Contracts with Accretive Health, Inc. at http://www.ag.state.mn.us/PDF/
PressReleases/ComplianceReview/Volt.%201.
pdf. (Volumes 1-6 can be found here: http://www.ag.state.mn.us/)
\3\ See, Compliance Review of Fairview Health Services' Management
Contracts with Accretive Health, Inc Volume Two-Culture Wars at http://
www.ag.state.mn.us/PDF/PressReleases/ComplianceReview/Volt.%202.pdf.
Section 1867 of the Social Security Act imposes specific
obligations on Medicare-participating hospitals that offer
emergency services to provide a medical screening examination
(MSE) when a request is made for examination or treatment for
an emergency medical condition (EMC), including active labor,
regardless of an individual's ability to pay. Hospitals are
then required to provide stabilizing treatment for patients
with EMCs. If a hospital is unable to stabilize a patient
within its capability, or if the patient requests, an
appropriate transfer should be implemented.\4\
---------------------------------------------------------------------------
\4\ See, Emergency Medical Treatment & Labor Act (EMTALA), at
http://www.cms.gov/Regulations-and-Guidance/Legislation/EMTALA/
index.html?redirect=/EMTALA/.
Indeed, the very purpose of this law is to ensure that patients in
emergency situations are not turned away, sent off, or refused
treatment. The legacy preceding EMTALA's enactment involved ``patient
dumping,'' a term used to describe the denial of emergency care to
individuals because of their insurance status (or lack thereof),
poverty, or even racial and gender status. Some patients died as a
result of ``dumping'' or their conditions worsened. Quite relevantly,
such decisions were neither medically nor ethically justifiable.
Pregnant women were dumped if their pregnancies were perceived as
complicated, often requiring them to deliver in compromised and
unsanitary conditions, including in their cars while en route to other
hospitals located miles away. This was particularly problematic in
rural communities. Sick children without health insurance were dumped
if their parents--working class Americans--lacked health coverage. And,
years ago, black patients died on the steps of hospitals that refused
to treat ``colored'' people. This is a shameful legacy, but EMTALA
provided hope, backed by law for a new era. EMTALA was a bold
congressional effort to ensure care for sick Americans and others when
at their most vulnerable.
EMTALA was inspired by a noble, American vision. That is, Our
commitment to patient access and the flourishing of human development
cannot be subordinated or conditioned on money. The law specifies that
hospitals may not start any payment processes or billing until after
the patient has been stabilized to such a degree that working out
billing will not detract from, interfere with, or compromise the
patient's health care.
When collection agencies systemically and brazenly interfere with
patients' efforts to seek and receive emergency care at hospitals, the
law becomes more illusory than real. By this, I mean to impress upon
you that the law must be more than what is scribed in order to
effectuate real meaning and achieve congressional goals. Harassment at
hospitals at the time of service, before service and after service
symbolically and substantially interferes with and undermines the
spirit of this legislation. EMTALA was not intended to provide a new
opportunity for bill collection at the point of emergency care.
Specifically, legislators sought to prohibit money chasing in exchange
for medical care. The law does not tolerate a medical quid pro quo in
this regard.
Just briefly, before outlining a few recommendations, I want to
turn your attention to HIPAA,\5\ a Federal law that protects patient
privacy and restricts certain uses of patient information without their
consent. Under HIPAA, hospitals are subject to the ``Privacy Rule,''
which forbids data sharing or disclosures about ``individuals' health
information.'' Again, the attorney general's office found significant
and systemic breaches of patient privacy. Among their findings were
examples of collection agencies having direct access to full patient
files, which include dates of birth, social security information,
health information, and other sensitive data. When concerns were raised
about these direct violations of Federal law, the concerns were
dismissed. The immediate focus of this hearing relates to patient
access and health, but an extended concern must include identity theft
and data mining.
---------------------------------------------------------------------------
\5\ See, http://www.hhs.gov/ocr/privacy/hipaa/understanding/
summary/index.html.
---------------------------------------------------------------------------
I urge you to evaluate these issues as matters of concern that
extend beyond Minnesota.
part ii: recommendations
How might we move forward? The problems outlined today concerns not
only formal law, but also public policy and ethics. The laws
highlighted in my testimony are likely regularly trespassed due to poor
enforcement and accountability mechanisms at the local and Federal
levels.
The important question here today, is what do we prioritize:
patient health or corporate profit at all costs? That you sponsor this
hearing is evidence of your aspiration that there must be dignity in
the delivery of medicine.
As described above, debt collection harassment at hospitals is an
illegal practice. However, the protections for patients are rather thin
and there are no real disincentives to reduce such behavior. Hospitals
have every incentive to engage in aggressive and sometimes illegal debt
collection practices, because they desire to recoup losses, but also
there are so very few disincentives. The damages awarded to aggrieved
patients are minimal. Indeed, the potential recovery of $1,000 for a
successful claim under the FDCPA is so minimal that patients may be
less-inclined to pursue these matters because recovery is so limited.
There is a significant problem with proportionality given the
significant trauma that a family or individual may endure from
egregious debt collection practices and the revenue these industries
generate. To better discourage unfair debt collection practices there
are a few matters that should be considered.
First, aggrieved consumers deserve a recovery that is more than
symbolic; $1,000 does not provide the type of award that meets
inflation standards. Medical costs have skyrocketed since the enactment
of the FDCPA. The maximum statutory damages reflect the original 1977
version of the law. Further, even though that penalty by current
standards might be about $4,000, even that is not a sufficient remedy
for the consumer, nor is it an adequate penalty for the debt
collectors. A more reasonable cap is $15,000. This is not to suggest
that all awards would be this amount, but it does provide room for the
more egregious cases, an incentive for consumers to ``inform'' on
companies, and a sufficient deterrent to firms that violate the law.
Second, the FDCPA seemingly gives an out to the agency/company that
hires debt collectors who engage in ``unfair'' or egregious debt
collection practices. Fining the medical groups and hospitals that
knowingly contract with companies that break the law would be a means
of joining the liability. Joint and vicarious liability is a well-
established concept in tort law and it provides particular traction in
these cases.
Third, introducing criminal sanctions in this domain is well worth
considering. As described above, the incentives and disincentives are
ill aligned in matters such as those under your review. In the worst
case scenario, a company may be subject to a $1,000 penalty, which will
be paid to an aggrieved consumer, but the punishment is symbolic and
more illusory than real. Criminal sanctions are appropriate in
instances where the proportion of harm is consistent with the level of
breach. In other words, where the conduct could reasonably be
understood to result in substantial humiliation, emotional distress,
and reckless violation of Federal laws, a criminal sanction could be
reasonable. There are two approaches you might consider: (a) every
violation of the FDCPA might result in a fixed penalty payable to the
State or Federal Government; (b) each penalty might incur a different
level fine depending on the scope and nature of the violation. Here
intent, the degree of harm, and prior infractions might be relevant.
Fourth, registration and de-licensure are worth considering. In
other words, the threat of losing the privilege to do business in a
State should be considered to address repeat offenders. In thinking
about creating new consumer protection norms, new norms must be
fostered.
Fifth, when considering how these matters should be addressed on
the front end, I urge you to evaluate hospital information-sharing on
the front end. There are problematic information asymmetries between
patients and hospitals. For example, patients are expected (required)
to disclose billing information, ranging from their places of
employment, insurance, and contact information for themselves as well
as close relatives. Historically, this has been perceived as important
for the delivery of medicine. The testimony today and Ms. Swanson's
investigation indicate that hospital information collection also has
another purpose, including debt collection. Yet, hospitals do not
provide clear, detailed information regarding their collection
practices, who they use to collect the debts, how those practices may
affect the patient, or how the patient's sensitive personal information
may be shared with third party collection agents. This is an
information gap that can be filled. It will empower patients and may
help hospitals in building trust with their patients.
In closing, these issues are relatable to all Americans. Each of us
has experienced the fear, anxiety, and concern for a loved one's health
if not our own while at an emergency room. That should be the last
place in which social goods are distributed based on status.
Thank you for providing me the opportunity to present this
testimony. It is an honor to participate in this process and I look
forward to your questions ([email protected] Michele Goodwin).
Senator Franken. Yes, all the written testimony is part of
the record.
Thank you, Professor Goodwin.
Ms. Curtis.
STATEMENT OF JESSICA L. CURTIS, J.D., DIRECTOR, HOSPITAL
ACCOUNTABILITY PROJECT, COMMUNITY CATALYST, BOSTON, MA
Ms. Curtis. Good morning, Senator Franken. I'm grateful for
the opportunity to testify today. My name is Jessica Curtis,
and I direct the Hospital Accountability Project at Community
Catalyst for a national non-profit consumer advocacy
organization that focuses on health issues. The project works
with hospitals, community groups, and policymakers to improve
access to care and protect patients to the greatest extent
possible for medical debt arising from hospital bills. We track
public policies and have developed standards and model
legislation that hospitals and policymakers alike can use to
make billing collections fair for patients.
I think it's worth noting that in 2011, one in five people
in the United States reported that their family had difficulty
paying a medical bill, and 1 in 10 reported having a medical
bill that they could not pay at all. Insurance coverage alone
is no protection against medical debt. About 76 percent of
those with medical debt reported having had health insurance
when they acquired it.
Today I hope to provide some context by looking at what
makes medical debt unique, the role hospital billing and
collections policies have played in its proliferation, and what
can be done to address these problems.
First, medical debt can be distinguished from other types
of consumer debt. As many have noted, with very few exceptions,
patients attempting to access health care services do so out of
medical necessity. Illness and injury are unpredictable and
involuntary, and the stakes for patients are very high.
Delaying care could result in disability or even death.
A patient seeking care in a hospital's emergency room is in
no position to bargain for a better deal and in that sense
starts from a very different place than a person walking into a
big-box store to purchase a flat-screen television. Even with
perfectly transparent prices, which we do not have in health
care today, patients do not know in advance what their
diagnosis and treatment options will be or whether
complications, which are not always preventable, will occur.
The long-term effects of medical debt can be devastating.
Over 60 percent of all bankruptcies can be traced back to
medical debt or illness. Others have linked medical crises to
home foreclosures. As family finances shrink, low- and middle-
income families resort to using credit cards to pay down
medical bills, but this strategy leaves them susceptible to
high interest rates and lower credit scores. And medical debt
has been shown to have a chilling effect on patients'
willingness or perceived ability to seek care in a timely way.
To keep costs down, the uninsured and underinsured forego care
more frequently than people with better coverage.
So how do hospital billing and collections policies
contribute to medical debt? First we have to recognize that
there are good public policy reasons to look to hospitals to
promote care, their mission, tax status, public subsidies,
social and corporate responsibility; and, quite simply, for
America's 50 million uninsured, hospital charges are simply out
of reach.
But too often, hospitals have been cited for aggressive
billing and collection strategies, like failing to screen or
notify patients about public programs or their own financial
assistance policies before using more aggressive tactics to
collect; deciding to offer financial assistance or payment
plans based on a patient's propensity to pay rather than their
ability to pay; using credit scores to determine a patient's
access to lines of credit; placing liens on patient homes or
garnishing wages; and over-charging the uninsured and
underinsured for care.
These complaints are common, the impact is devastating, and
quite frankly, we have been here before. In the early 2000s,
backlash against aggressive collection tactics prompted
hospital groups to issue voluntary billing and collection
standards. Clearly, more is needed to protect patients from
hospital bills they simply cannot pay.
So we recommend a three-pronged strategy that I'll just
quickly cover. The first is we need to clarify the roles that
hospitals have on billing and collection. And right now,
there's a ready-made tool to protect patients as far as non-
profit hospitals go. Section 9007 of the Affordable Care Act
put limitations on what hospitals can do to collect on patient
bills and the timing with which they have to inform patients
about these options.
Second, we need to expand coverage to care.
And third, I do believe that we need to expand the debt
collection protections that are available to patients.
Thank you.
[The prepared statement of Ms. Curtis follows:]
Prepared Statement of Jessica L. Curtis, J.D.
Good morning, Chairman Harkin, Ranking Member Enzi, and
distinguished Senators. I am grateful for the opportunity to testify
before you today.
My name is Jessica Curtis. I direct the Hospital Accountability
Project at Community Catalyst, a national non-profit consumer advocacy
organization that has been giving consumers a voice in health and
health care since 1997. My organization works to promote pragmatic,
consumer-friendly solutions to the obstacles many low- and middle-
income people face in staying healthy and accessing the care they need.
Medical debt is one such obstacle, and we have been a leading consumer
voice investigating its causes and pushing for rational policy
solutions for many years.
Through the Hospital Accountability Project, we work with hospital
leaders, community groups, public health organizations, and
policymakers to improve access to care and protect patients to the
greatest extent possible from medical debt arising from hospital bills.
Out of this work, we have developed standards and model legislation
that hospitals and policymakers can use to craft institutional and
public policies, respectively, that make the billing and collections
process fair, clear, and transparent for patients. We also track and
inform developments in State and Federal policy related to hospital
financial assistance, billing and collections.
My comments today will aim to provide some context for medical debt
by answering: What is medical debt, and how is it unique? In what ways
does it impact patients' access to care and financial well-being?
Finally, what can be done to address these problems and protect
families from its harmful effects?
introduction
First, though, I'd like to start with a story. In April 2008, the
Wall Street Journal drew national attention to the story of Texas
resident Lisa Kelly, a former school bus driver whose battle with
leukemia found her facing an unlikely adversary: the business
department of the M.D. Anderson Cancer Center, a non-profit hospital
affiliated with the University of Texas and the country's premier
specialty hospital for cancer treatment and research at the time.\1\
When her doctor referred her to M.D. Anderson, Mrs. Kelly tried to
schedule an appointment only to be told that the hospital did not
accept her insurance.\2\ From the hospital's perspective, she was
uninsured and would have to present a certified check for $45,000 in
order to make her initial appointment.\3\ Mrs. Kelly managed to meet
that deadline and see a hospital oncologist, who wanted to admit her
immediately. But the hospital's business office told her that she would
need to pay another $60,000 up front in order to be admitted, despite
the fact that she and her husband were unable to meet that demand. \4\
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\1\ Barbara Martinez, ``Cash Before Chemo: Hospitals Get Tough,''
The Wall Street Journal, April 28, 2008, at A1. For M.D. Anderson
Cancer Center's national ranking, see ``America's Best Hospitals
2008,'' U.S. News and World Report (2008).
\2\ Martinez, supra note 1.
\3\ Id.
\4\ Id.
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When Lisa Kelly's story went public, it became clear that her
experience was the result of a policy to demand up front payment from
uninsured and underinsured patients implemented by M.D. Anderson's
business office to reduce the hospital's unpaid patient bills, or bad
debt.\5\ The policy led to interruptions in Mrs. Kelly's care and
severely impacted her family's long-term financial future. At the time
of the article, the family was making monthly payments of $2,000 to
M.D. Anderson in order to pay off the $145,000 they accrued in medical
bills from Mrs. Kelly's treatment.\6\
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\5\ Id.
\6\ Id.
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What happened to Lisa Kelly--the discovery that the insurance
policy she could afford was inadequate to cover the costs of her care;
repeat encounters with a hospital business office demanding money she
did not have; the crushing debt she acquired due to a diagnosis she
could neither predict nor control--is part of a larger phenomenon that
is being relived daily in hospitals and medical offices around the
Nation. Similar stories have emerged from North Carolina to California.
The question is, what can be done?
medical debt: a special case
Medical debt is simply ``money owed for any type of medical service
or product'' to a provider or third-party agent, such as a collection
agency.\7\ Medical debt arises when providers classify the money a
patient owes for health care services as bad debt--that is, payment for
services that a hospital expected to receive but was unable to
collect.\8\ As this definition suggests, classifying a patient's
account as bad debt almost certainly means that the provider or its
collection agency has pursued the bill through the collections process.
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\7\ Statement of Mark Rukavina before the U.S. House of
Representatives Committee on Financial Services, Subcommittee on
Financial Institutions and Consumer Credit, on ``Use of Credit
Information Beyond Lending: Issues and Reform Proposals,'' May 12,
2010.
\8\ See American Institute of Certified Public Accountants, Audit
and Accounting Guide: Health Care Organizations (2006); American
Hospital Association, American Hospital Association Uncompensated
Hospital Care Cost Fact Sheet, October 2006; Catholic Hospital
Association, A Guide for Planning and Reporting Community Benefit,
2006. Bad debt should be contrasted with charity care, or financial
assistance, that is written off due to a patient's inability to pay.
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Medical debt is the outcome of a unique type of consumer
transaction--Medical debt can be distinguished from other types of
consumer debt in several ways. First, consider the circumstances under
which it arises. With very few exceptions, patients--or, health care
``consumers''--attempting to access health care services do so out of
medical necessity. Illness and injury are unpredictable and
involuntary. In addition, the stakes for patients are very high: the
decision not to seek medical care due to lack of insurance or potential
cost could result in disability or death. A patient seeking care in a
hospital's emergency room is in no position to bargain for a better
deal, and in that sense starts from a very different place than a
person walking into a big-box store to purchase a flat-screen TV.
Second, patients have no way of knowing the cost of treatment in
advance, making medical care--especially hospital care--very different
from normal consumer transactions. Even with perfectly transparent
prices, patients do not know in advance what their diagnosis and
treatment options will entail, or whether complications (which are not
always preventable) will occur.
Medical debt is a widespread problem--The number of Americans
struggling to pay medical bills is startlingly high. In the first half
of 2011, one in five people in the United States reported that their
family had difficulty paying a medical bill.\9\ One in four reported
they were in a family paying a medical bill off over time; remarkably,
1 in 10 reported they or a family member were currently responsible for
a medical bill they could not pay at all.\10\ Families with children
and adults under the age of 65 have been hit particularly hard, with a
disproportionate burden falling on low-income, Hispanic and black
families.\11\
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\9\ Robin A. Cohen, Renee M. Gindi, Whitney K. Kirzinger. Financial
Burden of Medical Care: Early Release of Estimates from the National
Health Interview Survey, January-June 2011. Division of Health
Interview Statistics, National Center for Health Statistics, Centers
for Disease Control and Prevention, March 2012.
\10\ Id.
\11\ Id.
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Medical debt is a threat to physical and financial health--For
patients, the long-term effects of having a medical bill sent through
the collections process can be particularly devastating. First, medical
debt plays a significant role in driving families deeper into economic
distress. One well-known study posited that over 60 percent of all
bankruptcies could be traced back to medical debt or illness.\12\ A
2007 preliminary study of home foreclosures in four States cited
medical crises as a contributor to half of home foreclosures.\13\ As
family finances shrink, many more low-and middle-income families resort
to using credit cards to pay down medical debt. \14\ However, this
strategy leaves them susceptible to high interest rates and can lead to
lowered credit scores.\15\ In August 2011, the New York Times reported
that 20 percent of clients seeking financial counseling from Atlanta-
based CredAbility, a national non-profit credit counseling agency,
cited medical debt as the primary reason they were seeking bankruptcy--
up from 12 to 13 percent the previous 2 years.\16\
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\12\ David U. Himmelstein, Elizabeth Warren, Deborah Thorne, &
Steffie Woolhandler, Illness and Injury As Contributors to Bankruptcy,
Health Affairs Web Exclusive, February 2, 2005 [hereinafter
Himmelstein, et al.].
\13\ Christopher Robertson, Richard Egelhof, & Michael Hoke, Get
Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures,
Harvard Law School, August 2007.
\14\ One survey report found that medical bills and unemployment
were among the leading contributors to credit card debt for low- and
middle-income families, with 55 percent of survey respondents with poor
credit citing medical debt as a contributing factor. Amy Traub and
Catherine Ruetschlin, The Plastic Safety Net: Findings from the 2012
National Survey on Credit Card Debt of Low- and Middle-Income
Households, Demos, May 22, 2012.
\15\ Id.
\16\ Ann Carrns, ``Medical Debt Cited More often in Bankruptcies,''
New York Times, August 8, 2011.
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Second, medical debt--or the threat of it--can have a chilling
effect on patients' willingness or perceived ability to seek care in a
timely way. Skipping recommended followup care, not filling
prescriptions, and delaying physician or specialist care when medical
problems arise are all commonly reported behaviors among families
carrying credit card debt.\17\ In families that lost insurance coverage
due to unemployment, just under three-quarters report using one of
these strategies to keep costs down.\18\ And in one national survey,
about 1 in 10 Americans living with a serious illness, medical
condition, injury or disability ``report being turned away by a doctor
or hospital for financial or insurance reasons at some time during the
past 12 months when they tried to receive care.'' \19\
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\17\ See Plastic Safety Net, supra note 14, at Table 7.
\18\ Michelle M. Doty, Sara R. Collins, Ruth Robertson, and Tracy
Garber. Realizing Health Reform's Potential: When Unemployed Means
Uninsured: The Toll of Job Loss on Health Coverage, and How the
Affordable Care Act Will Help. The Commonwealth Fund, August 2011.
\19\ NPR/Robert Wood Johnson Foundation/Harvard School of Public
Health, Poll: Sick in America Summary, Released May 2012.
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what causes medical debt? lessons from the states
Three main factors contribute to medical debt: lack of
comprehensive coverage; provider practices to collect on debts that
range from the inappropriate to egregious; and a lack of strong public
policies and oversight. The result is that too many Americans fall
through gaping holes in the very same safety net on which they, of
necessity, must rely.
Lack of affordable health coverage--Approximately 50 million people
living in America lack health insurance.\20\ A recent report by the
Department of Health and Human Services (HHS) found that hospital
charges are simply out of reach for many of these uninsured families,
with most families able to afford only 12 percent of the cost of a
hospital stay.\21\ Even uninsured families with relatively higher
incomes (over 400 percent of the Federal Poverty Level) could afford
only 37 percent of the stay.\22\
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\20\ Overview of the Uninsured in the United States: A Summary of
the 2011 Current Population Survey. Assistant Secretary for Planning
and Evaluation, U.S. Department of Health and Human Services, September
2011.
\21\ The Value of Health Insurance: Few of the Uninsured Have
Adequate Resources to Pay Potential Hospital Bills, Assistant Secretary
for Planning and Evaluation, U.S. Department of Health and Human
Services, May 2011.
\22\ Id.
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Another 29 million people living in America are underinsured.\23\
This is due in part to rising out-of-pocket expenses--higher premiums,
higher co-pays and coinsurance, and higher deductibles--as well as a
rise in plans that either limit benefits or cap coverage. \24\
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\23\ See Schoen, C., Doty, M., Robertson, R., and Collins, S.
Affordable Care Act Reforms Could Reduce the Number of Underinsured
U.S. Adults by 70 Percent. Health Affairs vol. 30 no. 9 (1762-71),
September 2011.
\24\ Examples of such plans include hospital-only plans, plans that
do not cover prescription drugs or mental health services or cap
coverage for these services, or those that set lifetime or annual caps
on what the plan will pay.
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Uninsured and underinsured patients are more susceptible to medical
debt. When compared to people with adequate coverage, both groups
forego care due to costs at rates that are twice as high for the
underinsured and three times as high for the uninsured.\25\ And the
uninsured and underinsured struggle with medical debt at higher rates
than those with better coverage.\26\ For many, skimpy coverage is just
as bad as no coverage. About 76 percent of those in medical debt
reported having health insurance when they acquired the debt.\27\
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\25\ Schoen, et al., Affordable Care Act Reforms . . .
Underinsured, supra note 23.
\26\ To give one summarizing statistic, 52 percent of the
underinsured and 58 percent of the uninsured report medical debt or
problems paying medical bills, compared to 27 percent of those with
insurance. Id.
\27\ Himmelstein, et al., supra note 12.
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Despite obligations to provide access to care, many hospitals are
using or authorizing billing and collection tactics that contribute to
medical debt--Through our work on the Hospital Accountability Project,
Community Catalyst has found that hospitals play a significant role in
promoting access to care and avoiding medical debt. There are good
public policy reasons to look to hospitals to promote care, including:
Mission. Hospitals often base their organizational
missions on core values that expressly articulate a community-focused
approach, irrespective of an individual's ability to pay or any
external legal obligation to do so.
Tax Status. By filing for tax-exempt status, non-profit
hospitals have covenanted with the public to provide financial
assistance and other forms of community benefit in exchange for the
highly valuable Federal, State, and local tax breaks and other benefits
they receive as a result of that tax-exempt status.
Public subsidies. Many hospitals receive Disproportionate
Share Hospital (DSH) payments and money from other public funds that
indirectly subsidizes a significant portion of their costs for
providing uncompensated care.
Social and corporate responsibility. All hospitals, non-
profit and for-profit alike, have a social responsibility to provide
some amount of financial assistance since health care is an ``essential
service''--particularly in areas where there are few acute care
providers.
But in many places, hospitals' financial assistance, billing and
collections policies have been shown to be inadequate, inappropriate,
or even harmful. Hospitals have been cited for:
Failing to screen patients for eligibility for public
programs or the hospital's own financial assistance policy prior to
engaging in more aggressive collection activity \28\;
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\28\ In a random national survey of 99 nonprofit hospitals
conducted in 2009, researchers found that fewer than half of hospitals
surveyed (42) provided charity care application forms; only a quarter
(26) gave information about eligibility criteria; and just over a third
(34) offered information about charity care in languages other than
English. C. Pryor, et al. Best-Kept Secrets: Are Non-Profit Hospitals
Informing Patients About Charity Care Programs?, The Access Project and
Community Catalyst, May 2010. See also, e.g., Ames Alexander, Karen
Garloch & Joseph Neff, Prognosis: Profits, Charlotte Observer and
Raleigh News & Observer, April 22-26, 2012; Nina Bernstein, Hospital
Flout Charity Aid Law, New York Times, February 12, 2012.
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Failing to notify patients of the availability of these
programs, and even denying that they offer free care \29\;
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\29\ Id.
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Deciding to offer financial assistance or payment plans
based on a patient's propensity to pay, rather than ability to pay;
Using credit scores to determine a patient's access to
lines of credit;
Requiring significant up-front payments before providing
treatment \30\;
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\30\ Jessica Silver-Greenberg, Debt Collector Faulted for Tough
Tactics at Hospitals, New York Times, April 24, 2012.
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Mounting extremely aggressive collection practices,
including placing liens on patients' property or garnishing their
wages;
Selling off patient accounts to third party lenders that
charge exorbitant interest rates \31\; and
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\31\ Brian Grow and Robert Berner, Fresh Pain for the Uninsured,
Business Week, November 21, 2007.
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Overcharging the un- and underinsured for care.\32\
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\32\ Hospitals charge self-pay patients, including the uninsured
and underinsured, 2.5 times the rates insurers paid and three times the
hospital's Medicare-allowable costs for the same services. Gerard F.
Anderson, From ``Soak the Rich'' to ``Soak the Poor'': Recent Trends in
Hospital Pricing, 26 Health Affairs 3 (2007).
These practices all create obstacles for patients seeking access to
care. In Community Catalyst's work with State and local partners, these
complaints are common, and the impact on patients is devastating.
What makes these practices even more abhorrent is that they are not
necessary for hospitals to remain financially viable. Treating patients
fairly and having clear, transparent, and strong policies for financial
assistance and billing makes good business sense. In a September 2008
outlook report, Fitch Ratings commented on the apparent correlation
between stability in hospitals' median operating margins and some
consumer-friendly practices, such as developing strategies to better
identify Medicaid-eligible patients and revisiting financial assistance
policies.\33\ Increasingly, industry experts are advising hospitals to
implement best practices for financial assistance, billing and
collection.\34\ And in many States, low-income patients who currently
qualify for hospital financial assistance programs will be newly
eligible for Medicaid, subsidies, or other coverage when Affordable
Care Act reforms take full effect in 2014. In Massachusetts, for
example, hospitals were able to help the State identify and ``flip''
patients who received safety-net services into public coverage programs
after State-level reforms.\35\ This sped up enrollment significantly,
giving patients more immediate access to comprehensive benefits, which
``trickled down'' to the hospitals through higher reimbursements.
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\33\ 2008 Median Ratios for Nonprofit Hospitals and Health Care
Systems, Fitch Ratings, September 25, 2008.
\34\ See, e.g., Ron Shinkman, Five Much Better Ways to Collect
Patient Debt, FierceHealthFinance, May 8, 2012; Acts of Charity:
Charity Care Strategies for Hospitals in a Changing Landscape,
PricewaterhouseCoopers' Health Research Institute, 2005; Catholic
Hospital Association, A Guide for Planning and Reporting Community
Benefit, 2006.
\35\ Stan Dorn, et al., The Secrets of Massachusetts' Success: Why
97 Percent of State Residents Have Health Coverage, State Health Access
Reform Evaluation, The Urban Institute and Robert Wood Johnson
Foundation, November 2009.
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But government oversight of hospital practices has often been weak
or inconsistent--State laws and regulations, like hospital practice,
also vary tremendously. For example, California, Maine and Rhode Island
have set minimum eligibility standards for hospital financial
assistance tied to family income. In Pennsylvania, State regulators
have limited what information hospitals can require of patients to
determine eligibility for financial help as a condition of receiving
certain public subsidies. In Minnesota, prior to pursuing legal action
or garnishing a patient, hospitals must verify the debt, confirm that
all appropriate insurance companies were billed, offer the patient a
payment plan, and offer the patient any cost reduction available under
the hospital's charity care policy.\36\ In California, hospitals and
their affiliates are barred from garnishing a ``financially qualified''
patient's wages or placing a lien on his or her primary residence in
order to collect a debt.\37\
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\36\ Pursuant to a binding agreement between the Minnesota attorney
general and the Minnesota Hospital Association.
\37\ Calif. Health & Safety Code 127425(f).
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Still, most States lack adequate protections for individuals who
cannot afford to pay for their care. Some, such as North Carolina, have
no laws on the books that expressly regulate medical debt collection.
There, a major public hospital system was found to routinely use liens
to collect debts on very low-income patients' homes. But even when
State laws are strong, oversight and enforcement of these protections
can be ad hoc or non-existent. As a result, compliance with existing
laws can decay. For patients, this means that the protections available
to them vary greatly depending on where they live and the individual
policies of the hospitals in their area.
recommendations for preventing and addressing medical debt
We have discussed the ways in which medical debt is unique, its
impact on families, and the factors that have contributed to its
proliferation. Accordingly, special rules need to be in place to
protect patients. We suggest a three-pronged Federal solution, as
follows.
(1) Prevent medical debt by implementing the coverage expansions
found in the Affordable Care Act
The growing problem of medical debt lends an additional perspective
to how America's health care system fails many uninsured and
underinsured people precisely when they need to rely on it most. But an
exclusive reliance on the hospital safety net is neither financially
sustainable over time; nor is it a suitable replacement for
comprehensive health benefits in terms of guaranteeing access to care.
Expanding access to care therefore requires making affordable,
comprehensive coverage a reality for the millions of Americans who are
currently un- or underinsured, and implementing the coverage provisions
found in the Affordable Care Act is the best strategy for making
affordable coverage a reality.
(2) Implement rules that clarify hospitals' obligations to observe
fair billing and collections practices
Even with full implementation of the Affordable Care Act, some
Americans will remain uninsured or underinsured, or suffer a medical
catastrophe that could otherwise destroy their financial security. The
second remedy for addressing medical debt is to put adequate
protections in place by regulating and monitoring hospital billing and
collections practices.
Section 9007 of the Affordable Care Act includes new requirements
for tax-exempt hospitals that would curb some of the worst practices
noted above.\38\ First, Section 9007 requires tax-exempt hospitals to
have a written financial assistance policy that includes eligibility
and application requirements and outlines the steps the hospital will
take to notify the public that financial help may be available. Second,
it requires these hospitals to make a ``reasonable effort'' to qualify
patients for financial assistance prior to engaging in ``extraordinary
collection actions.'' Third, patients who qualify for financial
assistance may only be charged the amounts generally billed to an
insured patient, ending the industry's standard practice of price-
gouging the uninsured and underinsured. Fourth, it requires hospitals
to undertake a regular community health needs assessment and develop
strategies to address some of the unmet needs.
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\38\ Section 9007 of the Patient Protection and Affordable Care
Act, Public Law 111-148 (2010), as amended by the Health Care and
Education Reconciliation Act of 2010, Public Law 111-152 (2010). For a
fuller discussion of Section 9007, see Corey S. Davis, Jessica Curtis,
& Anna Dunbar-Hester, Leveraging the Patient Protection and Affordable
Care Act's Nonprofit Hospital Requirements to Expand Access and Improve
Health in Low-Income Communities, Clearinghouse Review, January-
February 2012; and Protecting Consumers, Encouraging Community
Dialogue: Reform's New Requirements for Non-Profit Hospitals, Community
Catalyst.
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These requirements are already in effect for tax-exempt hospitals.
As recent media stories have demonstrated, however, they have not yet
had an impact on the behaviors of some of these hospitals. Part of this
may be due to the fact that we have yet to see implementing regulations
from the Department of the Treasury that will further define what
behaviors are acceptable under the statute. We believe strong
regulations are necessary to fully protect consumers from medical debt,
as Congress intended, and we strongly urge members of this committee to
weigh in with the Department accordingly.
While we believe that strong regulations and oversight pursuant to
Section 9007 of the Affordable Care Act are the best way to improve
hospital behavior, we recognize Section 9007's limitations. It applies
only to tax-exempt hospitals (though for-profits often adopt industry
norms) and works primarily by addressing the ``upstream'' behaviors of
providers that contribute to medical debt. Because the statute leaves
the scope and breadth of their financial assistance policies up to
hospitals' discretion, uninsured and underinsured patients may still
find themselves excluded from many of the protections offered by
Section 9007. What can be done to protect people from the downstream
behaviors that providers and collection agents are using?
(3) Expand consumer protections against aggressive collection
practices by initial creditors, such as hospitals, and debt collectors
The third remedy for alleviating medical debt is to expand consumer
protections available to patients. We recommend that this committee
investigate opportunities to expand Federal debt collection laws that
would increase transparency by placing debt collectors on the hook for
providing people with the information they need to understand their
rights and take appropriate action. Patients who qualify for financial
assistance or are eligible for public programs such as Medicaid should
be exempted from debt collection activity. In general, hospital debts
should not be referred to collections or reported to credit bureaus
until the patient is screened for financial assistance or public
programs. In no case should a hospital engage in or authorize
collection lawsuits, garnishing wages, freezing bank accounts, body
attachments or capiases, or placing liens on patients' homes or cars
without the express approval of its governing board. Practices such as
selling patient debts to third parties or charging interest on
outstanding patient debts should be prohibited outright. Medical
collections actions--again, because of the unique circumstances under
which the debts arise--are not predictive of creditworthiness, yet they
appear on credit reports even after a medical debt has been settled.
Each of these practices creates tremendous hardship for families, with
long-lasting effects that spill over into the financial well-being of
whole communities.
Finally, policymakers should continue to support transparency
initiatives, such as the Internal Revenue Service Form 990, Schedule H,
that require hospitals to report the practices they use or authorize
agents to take in order to collect patient debt. By giving communities
access to detailed information about local hospitals' practices, these
initiatives offer an important check on hospital practices that
contribute to medical debt.\39\
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\39\ However, the Internal Revenue Service has buckled under
pressure from some within the hospital sector and made these reporting
requirements optional in the past. See Letter to the Honorable Timothy
Geithner, Secretary, U.S. Department of the Treasury, re: Internal
Revenue Service Announcement 2011-37 (``Portion of Form 990 Schedule H
Optional for Tax-Exempt Hospitals for Tax Year 2010''), Community
Catalyst, June 20, 2011.
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conclusion
In conclusion, medical debt has an increasingly profound effect on
families, even those with private insurance coverage and middle-class
incomes. But behind the data lies the human element involved in every
case of medical debt: in hospital rooms and medical offices around the
Nation, families facing the specter of medical debt are forced to
choose between placing their loved ones' lives or the family's
financial future at risk.
We have been here before. Concerns about aggressive collections
tactics that impact patient access to care surfaced as recently as the
early 2000s. At that time, the response from the hospital industry was
to publish and update voluntary standards. While such standards are
welcomed, they are clearly not enough to staunch the wide range of
behaviors and tactics currently being used to collect debts that many
Americans simply cannot pay.
One thing is clear: hospitals that make a practice of healing
patients' bodies while bankrupting them--or authorize third parties to
do the same on their behalf--have missed the mark. They run the risk of
compromising individual and public health; eroding individual,
community, and national economic security; and destabilizing their own
financial well-being by ignoring industry best practices. Those are
risks that we can ill-afford to take.
On behalf of the 79 million people who are uninsured or
underinsured in America today, I thank you for the opportunity to
testify and welcome your questions.
Senator Franken. Thank you, Ms. Curtis.
Ms. Ross, thank you so much for your testimony. As an
emergency room nurse with decades of experience, what do you
believe is the most important role of a nurse?
Ms. Ross. Our main role is, always has been, to advocate
for the patients, and that's what I find so disturbing. Aside
from the fact that it interferes with the patient's care, the
nurse is the person that's coordinating your care when you're a
patient, and I have had dietary people, if a curtain is pulled,
ask is it OK to go in a room now and talk to that patient.
That's not even in the emergency room. That's up on the unit.
I have had people from medical records or the triage area
in the emergency room, let's say someone had to be rushed back
because they were having trouble breathing or having chest
pain, even those people need that information. It might just be
a phone number, an address, et cetera, but they know enough to
ask me or the doctor is this an OK time now, is that patient
stable enough.
To have a stranger come in without my knowledge as
coordinating that patient's care, or the doctor's, is not just
an interference; it's unethical.
Senator Franken. Nurses are often the providers who spend
the most time with the patients in the hospital. In national
polls, nursing often is rated as one of the most trusted
professions.
As their nurse, would you allow patients to be badgered for
payment?
Ms. Ross. I would not. I think it's unconscionable. This is
not the time or the place, and--well, as I said earlier, I can
appreciate that they have to collect moneys in order to do what
they do, but this is not the time or place. And over all the
years that I worked at a Fairview facility, this was not done.
Senator Franken. When you say it's not the place, you're
saying the emergency room.
Ms. Ross. No, I'm not just saying the emergency room. I
think any point of care when you're hospitalized, you do not
need that extra burden, that stressor. It shoots your cortisol
level way up. We don't need that. That's not part of healing.
Senator Franken. Ms. Ross, the attorney general's report
says that maintaining the privacy of patients' health
information is critical, because otherwise patients would not
have candid conversations with health care providers.
Did you find that to be the case in your years as a nurse?
What could go wrong if you don't have all the information?
Ms. Ross. If I don't have all the information?
Well, obviously, a person, a patient is a complex human
being. You need all that information. I am a little disturbed,
and I noticed this too when I started reading the consent for
treatment forms, because I read them for my parents, who are
elderly now too, and I did notice that over the years the
Fairview consent for treatment form had changed.
When I was last in with my father, I asked who this third
party might be that needed this excess information. I am used
to, obviously, you give it to other people, other physicians
who handle your care, and to insurance companies who would have
to process your bill. I asked, who is this third party, and I
was told those poor people at the desk, they don't know. What
the lady said to me was, quite frankly, ma'am, nobody has ever
asked that question, and if you don't want to sign OK to this,
you just put your initials there and say no, so we did say no.
But it came obviously after I started reading about what's
going on here. I believe that's the third party they're talking
about, and I do not understand why that pertinent medical
information needs to be given to a third entity.
Senator Franken. And if people don't trust that their
information is going to be secure, they'll be less likely to
give out personal information----
Ms. Ross. Exactly.
Senator Franken [continuing]. That you as a nurse and the
doctors may need to know what medications that person is on,
what conditions they have----
Ms. Ross. Exactly.
Senator Franken [continuing]. So that you don't prescribe,
the doctor doesn't prescribe medicine that will interact badly
with others.
Ms. Ross. Exactly.
Senator Franken. Ms. Curtis, in your written testimony, you
explain that medical debt is different from other types of
debt, that people don't typically choose to rack up medical
debt, and they definitely don't choose to get sick.
Can you talk more about the special nature of medical debt
and how devastating it can be for a family to deal with debt
collectors while they're trying to heal?
Ms. Curtis. Sure, and I can say probably the best way to
talk about this is to talk about some of the patients that
we've come across in our work across the country.
Just to bring it to light, I think really what's happening
is that patients are being forced to choose between their
family's financial future and their health, and that's a choice
that I don't think people should have to make, but frequently
they do.
One of the patients that we have worked with, for example,
in Florida, she's the woman who went into the emergency room
for care. She was asked to take care of her bill at the moment.
When she said she wasn't able to, she was asked if she had a
credit card. So because she wanted to seek care, she put the
bill on her credit card. The charge was $4,000, and it took
care of her immediate problem. She was able to see the doctor,
she was able to get treatment.
But as a result of having that bill on the credit card, she
ended up falling behind on her mortgage and is now in a very
different situation where her financial health is in danger as
well.
Another story that I know has made the news recently in New
York was a woman, a graphic designer who for most of her life
had been insured and employed but was hit hard by the
recession. She went into one of New York's premiere non-profit
hospitals and was asked immediately to pay up-front for care.
She had, I think, a benign tumor on her liver.
She did that. She raided her savings account and paid
$17,000 right away. What ended up happening to her, however,
was, of course, that didn't take care of the entire charge. And
so she was landed with an $88,000 bill. She tried to work out a
payment plan, was unable to do so, and ended up in court with
the hospital. There, a judge recommended that the hospital
accept her offer to make a $100 per month payment plan, and she
has said she'll be paying that bill for the rest of her life.
In these situations, when people hear these stories,
they're carrying that information and that knowledge with them
the next time that they or their family requires additional
help.
Senator Franken. How do you think our Federal debt
collection laws should reflect the special circumstances around
medical debt?
Ms. Curtis. Well, one of the things that my organization
has been working on is to really back up from the point where a
debt becomes bad debt and we're in the position where people
are collecting. Hospitals, to my knowledge, are mostly exempted
from the Federal Debt Collection Protection Act. They are a
creditor, and they're allowed to do a lot in order to collect
on their own debt. And again, we recognize that hospitals need
to receive payment for services rendered, but we have become
increasingly aware of and troubled by the same kinds of
practices that we've heard alleged here in the Fairview and
Accretive Health cases happening in hospitals across the
country.
What's troubling is that the protection that's now in the
Affordable Care Act and applies to non-profit hospitals just
applies to those hospitals. It's still very much predicated on
what the hospital's own financial assistance policy is, and all
of the protections in it which would require hospitals to limit
what they charge patients for care, and the steps that they
take to screen a patient before they engage in extraordinary
collection actions, again all of those depend on their own
financial assistance policy, and that's up to their discretion.
So what we have is a situation where some hospitals have
higher burdens placed on them, new higher burdens placed on
them to be thoughtful about how they collect on bills, but not
all hospitals in the United States have that. And then again,
those protections differ as you move down the line and the
account proceeds forward and becomes past due.
Senator Franken. Thank you.
Professor Goodwin and Ms. Curtis, as you both know and as
we've heard in our testimony today, tax-exempt or charity
hospitals in Minnesota don't pay Federal or State income taxes,
property taxes or sales taxes, and they can sell tax-exempt
bonds. These benefits are worth billions of dollars nationally.
In return, tax-
exempt hospitals are required to provide a benefit to the
community.
Could that create a conflict of interest and potentially
undermine the mission of a charitable hospital when it
contracts out its revenue cycle management services to a for-
profit and publicly traded firm? It seems to me that non-profit
hospitals have to carefully manage their for-profit
contractors, particularly in the area of debt collection, to
make sure the public's interests are being served. Would you
agree?
Ms. Curtis. Sure, I would definitely agree. I think this is
one of the reasons why the Internal Revenue Service has begun
to ask non-profit hospitals to report what collection actions
they or an authorized agent have undertaken, and it's very
specific questions. Those questions were added for tax year
2010, but they were made optional for that tax year. This is
the first year, tax year 2011, that hospitals will have to
report that information, and I think it's just for the reason
that you're saying, there is an inherent conflict of interest
here.
Senator Franken. Professor.
Ms. Goodwin. I absolutely agree with you. Historically, the
reason why, in fact, we allowed hospitals and other
organizations to have a charitable status is because we had
sick people, and we know when there are sick people who are
untreated, just as you mentioned earlier, it can become a
public health nightmare. So we want people who cannot afford
treatment to be able to get treatment, and in exchange for that
we allow for tax exemption status for hospitals. But there is a
conflict of interest that does arise clearly when hospitals
perform in more illusory than real ways with regard to
providing charitable care.
Senator Franken. It just seems to me that there is a
responsibility that the charity hospital has and that it can't
allow its relationship with a for-profit entity to compromise
that mission.
Ms. Goodwin. I think that's absolutely right, and I think
this has become a very complicated issue not only in the State
of Minnesota but throughout the country, as well. There are
also some very significant information asymmetries that take
place so that individuals who need care and they seek emergency
treatment believe and, in fact, Federal law provides for them
to be able to get that care. Poor people who believe that
they're being treated at a charitable hospital believe that
they will be treated charitably. It's unfortunate when they
arrive at our hospitals that we are providing tax exemption
status for and Minnesota taxpayers are paying for when they're
not getting that kind of quality of care.
I think we're all sensitive to the fact that this is a real
challenge, how hospitals will recoup debt. That we all know
about. But it's the manner and place in which this all happens
that I think makes this hearing incredibly important.
Senator Franken. I think that's the case. Hospitals are in
a crunch and they have to be able to collect debt, and I think
everyone agrees with that. What's important is how you do it,
and when and where.
Professor Goodwin, as you know, the Fair Debt Collection
Practices Act is intended to protect consumers from
unscrupulous debt collectors. However, the law doesn't cover
all collection activities. Accretive has argued that the Fair
Debt Collection Practices Act did not cover their revenue cycle
employees working at Fairview. Do you agree with that
assessment?
Ms. Goodwin. I disagree with that assessment. I think if
you look at the law, the intent behind the law, and as I
pointed out specific sections of the law, Accretive would
certainly have been covered by this and that their behavior
certainly stands, in my opinion, as a violation of the law.
I've read through all the volumes that have been presented,
written by the Minnesota Attorney General, and there are
specific violations that are pointed out both in terms of
communication, how they communicated, when they communicated,
deceptive practices in terms of what they did not disclose to
the individuals who were seeking treatment at the hospitals to
inform them that they actually were debt collection agents,
that they served a dual purpose and role.
There were violations by the manner in which they sought
payment from patients at bedside and in ways that even my law
students, non-law students, if I were talking to high school
students and I showed them the statute and said here's the
conduct that's been alleged, has there been a violation, a high
school student would say yes.
Senator Franken. It sounds like you're saying that the law
is clear enough to hold bad actors accountable?
Ms. Goodwin. Certainly that's true, but I also would say
that there are ways in which the laws can be strengthened. I
think that on the face of the law itself, as I've read some
today and you have the other in my written testimony, there
were clear violations of what the attorney general's office has
amassed, and if their investigation holds to be true, clear
violations of the law.
That said, what concerns me is that for consumers, there
really isn't the opportunity to be incentivized to even
complain about this. At best, a consumer who wants to file
under the FDCPA may, at most, recover $1,000. That's
negligible. There's no significant disincentive for a company
that's going to bring in tens of millions, if not hundreds of
millions in revenue per year, to do anything otherwise if, at
best, they're going to pay off $1,000 to a consumer who
complains.
Senator Franken. In addition to the FDCPA, let's talk about
privacy laws. Based on the evidence we've heard today, do you
believe our Federal health policy, privacy policy, that those
laws should be strengthened to protect patients' privacy? And
if so, how?
Ms. Goodwin. One of the issues that arose today involves
the snatch and grab of the laptops, one in Seven Corners, and I
suppose that there have been a number of others, I think up to
nine that have been snatched and grabbed. And in these laptops,
the data that--first of all, there's been too much data that's
been provided. But in addition, there's data that has not been
encrypted.
I think that we can do more to strengthen HIPAA to provide
for the advancements in technology that perhaps were not
predicted at the time of HIPAA's passing.
Senator Franken. Thank you.
This question is for all the witnesses, so anyone, chime
in.
One of the key things we've been struggling with all day is
that hospitals need a way to collect from patients that is fair
and reasonable and that doesn't interfere with patients getting
the care that they need. Where do we strike that balance? Is
there a responsible way for hospitals to collect on their debts
without compromising the quality care of patients, and are
there additional changes to Federal law that you would
recommend to achieve that balance?
Ms. Curtis. I'll start. I think that those are exactly the
right tensions to point out. But the truth is that there are
ways that hospitals can collect on these debts without going
bankrupt. Hospitals do this all the time.
Part of the issue that does come up is really timing and
place. What struck me from the testimony today was that it did
not seem in the questions the patients were being asked about
ability to pay or whether they would like to pay, I didn't hear
at that moment a question about are you concerned that you will
not have an ability to pay. The hospitals that we've worked
with that have done this really well will ask those questions
up front, if a patient is uninsured, if they're under-insured,
if they express some difficulty about paying.
In some places, if they are eligible for other kinds of
programs, food stamps, Medicaid, Medicare, there can be some
form of presumptive eligibility put in place for financial help
under the hospital's policy.
That's a starting place, to think about in the hospital how
are they communicating, what are the policies, what do they say
about time and place, how are those being communicated to staff
and reinforced to staff within the hospital through regular
trainings. There are ways that that can happen.
Then again, moving down the line, I do think that there are
debt collection activities, because of the way that medical
debt is unique, that should not be allowed for patients who are
below certain income thresholds, for example, who have
qualified for charity care, who have set up a payment plan and
they're at the max already. There are debt collection practices
that I think should be outlawed as well, if you're looking at
garnishing patients' wages or putting a lien on their primary
residence.
Those are things that have very significant consequences,
and right now the burden is really on patients to advocate for
themselves in these situations. I think the burden needs to
shift to be more on hospitals. If they're going to engage in
some of these activities, they need to ratchet up the internal
controls that they're using before they move forward.
Ms. Goodwin. I would agree with that.
Two things that I'd like to point out. The first is that we
not lose sight of the Nuremberg Code or the Tuskegee
experiments. These sort of anchoring moments in history that
teach us about the ethical conduct that is expected of the
medical community, whether we're talking about researchers,
doctors, nurses, or hospitals. There are four principles that
we learn and that are guided from those moments in history that
we all continue to be shocked by.
They are beneficence, and that is about first do no harm,
that hospitals are about giving care. The second is about
patient autonomy and that being a priority. Social justice is
also important, and informed consent. I think one of the things
that one hears through this investigation is how so many of
those basic practices, what we expect dating back to Nuremberg,
were just simply not taken seriously at all by Fairview in
their relationship with Accretive Health Care.
In terms of thinking about the ways in which the law can
move forward, one of the things that we haven't talked about is
the use of criminal law, and I would commend you to consider
the work of Professor Song Richardson. She's a person who has
collaborated with me about the ways in which we need to take a
much more serious look at the ways in which health laws are
violated, and research codes are violated, and the criminal law
provides a very strong stick to check against behavior such as
this, and I think we need to move in that direction.
Two more things that I would suggest, and that is we really
do need better information sharing with patients because there
are information asymmetries, and what patients need to know
about are the ways in which hospitals go about collecting their
money and why it's important that hospitals are in the shape
that they are when they're looking to recoup losses. That's not
really information that is shared with patients. They're
expected to sign on the dotted line, but in terms of good
quality information, it's simply not there.
One other point would be to take a very serious look at
hospitals and their charitable status. We need to consider
joint and severable liability here, which is not a new concept
in the law, but it is to say that when hospitals understand
that they're working with parties that do badly, they too can
get in trouble, not just the companies that they're working
with.
Senator Franken. Thank you.
Ms. Ross.
Ms. Ross. I would have to say, echoing what Michele Goodwin
just said here, I was struck when Mr. Mooty and Mr. Kazarian
were speaking, especially Mr. Kazarian, about the types of
things he said his company is supposed to do. And what struck
me is you have this supposedly beneficent community facility.
Hospitals are there for the community, they're supposed to be.
And you have professionals who know their duty is first do no
harm. You have social workers. You have people who could
perform all of those duties that he was talking about in his
for-profit business.
So people who clearly understand HIPAA and know what they
can and cannot share, who clearly would safeguard that
information because they are health care professionals,
caregivers in that institution, the hospital in which they work
clearly understands that, why on earth would you farm that out
to another company? That does not make sense to me.
What he talked about in the form of helping patients I was
really glad to hear, because patients do not have a clue. They
are farmed out to talk to their insurance people. It depends on
who you get that day, whether you get a real person on the
phone. They can talk to the hospital personnel. The hospital
usually says go talk to your insurance person.
If they had some sort of coordinator within that hospital
facility that could do that, that would be more ideal, I would
think, than farming it out to someone else.
Senator Franken. I truly believe that Accretive did that
service, too, and that they did, as Mr. Kazarian said, that
they helped patients find insurance. But again, we're talking
about balance, and we're talking about the right way and the
right time.
Ms. Ross. And it's yet again another party to give that
protected information to when it doesn't need to be.
Senator Franken. Exactly.
Well, thank you all for all your testimony today. You're
now excused.
Ms. Goodwin. Thank you very much.
Ms. Ross. Thank you.
Senator Franken. I want to thank all the witnesses today.
In closing, I also want to thank the Chairman and Ranking
Members of the Senate HELP Committee, Senators Harkin and Enzi,
for allowing this hearing to take place.
I'd like to also take this opportunity to once again thank
each of the witnesses who testified here today.
We have a health care system that is among the most
expensive per patient in the world. I visited many hospitals
across Minnesota, and as far as I'm concerned, we deliver some
of the best health care, if not the best health care, in this
country. That is in no small part because of extraordinary
hospitals like Fairview and Mayo and others.
Many hospitals are operating on smaller and smaller
margins, and they need help to survive financially so they can
serve their communities. A company like Accretive offers itself
as a solution, a way for hospitals to get revenues that are
owed to them. I get it.
But it really seems like something went wrong here.
Accretive cites in its response letter to me some very positive
e-mails and comment cards and letters from Fairview patients
expressing their gratitude for the help that they received in
finding insurance and other ways to pay for their care, and I
will read the first two.
``She was incredibly helpful,'' ``INCREDIBLY HELPFUL'' in
all caps, ``and provided me peace of mind,'' ``PEACE OF MIND''
in all caps.
Next one.
``You were very efficient. You were compassionate and
asked me questions without just turning me away. You
explained the hospital policy but immediately looked
into my situation.''
I think that's just great, and Ms. Ross I think spoke right
at the end about the folks that do that.
Here's the thing about that. I think that should be the
norm. This is Minnesota. People in Minnesota are good at their
jobs, and we are nothing if not nice.
[Laughter.]
Senator Franken. I would expect Minnesota health care
employees to do a great job in very difficult circumstances,
and these are very difficult circumstances. When people come to
a hospital, it's usually a very stressful situation, even in
the most blessed occasions, the birth of a baby. Even that can
be very stressful. And very often, hospital visits are made in
more trying circumstances. You go to a hospital when you're
sick or when you've been hurt and when you're at your most
vulnerable.
And the revenue cycle folks that were doing these jobs for
Fairview had to exercise a lot of judgment. These jobs require
not just sensitivity but also the ability to make distinctions,
distinctions about when and how and where it is proper to ask a
patient for money.
It seems to me that there is a right way and a wrong way,
and a right time and a wrong time to do these things. And to
help your employees get it right means creating the right
culture. We are all human beings, and human beings are not
perfect. But leadership in the industry isn't just about
providing the right software and the right processes. It's
about providing thoughtful guidance. It's about creating a
culture where people err on the side of compassion.
Minnesotans should be able to receive the health care they
need when they need it, and when you or someone you love is
sick or hurt, you shouldn't have to spend time worrying about
some of the details we've been talking about here today, such
as whether you or your loved one is being badgered for pre-
payment when they're writhing in pain, or whether that
sensitive information you're giving to your doctor or nurse
might not stay private.
So I'm going to continue to look into these issues. This
hearing is just a beginning, not the end of my investigation.
I'm going to think about everything I've heard here today. I'm
going to look into whether we can do more to strengthen our
laws, our Federal laws to protect patients.
I'd also like to submit four statements for the record.
These are from the Minnesota Hospital Association, the
Teamsters, the Minnesota Nurses Association, and the PCD
Foundation.
[The information referred to can be found in additional
material.]
Senator Franken. We will hold the record open for 1 week
for submission of questions for the witnesses and other
materials.
This hearing is adjourned.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Nina Bugbee, RN, President, Teamsters Local
Union 332, Flint, MI
Thank you for the opportunity to provide testimony to the U.S.
Senate HELP Committee Field Hearing, ``Ensuring Patients' Access to
Care and Privacy: Are Federal Laws Protecting Patients?'' I am
President of Teamsters Local Union 332 in Flint, MI. We represent RNs,
LPNs and technical workers at Ascension's Genesys Regional Medical
Center in Grand Blanc, MI. I practiced as an RN for 14 years before
going to work at my local union. I am also a member of the Michigan
State Board of Nursing.
Genesys is owned by Ascension Health, the largest non-profit
hospital chain in the United States, and the 2nd-largest health system
in the country. Ascension Health, based in St. Louis, is also the
largest customer of Accretive Health (providing 41 percent of its
revenues) and is Accretive's 6th-largest shareholder.
Our members who work at Ascension Genesys have reported many
troubling practices since the hospital contracted with Accretive in
2004. Our members report that collection practices have become much
more aggressive, and that they are told ``not to leave money on the
table.''
We have not just collected anecdotal stories here and there. We
conducted a survey of our members who work at Ascension Genesys, and
the survey results are quite concerning.
The surveys tell us that the Ascension Genesys Emergency Department
(ER) was re-configured to put a major focus on getting bills paid.
Administrative Assistants had their titles changed to ``Financial
Administrative Assistant'' (FAA). More and more pressure is applied by
management to collect co-pays and prior balances. Eighty-five percent
of ER staff who responded to our survey reported that patients are made
to think at registration that they must pay before receiving care, and
that they must pay any past due bills before receiving care. According
to our surveys, at registration patients are asked to take care of any
balance by ``cash, check or credit card'' before they're seen by a
doctor. If a patient does not have insurance or has past balances, a
bill collector, or ``financial counselor'' (FC), is called in.
The surveys also tell us that ER patients with insurance have to
turn over their insurance card and driver's license at registration,
and they do not get them back until they go to the discharge desk when
they leave and pay their co-pay. This policy ``created a lot of tension
between registration staff and the department supervisor. Many
employees felt uncomfortable,'' reported one survey respondent.
From one survey, we received an example of how Ascension Genesys
treated one of its own. Kelly Rivera-Craine, an RN at Genesys, brought
her husband to the ER in July 2009 for kidney pain and nausea. Because
all of the rooms were occupied, her husband was put on a stretcher in
the hallway, in front of the nurse's station. While waiting to be seen
by a doctor or nurse, a financial counselor approached her about a
previous bill owed by her husband for $23,228.19. She asked Kelly's
husband how he would like to settle it, even though he could not speak
at the time because he was vomiting and in an extreme amount of pain.
Only after Kelly asked the woman if there was somewhere private they
could talk, was she brought into an office. If it were not for Kelly's
suggestion, the counselor would have continued to discuss the
outstanding bill with Kelly's ill husband in the middle of the public
hallway. This information could have been heard by other patients and
employees. I am appalled, as were Kelly and her husband, that the
hospital would send a ``financial counselor'' (bill collector) to
patients when they are in their most vulnerable state, as well as doing
so in an inappropriate setting.
Another example of hunting down patients while they are acutely ill
comes from another survey. A Genesys RN was in the hospital herself
with trouble breathing, and a FC entered her room to ask her to pay a
past due balance of $25. This occurred when doctors and nurses were in
her room, so the bill collector could easily have overheard
confidential medical information.
Many surveys we received report that bill collectors enter patient
rooms where they would be able to overhear medical information. Eighty-
five percent of ER staff who responded to our survey reported that bill
collectors attempt to discuss payment in inappropriate places. The
financial advisors ``always see [patients] in patients' rooms or the
hallway,'' one respondent noted.
Other surveys tell us that patients being seen in the ER for trauma
are asked for payment while being treated. One survey reported an
example from 2 weeks ago of a suicidal patient who was tracked down in
the ER by a bill collector while being treated.
One Genesys employee stated in her survey,
``I have been personally told by patients and their families,
and have witnessed on several occasions, a patient's upset at
being approached about money owed at a time when they feel the
most vulnerable. I have walked into a patient's room after the
FC had left, and the patient would be in tears, after a
discussion of their prior balances. When a patient is ill or in
pain, it is not the best time, or the best place, to prey on
their vulnerable state to collect money. Judging by the
complaints I have heard from Genesys patients and their
families, they do not see Genesys employees as being
compassionate. Since working at Genesys, I have heard comments
made by long-time employees about how Genesys has changed in
recent years.''
A former FAA reported on her survey,
``I was an FAA at Genesys for 7 years. It was part of my job
to communicate with Accretive regarding self-pays and prior
balances on past due accounts. Accretive is able to go into ADT
[the hospital's billing/patient management software] and access
all past and present visits to verify any prior balances. They
are also able to view emergency contact information, previous
insurance, chief complaints, previous admissions, and any
payments made by the patient in the past. Often Accretive would
enter the patient's room before the patient is treated by a
physician. During very high patient load, some patients may
have to be placed in a hallway. Accretive will approach our
patients anyways.''
Another Genesys employee told us in her survey,
``I have seen notes in ADT that are pretty graphic, about
patients' jobs and money they earn, or information that was
given to the patient about how to get money for their injury--
such as one patient who was injured at someone's home. They
instructed the patient to go after the homeowner's insurance,
to help pay the hospital bill.''
Another survey responder told us of her sister being aggressively
pushed for payment at Ascension Genesys at the time her husband was
being seen in the ER. She didn't have the money to pay the bill right
then and there, and she was made to feel ``she couldn't leave without
paying--this was a very embarrassing situation for them.''
The surveys also tell us that Accretive staff do not clearly
identify themselves. ``They all wear Genesys badges,'' one Genesys
employee reported on her survey. The ``badges don't identify them as
Accretive.'' Another employee reported on her survey,
``Accretive employees dress in business casual clothing and
wear a name badge with a Genesys logo, confusing patients into
thinking they're employed with the hospital. They enter the
room and say they are with ``Financial Services.''
The surveys also report that Accretive supervises Genesys'
financial administrative assistants, as well as their supervisors.
The surveys told us as well that scripts are provided for staff to
use in collecting payments. Attached is one example of a set of scripts
distributed to FAAs. There are 10 different scenarios given, with
answers to possible patient responses. Each is designed to get as much
money out of patients as possible, as quickly as possible.
Some other examples of aggressive collection tactics include
outpatient surgery, where patients are called at home before the
procedure and asked to bring payment with them. Patients with past-due
balances have been told that they cannot undergo additional procedures.
From another survey, a Genesys RN told us that she hadn't paid an ER
bill because it had never been sent to her. When she went to have an
MRI at Genesys on a later date, she was told she couldn't have it done
until she paid her bill. They ``gave me a very hard time,'' she
reported. Another hospital employee gave a similar report--even though
she had insurance, she was told she couldn't have her MRI unless she
paid $500 up front.
I understand that you are investigating Accretive Health's
practices in hospitals, but I urge you to also investigate the roles of
these huge Fortune 500-sized non-profit hospital chains as well. It is
the choice of hospital systems like Ascension Health to contract with
Accretive. The hospital is the paying client, and Accretive is
certainly acting on its customers' agenda. A $15 billion company like
Ascension is obviously calling the shots with its contractors. And in
Ascension's case, using Accretive helps them bring in revenues twofold:
First, Ascension directly benefits from Accretive's strong-arm
tactics to push patients to pay bills while in the hospital. Ascension
is Accretive's biggest customer, comprising 41 percent of its revenue
stream. And second, Ascension benefits from Accretive's own profits, as
Ascension is Accretive's 6th-largest shareholder. With these kinds of
incentives, it's no wonder that we have been hearing all these horror
stories about Accretive. But I would certainly hope that we are not
going to overlook the role and responsibility of the hospitals,
especially those, like Ascension, that are allowed to use a non-profit
tax status. It's another sneaky way for a non-profit to claim profits
in the health care industry.
There is another particularly disturbing aspect to this situation,
aside from the unethical treatment of patients. Based on our survey of
Genesys employees, medical coders have been asked to change coding
practices. Another new practice that occurred when Ascension Genesys
brought in Accretive is that Accretive staff started to directly
supervise the work of the medical coders. This is not allowed under our
collective bargaining agreement, so we pushed back and the practice was
discontinued. However, the coders tell us that their supervisors are
now being supervised by Accretive staff. So Accretive is essentially
running the coding department.
Some of our survey responders reported that they've been asked to
change how they code for Medicare billing purposes. One coding
department employee stated, ``I've certainly had ethical and moral
questions about the process.'' I believe this should be investigated
further, considering that in December 2009, Genesys agreed to pay
$669,413 plus interest and $97,500 in attorney fees in a settlement
with the U.S. Department of Justice over claims of Medicare
overcharging. In May 2010, Genesys agreed to another settlement with
the DOJ, for over $931,000, for allegedly submitting false claims to
Medicare.
Non-profit hospitals, in exchange for tax-exempt status, are
supposed to have missions that will benefit their communities, have
fair billing and collection practices, reinvest surplus funds in ways
that benefit their communities, and to remain accountable to their
communities. Instead, for decades, we have seen non-profit hospitals
across the country hoard money, defraud Medicare, overcharge and
intimidate patients without insurance, and violate the purposes of
their tax exemptions.
Ascension Health has a venture capital arm of its operations. It is
building hospitals in the Cayman Islands, likely for ``medical
tourism.'' It pays Accretive Health to shake down patients for money.
It has been fined multiple times for questionable Medicare billing
practices. And they're not the only non-profit hospital system that
does this.
The behavior of Accretive Health should be investigated, but the
responsibility for treating--and billing--patients ethically lies at
the feet of our Nation's hospitals and especially large hospital chains
such as Ascension Health.
I thank you for considering my testimony.
Attachment
health care registration forms, checklists, & guidelines*
Role-Playing Scenarios: Asking for the Money
------------------------------------------------------------------------
Scenario 1 How to ask for the money
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I can't pay today.
Registrar................................. When will you be able to
pay?
Patient................................... Next Friday.
Registrar................................. Is this your next payday?
Patient................................... Yes. I will be in after
3p.m.
Registrar................................. On next Friday, will you be
paying the balance in full?
Patient................................... I can only pay half then and
the balance in 2 weeks when
I get paid again.
Registrar................................. I will make a note on your
account to this effect and
will see you next Friday.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 2 will make payments''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I will make payments.
Registrar................................. The hospital doesn't carry
accounts and requests that
the account be paid today.
Patient................................... My husband has been off work
for 3 months, and I don't
know how we can pay it.
Registrar................................. Please call the financial
counselor to talk about
your situation.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 3 don't have my purse or
wallet''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I don't have my wallet/
purse.
Registrar................................. How were you going to pay if
you had your wallet/purse?
Patient................................... By check.
Registrar................................. Will you be sending a check
as soon as you get home?
Here is a self-addressed
envelope for your
convenience.
Patient................................... Yes. I can send one out
then.
Registrar................................. Will that be for the entire
balance?
Patient................................... Yes.
Registrar................................. Thank you for your
cooperation and have a nice
day!
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I'm
Scenario 4 disabled''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I am disabled.
Registrar................................. Where are you disabled from?
Patient................................... XYZ Company.
Registrar................................. JWhen do you receive
disability benefits?
Patient................................... Every 2 weeks.
Registrar................................. Are you able to pay today?
Patient................................... I can only pay $20.00 today
and the balance from my
next check.
Registrar................................. When will you get your next
check?
Patient................................... On the 17th of this month.
Registrar................................. I will make a note on the
account that you will be
paying the rest of the
amount on the 17th.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``This
Scenario 5 is Ridiculous''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... This is ridiculous!
Registrar................................. Why is that? This is a
business that needs money
to keep it going. When do
you plan on paying this
account?
Patient................................... I have no money today.
Registrar................................. When do you get paid?
Patient................................... Next week, on Friday.
Registrar................................. Will you be paying the
entire balance then?
Patient................................... I wish!
Registrar................................. Does that mean you'll make a
partial payment?
Patient................................... I have so many bills and
very little money to go
around.
Registrar................................. Please call the financial
counselor to talk about
your financial situation.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 6 was in an auto accident''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I was involved in an auto
accident.
Registrar................................. The hospi1al holds you
responsible for the bill.
When you receive the bill
from the hospital, forward
it to the responsible party
or his or her insurance
company as soon as
possible.
Patient................................... But it was not my fault.
Registrar................................. We will note the account to
that effect, so that this
situation will be known to
anyone else working the
account. But we still have
to hold you responsible
because the hospital is not
a party to the case. Just
send the bill to the party
who was at fault.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 7 have no money/no job''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I have no money and no job.
Registrar................................. Do you receive unemployment
benefits?
Patient................................... Yes I do-every two weeks.
Registrar................................. Please call the financial
counselor so that something
can be worked out regarding
your situation.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 8 have insurance but a high
deductible''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I have insurance, but it
never pays anything since I
have a $1,000 deductible.
Registrar................................. It would be to your
advantage for the hospital
to bill for this service to
your insurance company. It
will go against your high
deductible.
Patient................................... Here is my insurance card.
Registrar................................. Would you like to put the
balance on your credit
card?
Patient................................... (after a little hesitation)
OK. Here is my Discover
card.
Registrar................................. Thank you for your payment.
And remember to have your
insurance billed each time
you have medical services
done.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``I
Scenario 9 have $20 to put down''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... I have a $20 bill to put
down on it.
Registrar................................. Thank you and here is your
receipt. When will you be
paying the balance?
Patient................................... I get paid on the 20th and
should be able to pay the
balance then.
Registrar................................. I will note the account for
this arrangement. If by
chance you cannot pay the
balance on the 20th, please
call the office.
------------------------------------------------------------------------
------------------------------------------------------------------------
When the patient says ``Just
Scenario 10 charge it''
------------------------------------------------------------------------
Registrar................................. The charge is X dollars.
Wi11 that be cash, check,
or credit card?
Patient................................... Just charge it.
Registrar................................. What credit card do you want
to use?
Patient................................... Put it on my account!
Registrar................................. We have no revolving
accounts here. The hospital
requests that the account
be paid today.
Patient................................... (getting out checkbook) How
much is that again?
------------------------------------------------------------------------
Courtesy of Mary Rutan Hospital, Bellefontaine, OH.
Prepared Statement of Laurence J. Massa, President, Minnesota Hospital
Association, St. Paul, MN
Senator Franken, thank you for the opportunity to submit written
testimony to you. I am Lawrence Massa, president of the Minnesota
Hospital Association. We represent 145 Minnesota hospitals and 17
health systems in the State.
We are proud of the 113,000 health care professionals who provide
exceptional care to our patients 24 hours a day, 7 days a week. That
commitment to our patients continuously lands Minnesota in the top
rankings for patient safety and quality of care, according to Health
Grades, US News & World Report, Thompson Reuters, and the Commonwealth
Fund--among others.
The most important point I want to make today is that the standard
for Minnesota hospitals is patient care above all. The conversation
about billing should never get in the way of patient care.
How hospitals have that conversation about billing is very
important, and there are three important aspects to this conversation
that I would like to discuss:
1. Our regulatory requirements under EMTALA--the Federal Emergency
Medical Treatment and Active Labor Act;
2. Our transparency and responsiveness to patients on billing
questions; and
3. Our commitment to assist patients who are uninsured or
underinsured.
1. The Emergency Medical Treatment and Active Labor Act (EMTALA)
requires hospitals to conduct a medical screening examination and
determine whether an emergency medical condition exists before asking
for reimbursement in the Emergency Department. A patient with a life-
threatening illness, a person involved in a car crash or a person with
severe pain, for example, needs medical attention and care.
Minnesota hospitals routinely take care of patients without regard
for the cost of a procedure or concern about payment. Our obligation is
clear: we treat a person with a medical emergency.
2. Last year, Minnesota hospitals had 10 million outpatient visits.
Minnesota hospitals provided in-patient care to nearly 600,000 people.
It's important to draw a distinction between emergencies and admitting
a patient where there is not an emergency or when outpatient procedures
are scheduled in advance.
The fact is an increasing number of employers are asking employees
to shoulder a greater burden of their health care costs with high-
deductible insurance plans. As this occurs more and more often,
consumers are taking note of how much health care costs, and
communication between the hospital and patient helps people plan for
health care.
Hospitals are continuously surveying patients on their experience.
This is part of the goal of the Triple Aim we all strive for in health
care today--the improved health of the population, a great patient
experience and the affordability of care. Further, under the Affordable
Care Act, patient satisfaction is an increasingly important factor in
determining a portion of reimbursement from Medicare under its new
value-based purchasing program. This is something Minnesota hospitals
support.
I was the CEO of Rice Memorial Hospital in Willmar for 15 years. I
know from my own experience as well as my travels around the State with
our members over the past 3 years that patients increasingly want to
know up-front how much a procedure is going to cost. Patients sometimes
decide to defer or delay elective procedures because of that cost
estimate.
As a result, we are as transparent and responsive to our patients
as possible and provide this information when asked--and at the
appropriate times.
3. Uncompensated care costs are growing rapidly, and our hospitals
are increasingly assisting individuals without insurance. In 2010,
there were more than 1.6 million visits to our hospital's emergency
rooms. There are 128 24-hour emergency rooms in the State. All of
Minnesota's hospital emergency rooms treat anyone who enters,
regardless of their ability to pay.
In many cases, Minnesota hospitals provide care to patients who do
not have health insurance. As you know, the emergency room is sometimes
the only place for care for people without insurance. In 2010,
Minnesota hospitals provided $311 million in uncompensated care--
including charity care and bad debt. In addition, we provide care below
cost to patients covered by government programs such as Medicare and
Medicaid as a result of payments below the cost of care.
When patients do not have insurance, hospitals often assist
patients to see if they qualify for Medical Assistance or other public
programs. In addition, every hospital has financial assistance/charity
care programs for those patients that fall through the cracks of
eligibility for public programs. These evaluations need to occur at the
time the patient is seen so that adequate eligibility information may
be collected. Getting patients enrolled in these programs is critical
to ensuring followup care and care coordination.
In fact, our hospitals are going to great lengths to see to it that
patients who are eligible for programs get the assistance they need to
enroll. For example:
Allina Health's long-standing ``Med-Eligible'' program provides
services to any patient admitted from the ER who does not have
insurance. Twenty-six staff members serve Allina hospitals. These
specialists meet with patients, assuring them it is a free service to
see if they are eligible for any government or hospital programs. If a
patient is receiving treatment, the specialist will simply tell the
patient that they should take care of himself or herself, and that
they're here for them and will sit down with them at the appropriate
time. They find that many patients are panicking about how to pay for
tests.
The Med-Eligible program specialists offer assistance with
applications for Medical Assistance or a hospital financial assistance
program. They advocate for the patient. The Med-Eligible program helps
1,300 patients each month, and in the course of a year may have only 10
to 15 people who don't want the help.
These specialists also help patients with other, non-hospital
needs. They assist in getting patients to a clinic appointment and
making sure they have what they need to make the appointment. They also
assist with access to community services, including transportation and
food shelves.
Ultimately, the hospital gets paid as a result of enrolling a
patient in a government program, but that is not Allina's first
priority. I share this example with you because it is the right way to
engage a patient in a conversation about payment. And it is an example
of what hospitals are doing to reduce uncompensated care.
Finally, there are standards and policies in place on how hospitals
interact with a patient on billing and payment--both in Minnesota and
nationally.
Most Minnesota hospitals use internal staff for initial billing and
followup. However, some do contract with an outside law firm or a
vendor to collect unpaid bills. In 2005, an agreement with the attorney
general set in place a high level of care for how patients are to be
handled when a hospital is collecting on a debt. The hospital CEO, the
hospital board, and other senior hospital executives must actively
oversee the activities of hospital debt collection agencies and approve
of any debt collection actions taken by the debt collectors. The debt
collector must provide detailed information to patients about their
debt and payment history and the hospital's charity care policy. They
must charge a flat fee for their services, meaning they do not earn a
commission on debt they recover.
The agreements with the attorney general were renewed in 2007 for
an additional 5 years and are in the process of being renewed again for
an additional 5 years. The attorney general's office is sending new
agreements in coming months to hospitals. The MHA board of directors
unanimously passed a resolution at its May 18 meeting recommending that
our member hospitals sign the agreements.
The requirements of the agreements between Minnesota hospitals and
the attorney general are also similar to those standards adopted by
Congress as part of the Affordable Care Act. The ACA created a new
Section 501(r) of the Internal Revenue Code that includes standards of
conduct for non-profit hospitals that are very much in line with what
Minnesota hospitals have been doing since 2005.
In my visits around the State with our member hospitals recently, I
can say these situations you've heard about are rare and not the
standard. Minnesota hospitals are dedicated to providing exceptional
patient care and quality every time.
______
Accretive Health,
Chicago, IL 60611,
June 6, 2012.
Hon. Al Franken,
U.S. Senate,
Washington, DC 20510.
Dear Senator Franken: On behalf of Accretive Health and its
thousands of employees in Minnesota and around the country, I want to
thank you again for the opportunity to appear at last week's hearing to
speak about our company's work and the other critically important
issues you raised. I write today to correct the record with respect to
one issue.
At last week's hearing, Attorney General Swanson stated in her
testimony that Accretive Health and North Memorial Health Care worked
together to create and ``basically backdate'' a Business Associate
Agreement (``BAA''). The attorney general is mistaken.
In connection with the Accretive Health/North Memorial March 21,
2011 Revenue Cycle Management Agreement (``RCM''), both parties
contemplated, and the contract required, the execution of a Business
Associate Agreement (``BAA''). The parties believed they executed a BAA
prior to or at the time services commenced and, in accord with ordinary
and customary practice, acted at all times consistent with the terms of
the BAA, meeting all the requirements of HIPAA and HITECH. In October
2011, the parties could not locate the executed copy of the BAA.
Accordingly, a replacement BAA was signed in October 2011. The
replacement BAA was not back-dated. The only reference to a past date--
consistent with the requirements and execution date of the RCM
contract--was making the replacement BAA effective March 21, 2011 so
that it would accurately reflect the period during which RCM services
were provided. Accretive Health voluntarily produced documents related
to this issue to the attorney general's office, and also explained this
chronology to Attorney General Swanson in March 2012. In addition, it
is our understanding that North Memorial also produced documents
related to this issue and explained the BAA chronology to the attorney
general's office in April and again in May 2012.
Thank you again for the opportunity to be a part of last week's
proceedings.
Sincerely,
Greg Kazarian.
______
Minnesota Nurses Association (MNA),
St. Paul, MN 55102,
May 30, 2012.
Hon. Al Franken,
60 East Plato Blvd., Suite 220,
Saint Paul, MN 55107.
The Minnesota Nurses Association would like to thank Senator
Franken for holding this hearing today and to again, applaud Attorney
General Swanson for pursuing the investigation into Accretive Health's
debt collection tactics.
The Code of Ethics for Nurses directs patients be treated with
compassion and respect for the inherent dignity, worth and uniqueness
of every individual, unrestricted by considerations of social or
economic status. Requiring payment while patients lay in pain, is not
compassion. We know how financial stress can impact a patient's
compliance with health care directives and can create negative health
outcomes. We also promote, advocate and strive to protect the health,
safety and right of the patients. The unethical practice of demanding
bill payment for services not rendered is precisely why nurses are
needed on the front lines of patient advocacy. From a legal aspect, we
also question if Accretive is violating Federal EMTALA laws. Further
investigation is warranted and we would be eager to help Senator
Franken and Attorney General Swanson in every way possible to make sure
this cut-throat debt collection behavior is abolished in Minnesota.
Accretive Health's mission statements seem contradictory from their
actions. For example, on their Web site, one reads this corporation is
``. . . a built-for-purpose company with the sole focus of providing
end to end revenue cycle execution for providers.'' Its stated mission
is ``to strengthen the financial stability of health care providers
through excellence, best people, and leading technology there by
increasing health care access for all.'' We have to wonder how chasing
people out of the emergency room by demanding up front payment
increases access to health care? Their claims to increase access to
care by bringing increased discipline to the revenue cycle, but
services rendered are far different from demanded up front payment.
Most concerning for the future of health care, we notice that
Accretive claims they have signed an ``inaugural deal'' to help
providers become Accountable Care Organizations--a lynchpin of the
Affordable Care Act. As ACOs find their place in our health care
system, we should be wary of Accretive's past practices and best
practices.
The members of the Minnesota Nurses Association have long been
advocates for a single-payer health care system. This example of
ruthless ``profits before patients'' behavior is just one more reason
why our Nation should consider pursuing a payer system that is not
dependent upon free-market whims, that too frequently leaves patients
behind, and not at the forefront where they should be.
From our press release on May 8, MNA president Linda Hamilton, RN,
stated:
``On behalf of our 20,000 nurses, I want to thank Lori
Swanson for ignoring political pressure and corporate influence
and continuing to stand up for the patients we care for. What
Accretive is doing seems to be the epitome of the `profits-
before-patients' type of health care delivery that needs to
stop, and we're grateful Attorney General Swanson is having
none of it.''
Thank you again Senator Franken and Attorney General Swanson and we
stand ready to help in any way possible.
Sincerely,
Linda Hamilton, RN, BSN,
President, Minnesota Nurses Association.
______
May 25, 2012.
Hon. Al Franken,
60 East Plato Blvd, Suite 220,
Saint Paul, MN 55107.
Re: Statement for Field Hearing on Ensuring Patients' Access to Care
and Privacy
Dear Senator Franken: Patient advocates for rare disorders are
deeply concerned about protecting the personal health information of
these vulnerable patients. While we support the concept of using
technology and electronic medical record sharing to facilitate
coordination of care, patient education and scientific collaboration,
we are increasingly alarmed at the ease of access to personal medical
information by entities that either do not intend to abide by existing
regulation or who fall outside of the current regulatory structure and
whose primary interest is not patient welfare.
Specifically we are concerned that, because many people affected by
rare disorders have extraordinary health care needs, they may be
targeted in data collection efforts designed to identify ``outliers''
and restrict access to needed care and services. Additionally, the
sense of isolation experienced by those with rare disorders makes them
especially vulnerable to opportunities to share what should be
protected health data on public forums, particularly social networking
platforms, run by entities exempt from HIPAA statutes. This data then
becomes a valuable commodity for individuals and entities with no
regulatory requirement to protect patient privacy. Also, numerous non-
profit ``advocacy'' groups have entered the data collection fray, many
of which are in reality nothing more than industry-sponsored direct-to-
patient marketing and recruitment initiatives that allow companies to
collect data voluntarily provided by patients, while avoiding
compliance with regulatory requirements. It is increasingly difficult
to distinguish between legitimate and predatory initiatives, a
situation that potentially puts patients at great risk for misuse of
their personal data.
As representatives of patient advocacy organizations who work on
behalf of patients with extraordinary healthcare and research needs, we
question the value of imposing additional regulation that would
interfere with achieving patient care goals. However, we are aware that
personal health information has become a valuable commodity and believe
that regulation must ensure that the value derived from this commodity
actually goes to benefit the patients to whom these data ultimately
belong. To that end, we support regulatory efforts that have as their
objective improving patient care and access to services and research.
Sincerely,
Michele Manion, Executive Director,
Primary Ciliary Dyskinesia (PCD) Foundation.
Cynthia Le Mons, Executive Director,
National Urea Cycle Disorders Foundation (NUCDF).
Response to Questions of Senator Franken by Lori Swanson, Michael
Rothman, Charles Mooty, Gregory Kazarian, Jean Ross, RN, Michele
Goodwin, and Jessica L. Curtis, J.D.
lori swanson
Question 1. As you know, under Federal law, a hospital that wishes
to qualify for non-profit status must meet the ``community benefit
standard.'' In other words, hospitals are eligible for non-profit
status only if they promote the health of a broad class of individuals
in the community. Do you believe that the current Federal requirements
on non-profit hospitals are sufficient?
Answer 1. Non-profit charitable hospitals receive significant
benefits from taxpayers in the form of tax exemptions. They may qualify
for exemptions from sales, income, and property taxes and may issue
tax-exempt bonds. In exchange, charitable hospitals are expected to
fulfill a charitable purpose and act in a manner consistent with their
charitable duties and mission.
In 2005, the Office of the Minnesota attorney general entered into
an agreement with every hospital in Minnesota. The agreement
(hereinafter ``Hospital Agreement'') was renewed in 2007 for a 5-year
term. Prior to the Hospital Agreement in 2005, charitable hospitals in
Minnesota--like elsewhere in the country--charged significantly more to
uninsured patients than they charged to managed care companies or the
government for the same services. Under the Hospital Agreement,
Minnesota hospitals agreed to charge no more for uninsured treatment
than they charged to the private third-party payer that delivered the
most revenue to the hospital (which is typically the insurer that
negotiates the highest discounts). In addition, the Hospital Agreement
requires hospitals to adhere to certain collection standards. Under the
Hospital Agreement, hospitals must adopt charity care policies and
communicate those policies clearly to eligible patients. The agreement
also requires hospitals to comply with certain elevated standards
concerning debt collection, and requires a hospital's board of
directors to annually review the practices of any third-party
collection agencies, as well as the hospital's own internal collection
practices. The hospitals must have a ``zero tolerance'' policy against
abusive, harassing, or oppressive collection practices, whether by
their own employees or by outside collectors.
The Hospital Agreement contains industry-leading standards.
Congress should consider adopting the substantive provisions as law so
that patients throughout the country will receive these benefits and
protections.
Question 2. If patients' protected health information is not
secure, what would be the effect on our healthcare system, including on
patients' willingness to have candid conversations with their
healthcare providers?
Answer 2. The doctor-patient relationship is predicated on trust.
Medical privacy is a bedrock principle of the doctor-patient
relationship. Confidentiality is important to encourage a full and
frank exchange of information between patients and their doctors. If
patients are worried about whether their medical information will be
given to a debt collector or otherwise kept private, they may be less
willing to seek treatment. This would be detrimental not just to the
particular patient, but to the public as a whole as it relates to
illnesses like communicable diseases, mental health, and treatment of
chronic health conditions. Untreated communicable diseases and mental
health problems can impact public health and safety, and untreated
chronic health conditions can increase costs to be borne by taxpayers.
Question 3. You filed a complaint under Minnesota's debt collection
statute instead of under the Fair Debt Collection Practices Act
(FDCPA). Are there any weaknesses or loopholes in the FDCPA that make
it difficult for Attorneys General to enforce? And do you have any
suggestions for improving the statute?
Answer 3. Minnesota's debt collection law (Chapter 332 of the
Minnesota statutes) incorporates the substantive provisions of the
Federal Fair Debt Collection Practices Act (``FDCPA'') and applies to
collectors who collect ``accounts, bills, or other indebtedness.'' Not
every State, however, has adopted the substantive provisions of the
FDCPA. State attorneys general do not currently have authority to
directly bring an enforcement action under the FDCPA. That authority is
left primarily to the Federal Trade Commission and individual
consumers. Congress should consider giving State attorneys general the
same authority to bring a claim under the FDCPA as the Federal Trade
Commission. Congress should also increase the fines available to the
Government and consumers under the FDCPA. Beyond the medical debt
collection area, Congress should update the FDCPA to provide more
protections to consumers who are hounded by debt buyers for ``zombie
debt'' or money they do not owe.
Question 4. In your compliance report, you discuss Accretive's use
of incentives--including public recognition, prizes, and monetary
bonuses--to encourage Fairview employees to increase the amount of
money they collected from patients. What effect did these incentives
have on the culture at Fairview?
Answer 4. We found a culture clash between the mission of the
charitable hospital and Accretive's ``numbers driven'' culture.
A hospital emergency room is and should be a solemn place. It is a
place where parents lose children, children lose parents, and spouses
lose each other. It is a place of medical trauma and emotional
suffering. Charitable hospitals more broadly should be sanctuaries to
treat the sick, the injured, and the infirm.
By contrast, Accretive's management contract unduly incentivized
Accretive to ignore the culture, mission, and duties of the charitable
hospital, and the charitable hospital was unable to restrain Accretive.
Accretive assumed day-to-day management responsibility for the hospital
employees who perform registration, admissions, and collections
functions. Accretive used ``chalk talks'' to enforce collection quotas
among hospital registration and admission staff, including in the ER.
It gave hospital emergency room and registration staff prizes for
meeting their collection quotas. Accretive managers promised to wear
clown outfits or costumes if hospital employees met their collection
quotas. The company's tactics failed to reflect proper compassion and
concern for the dignity and well-being of patients.
michael rothman
June 20, 2012.
Hon. Al Franken,
Committee on Health, Education, Labor, and Pensions,
U.S. Senate,
Washington, DC 20510.
Dear Senator Franken: I write in response to your June 12, 2012
request concerning the three questions for the record following your
May 12, 2012 Committee on Health, Education, Labor, and Pensions field
hearing in St. Paul. I appreciate the opportunity to provide the
answers to your questions below.
______
Question 1. I understand that your Commission conducted an
investigation into Accretive's call center in Kalamazoo, MI. The
attorney general's report says that your examiners listened to
recordings of calls between the debt collectors and patients and that
the debt collectors were using private health information in those
calls. How was private health information used in those calls? If you
cannot discuss specifics about this case, please explain how debt
collectors could potentially use private health information in an
inappropriate or illegal manner while attempting to collect debts?
Answer 1. While I would like to provide specific details on the
record at this time, the details relating to an ongoing investigation
in the Accretive matter are classified as confidential until the
investigation is no longer active under Minnesota Statutes Section
13.39.
With respect to the second part of the question, over the past year
and a half and as a general proposition, consumers' financial
information and other personal information such as health information
can be at risk because of inadvertent or intentional improper access to
this consumer information. Investigations conducted by the Department
of Commerce have revealed that consumers' personal information has been
inappropriately compromised and in some instances stolen during the
course of collection activity by individual collectors. While Minnesota
law prohibits a collector from using consumers' personal information
for anything other than the collection activity, there are instances
when this has not taken place. Thus, it is always a concern that
identity theft, improper tactics, and other types of fraud may occur.
If the Department of Commerce becomes aware of any such activity
through individual complaints or other means, our staff works to
carefully determine the merit of these complaints. When warranted, the
Department's review may move to the stage of a formal, comprehensive
investigation.
Question 2. Please describe the key differences between Minnesota's
debt collection statute and the Fair Debt Collection Practices Act.
Answer 2. Our staff prepared an outline of differences between
Minnesota's debt collection statute and the Fair Debt Collection
Practices Act (FDCPA), which I have attached as Exhibits A and B.
Exhibit A is a brief discussion of Minnesota law relative to the Fair
Debt Collection Practices Act (FDCPA). Exhibit B is a chart that
compares both laws section by section. Please note that Exhibit B
contains relevant information from the statutes, not necessarily the
exact language or entire text of the provisions. Please reference the
statutes for exact language as necessary.
Question 3. In your view--and based on your work on this case and
others--are there areas of Federal debt collection law that need to be
updated or improved to protect patients in Minnesota and throughout the
country?
Answer 3. During the May 30, 2012 Committee on Health, Education,
Labor, and Pensions field hearing, two Minnesota consumers testified to
experiences they had where they were asked for prepayment before
receiving treatment while at the hospital. Additionally, there have
been news reports that consumers had been asked to pay debts while they
or a family member were about to undergo treatment. With respect to
these instances, it appears that section 1692c(a)(1) of the FDCPA
offers consumers the following protection from communications at any
unusual time or place or a time or place known or which should be known
to be inconvenient to the consumer:
(a) Communication with the consumer generally
Without the prior consent of the consumer given directly to the
debt collector or the express permission of a court of competent
jurisdiction, a debt collector may not communicate with a consumer in
connection with the collection of any debt--
(1) at any unusual time or place or a time or place known or
which should be known to be inconvenient to the consumer. In
the absence of knowledge of circumstances to the contrary, a
debt collector shall assume that the convenient time for
communicating with a consumer is after 8 o'clock antemeridian
and before 9 o'clock postmeridian, local time at the consumer's
location;
As a suggestion, you may wish to consider strengthening this
provision to clearly address issues of concern that were raised during
the May 30, 2012 field hearing. For example, Minnesota law addresses
this issue to some extent. Minnesota Statutes section 332.37(14) (2012)
states that,
``No collection agency or collector shall . . . in collection
letters or publication, or in any communication, oral or
written, imply or suggest that health care services will be
withheld in an emergency situation.''
Thank you for the opportunity to respond to your questions. Please
let me know if I can be of further assistance to you.
Sincerely,
Mike Rothman,
Commissioner.
______
Exhibit A
Date: June 19, 2012
To: The Honorable Al Franken
From: The Minnesota Department of Commerce
Re: Comparison of Minn. Stat. Ch. 332 and the FDCPA (Exhibit A)
issue
Identify key differences between Minnesota's debt collection
statute and the Federal Fair Debt Collection Practices Act.
short answer
The most significant differences included in the Minnesota debt
collection statute are:
the methodology of licensing and registering debt
collectors and debt collection agencies,
the ability of the Commissioner of Commerce
(``commissioner'') to take action in relation to such licenses and
registrations,
supplemental debt collection conduct prohibitions, and
additional protective measures.
introduction
The Minnesota debt collection statute, Minn. Stat. 332.31 et. seq.
(2012) (``Minnesota statute''), and the Federal Fair Debt Collection
Practices Act, 15 U.S.C.A. 1692a et. seq. (``Federal FDCPA'') contain
the same general approach in relation to debt collection in an attempt
to protect consumers and facilitate fair competition amongst debt
collectors. Both statutes prescribe behavior requirements and dictate
prohibited conduct for debt collectors, as well as provide consequences
and penalties for violations. The Federal FDCPA grants regulatory
authority for debt collection to the Federal Trade Commission
(``FTC''), and the Minnesota statute grants like authority to the
commissioner. The crucial difference, however, is the method utilized
to attain the objective of fair debt collection. The Minnesota statute
includes a system of registration and licensure for both debt
collection agencies and individual debt collectors. Further, the
Minnesota statute affords protection to consumers through various
prohibited conduct provisions in addition to those in the Federal
FDCPA, and includes several additional protective measures.
In general, the Minnesota statute offers an approach that is
focused on prevention of unfair debt collection practices with an
emphasis on requiring financial responsibility, transparency to ensure
accountability and compliance, and availability of information to
facilitate effective enforcement of regulations.
discussion
I. Methodology
A. Generally
A comparison of the Federal FDCPA and the Minnesota statute reveals
similar objectives, language and approach on a broad level. Both
regulatory schemes endeavor to protect consumers and promote fair
competition among debt collectors. The Minnesota statute, however, is
distinct from the Federal FDCPA in several respects. First, the
Minnesota statute distinguishes between debt collection agencies and
individual debt collectors, wherein a debt collector is a person acting
under the authority of a debt collector. This distinction is necessary
to effectuate Minnesota's system of licensing and registration, as
discussed below. The Federal FDCPA, on the other hand, regulates the
activities of agencies and collectors more generally as ``debt
collectors.'' 15 U.S.C.A. 1692a(6).
In addition, the Federal FDCPA is more detailed in structure as it
divides required conduct and prohibited behavior into separate
sections, whereas the Minnesota statute more generally includes all
prohibited practices into one section. The Federal FDCPA goes into more
depth than the Minnesota statute in relation to some of these
practices, including: acquisition of location information,
communication with consumers and third parties, furnishing deceptive
forms, exclusions and exemptions from the chapter, exceptions for
certain bad check enforcement programs, and more. It is important to
note, however, that the Minnesota statute incorporates any violation of
the Federal FDCPA as a violation of the Minnesota statute in its
Prohibited Practices section. Minn. Stat. 332.37(12).
B. Licensing and Registration
A critical difference between the Federal FDCPA and the Minnesota
statute is Minnesota's system of licensing and registration. The
Federal FDCPA does not require debt collectors to obtain licenses or
register with any government entity before conducting debt collection
activity. Rather, the FTC has authority to enforce compliance of the
FDCPA unless authority is specifically committed to another government
agency. 15 U.S.C.A. 1692l(a). Likewise, the FDCPA grants the Bureau of
Consumer Financial Protection the authority to prescribe rules with
respect to debt collection. 15 U.S.C.A. 1692l(d). Further, the FDCPA
stipulates that persons are subject to State debt collection laws
except to the extent that State laws are inconsistent with the FDCPA.
15 U.S.C.A. 1692n. Inconsistency, however, does not include protection
afforded to consumers that is greater than the protection in the FDCPA.
Id. Thus, the Minnesota statute works to implement an additional level
of protection to Minnesota consumers in relation to fair debt
collection.
Minnesota Statutes sections 332.33-.355 (``the license
provisions'') comprise the debt collection licensure and registration
component of the Minnesota statute. Minnesota Statutes Section 332.33,
Subdivision 1 requires any person to apply for and obtain a collection
agency license from the commissioner before conducting business as a
collection agency or engaging in the business of collecting claims for
others. In addition, any person acting under the authority of a
collection agency as a collector must be registered with the
commissioner. Id. Thus, a collection agency must register with the
State all individual employees who perform the duties of a debt
collector. Minn. Stat. 332.33 Subd. 5a. The penalty for violating the
license and registration requirements, and for carrying on business
after the revocation, suspension, or expiration of a license or
registration, is a misdemeanor. Minn. Stat. 332.33 Subd. 2. This
penalty is unique to the Minnesota statute, as the Federal FDCPA lacks
a license and registration requirement and imposes civil liability for
violations of the statute in the form of damages. 15 U.S.C.A. 1692k.
The Minnesota statute's license provisions specify detailed
requirements for the process of obtaining, using and renewing debt
collection licenses and registrations. This includes term limits,
application and renewal fees, display and notice requirements and more.
Minn. Stat. 332.33 Subd. 3-8. In addition, the license provisions
prescribe the commissioner's method for granting and rejecting license
and registration applicants. Minn. Stat. 332.33 Subd. 4-5. As a
further method of protection, Minnesota Statutes section 332.33,
subdivision 8 requires each licensed collection agency to establish
screening procedures for debt collector applicants prior to submitting
applicants to the commissioner for registration. The commissioner has
the authority to review such procedures. Id. Likewise, licensed
collection agencies must notify the commissioner of any employee
termination within 10 days of termination if it is based on a violation
of the Minnesota statute. Minn. Stat. 332.385.
As previously discussed, the Minnesota statute differentiates
between debt collection agencies and individual debt collectors, Minn.
Stat. 332.31, whereas the Federal FDCPA does not, 15 U.S.C.A.
1692a(6). The Minnesota statute grants the commissioner authority ``to
take action against any collection agency for any violations of debt
collection laws by its debt collectors.'' Minn. Stat. 332.355.
Likewise, the commissioner ``may also take action against the debt
collectors themselves for these same violations.'' Id. This in effect
creates an incentive for collection agencies to employ responsible debt
collectors, as well as an incentive for debt collectors to comply with
debt collection laws, for either or both may be liable for violations.
Overall, the Minnesota system of debt collection licensing and
registration provides an additional level of protection for consumers
and facilitates fair competition among debt collectors generally. The
license provisions also provide a more direct route for the
commissioner to support, regulate and take action in regards to debt
collection in Minnesota.
II. Prohibited Practices
Both the Minnesota statute and Federal FDCPA include a list of
conduct that is prohibited for debt collectors and/or debt collection
agencies. Many of the provisions are similar and effectively the same;
however there are many provisions that are unique to both. One
important inclusion in the Minnesota statute's Prohibited Practice's
section's provision that no collection agency or collector shall
``violate any of the provisions of the Fair Debt Collection Practices
Act of 1977, Public Law 95-109, while attempting to collect on any
account, bill or other indebtedness.'' Minn. Stat. 332.37(12).
Therefore, though certain provisions appearing in the Federal FDCPA do
not have an equivalent provision in the Minnesota statute, it follows
that the violation of Federal FDCPA provisions implies a violation of
the Minnesota statute as well.
Several notable provisions appear in the Minnesota statute's
Prohibited Practices section that establish additional protections for
consumers beyond the protection afforded by the Federal FDCPA. A full
account of these provisions is included in Appendix A under Minnesota
Statutes section 332.37. One of the most prominent is Minnesota
Statutes section 332.37(14), which provides, no collection agency or
collector shall ``in any communication imply or suggest that health
care services will be withheld in an emergency situation.'' Id. This
provision effectuates the objective of protecting consumers from
threatening behavior in their most vulnerable moments. Likewise,
several provisions in the Minnesota statute attempt to prevent
deceptive debt collection behavior. Minnesota Statutes section
332.37(21) requires debt collectors and agencies to provide a
disclosure notice that includes a statement that they are properly
licensed when initially contacting debtors by mail. Specifically, this
statement must be of equal or greater font size than the text of the
notice. Minnesota Statutes section 332.37(18) stipulates that
collection agencies and debt collectors shall not accept payment
without issuing a receipt. This prevents scenarios when debt collectors
could unfairly take advantage of debtors who have in fact made
payments. Likewise, debt collectors and agencies may not use shame
cards or shame automobiles to coerce payment. Minn. Stat. 332.37(7).
This goes beyond the Federal FDCPA requirement that mail to debtors may
not include language that indicates its purpose for debt collection. 15
U.S.C.A. 1692f(8). Overall, in accordance with the Federal FDCPA, the
Minnesota statute provides a greater level of protection for consumers
by imposing additional prohibited behaviors on debt collection agencies
and collectors.
III. Specific Additional Provisions
Several other important provisions in the Minnesota statute do not
appear to have equivalent provisions in the Federal FDCPA. These
provisions afford subsequent levels of protection to consumers and/or
deterrence for unfair debt collection practices. Minn. Stat. 332.34,
for example, requires that each collection agency licensee must file
and maintain a corporate surety bond with the commissioner. Likewise,
Minnesota Statutes 332.345 stipulates that payments collected by
collectors or collections agencies on behalf of customers must be held
by in a separate account in an authorized institution clearly
designated for customer funds. Further, Minnesota Statutes 332.35
provides the commissioner shall not issue a license to or register any
person, firm, corporation or association who has been convicted of
fraud or a felony in the past 5 years for failure to account money
collected by them to their clients or customers. This effectively
disqualifies such persons or entities from engaging in lawful debt
collection activity, and acts as a deterrent, penalty and barrier to
re-entry for violators.
The Minnesota statute also grants the commissioner authority in
relation to licenses and registrations that appears to go beyond the
authority of the FTC under the Federal FDCPA. The commissioner may
institute proceedings or impose civil penalties within 2 years if a
license or registration relapses, is surrendered, withdrawn, terminated
or otherwise becomes ineffective. Minn. Stat. 332.395. In addition,
the commissioner may make examinations of collection records in order
to enforce the Minnesota statute. Minn. Stat. 332.40 Subd. 1. Licensed
collection agencies are required to keep such books and records in the
place of business in this State. Minn. Stat. 332.42 Subd. 2. The
commissioner may also require a licensed agency to submit a verified
financial statement for examination to determine whether the collection
agency is financially responsible and solvent. Minn. Stat. 332.42,
Subd. 1. If upon examination of records the commissioner discovers any
violation, the commissioner may revoke or suspend a license or
registration. Minn. Stat. 332.Subd. 1. Similarly, in order to
determine if a license or registration should be issued, the
commissioner may investigate within or without this State as necessary
to verify whether any person has violated the Federal FDCPA. Minn.
Stat. 332.40 Subd. 2. In addition, the commissioner may use the power
of subpoena to effectuate the purpose of any investigation under this
section. Minn. Stat. 332.40 Subd. 3.
In general, the additional provisions present in the Minnesota
statute where an equivalent provision is not expressly included in the
FDCPA, effectively promote greater protection for consumers and fair
conduct by debt collectors. The provisions in the Minnesota statute
related to the commissioner's authority and violations of this chapter
compliment these objectives by providing direct method of remedy and
avenue of enforcement. The additional provisions advance the purposes
of the Federal FDCPA by further deterring unfair debt collection
practice and rectifying damage created by such.
conclusion
The Federal FDCPA and the Minnesota statute both endeavor to ensure
adequate consumer protection from unfair debt collection practices and
support fair competition among debt collectors. The Minnesota statute
supplements the Federal FDCPA through its method of issuing licenses
for debt collection agencies and registering individual debt
collectors. This allows for a greater measure of regulation and an
effective method of enforcement by the commissioner. Specific debt
collector prohibited practices in addition to those provided in the
Federal FDCPA also promote a greater level of protection for consumers.
Additional provisions in the Minnesota statute not found in the Federal
FDCPA effectively provide more protection for consumers and facilitate
fair debt collection in the State of Minnesota.
Exhibit B
Fair Debt Collection Practices Act (Exhibit B)
----------------------------------------------------------------------------------------------------------------
Federal Minnesota
----------------------------------------------------------------------------------------------------------------
Section Title Description Section Title Description
----------------------------------------------------------------------------------------------------------------
1692a........................ Definitions..... (6): Defines 332.31 Definitions..... Subd. 3:
``debt Defines
collector'' ``collection
broadly, does agency'' as
not distinguish any person
between (individuals,
individual partnerships,
collectors and associations
agencies. or
corporations)
engaged in
business of
collection for
others;
Subd. 6:
Defines
``collector''
as a person
acting under
the authority
of a
collection
agency.
1692b........................ Acquisition of Allows a debt
location collector to
information. communicate
with persons
other than the
consumer to
acquire
location
information
including place
of abode,
telephone
number and
place of
employment. The
consumer is any
natural person
obligated or
allegedly
obligated to
pay any debt.
(1)-(6) address
limits on
communication
methods
employed by
debt collectors
with parties
other than the
consumer;
collector must
identify
himself,
prohibits
communicating
more than once
without
specific
request,
communication
by postcard,
statements that
the consumer
owes debt, and
communication
with persons
other than an
attorney if
collector
possesses
knowledge of
representation
by attorney.
332.33 Licensing and Subd. 1:
Registration. Requires a
person
conducting a
collection
agency or
collecting
claims in
Minnesota to
apply for and
obtain a
collection
agency license
prior to
conducting
business;
Subd. 1: Also
requires a
person acting
under the
authority of a
collection
agency to
register with
the
commissioner.
Subd. 2:
Penalty, A
person who
conducts
business as a
collection
agency before
obtaining a
license, or
acts as a
collector
without first
registering,
or carries on
with business
after
revocation,
suspension or
expiration of
a license or
registration,
is guilty of a
misdemeanor.
Subd. 3: Term
Licenses and
registrations
expire on June
30.
Subd. 4 Permits
the
commissioner
to conduct
investigations
and require
financial
documents
pertaining to
the financial
adequacy of
license and
registration
applicants.
Subd. 5:
Describes the
collection
agency license
issuing
procedure.
Subd. 5a
Requires
licensed
collection
agencies to
register all
individual
employees who
act as debt
collectors.
Subd. 8:
Requires
collection
agencies to
establish
procedures for
screening
individual
collector
applicants
prior to
submitting
registration
applications
to the
commissioner.
332.3351 Exemption from Allows
licensure. collection
agencies
exemption from
licensure and
registration
requirements
if specified
conditions are
met.
1692c........................ Communication Dictates
with consumer. prohibited
behavior for
communicating
directly with
consumers.
Consumer for
this section
includes:
consumer's
spouse, parent
(if minor),
guardian,
executor or
administrator.
(a)(1)-(3):
Prohibits
communication
at unusual
times or places
known to be
inconvenient
(convenient is
8:00am-9:00pm
consumer's
local time
only),
communication
directly with
consumer if
represented by
an attorney or
at consumer's
place of
employment.
Communication (b): Prohibits
with third debt collector
parties. communication
with third
parties, unless
given prior
consent
directly from
the consumer or
court of
competent
jurisdiction,
or acting
within Sec.
1692b. Debt
collector may
communicate
with consumer's
attorney,
attorney of the
creditor,
attorney of the
debt collector,
or consumer
reporting
agency if
permitted by
law.
Ceasing (c): Prohibits
Communication. further
communication
if consumer
notifies debt
collector in
writing that
consumer
refuses to pay
the debt or
wishes to cease
communication.
(c): Exceptions
include
advising
consumer that
collection
efforts are
being
terminated, and
notifying
consumer that
debt collector
or creditor may
or intends to
invoke
specified
remedies.
Sec. 332.3 Bond............ Requires
4 collection
agencies to
file and
maintain a
corporate
surety bond of
at least
$50,000, or
deposit cash
deemed
acceptable by
commissioner
in lieu of a
bond.
Sec. 332.3 Prior conviction Registration
5 or judgment as and licenses
disqualificatio shall not be
n. issued to any
person, firm,
corporation,
association or
any of its
officers if
convicted of
fraud, felony
or had
judgment
against them
for failure to
account
collections to
customers
within the
past five
years.
Sec. 332.3 Segregated Requires
45 Accounts. collectors and
collection
agencies to
deposit
payments
collected on
behalf of
customers in
an account
clearly
designated for
customer funds
in an
authorized
bank or other
institution.
Sec. 332.3 Agency The
55 responsibility commissioner
for collectors. may take
action against
collection
agencies and
debt
collectors
themselves for
violations of
debt
collection
laws.
Sec. 1692d................... Harassment or Details Sec. 332.3 Prohibited Details
abuse. prohibited debt 7 Practices. prohibited
collector conduct for
conduct in debt
connection with collection. No
the collection collection
of a debt. agency or
Generally, may collector
not harass, shall:
oppress or
abuse any
person in
connection with
collection of
debt. A debt
collector may
not:
(1) threaten or .......... .............. (2) employ
use violence or sheriffs or
criminal means other officers
to harm the in connection
physical with
person, collection
reputation or unless
property of any performing
person. legally
authorized
duties.
(2) use obscene .......... .............. (3) threaten or
or profane use methods of
language to collection in
abuse hearer or violation of
reader. Minnesota law.
(6) telephone .......... .............. (4) furnish
calls without legal advice
meaningful or engage in
disclosure of the practice
identity of law or
(except under represent that
Sec. 1692b). it is
competent to
do so.
Sec. 1692e................... False or Generally, a .......... .............. (6) exercise
misleading debt collector authority on
representations. may not use any behalf of
false, creditor to
deceptive or employ lawyer
misleading unless
representation specifically
or means in authorized to
connection with do so.
collection of
debt.
Violations
include, but
are not limited
to:
(2)(A)-(B) false .......... .............. (7) use shame
representation cards or shame
of character, automobiles.
amount or legal
status of any
debt; and
compensation
which may be
received by
debt collector
for collection.
(4) .......... .............. (8) refuse to
representation return any
or implication claim or
that nonpayment valuable
of debt will papers to
result in creditor,
imprisonment of claimant or
any person, or forwarder;
seizure of refuse or fail
property, to account to
unless action clients all
is lawful and money
intended to be collected
taken. within 30 days
of the last
day of the
month in which
it was
collected.
(6)(A)-(B) false .......... .............. (10) use
representation customer's
or implication money to
that a sale, conduct agency
referral or business.
transfer or
interest in a
debt shall
cause the
consumer to
lose any claim
or defense to
payment or
become subject
to prohibited
practices.
(7) false .......... .............. (11) act as
representation debt adjuster
or implication or prorater
that consumer unless no
committed crime charge to the
or other debtor or done
conduct in under court
order to order.
disgrace
consumer.
(10) false .......... .............. (12) Violate
representation any of the
or deceptive provisions of
means to the Fair Debt
collect or Collection
attempt to Practices Act
collect debt or of 1977 while
obtain attempting to
information collect on any
about consumer. account, bill
or other
indebtedness.
(12) false .......... .............. (14) in any
representation communication
or implication imply or
that accounts suggest that
have been health care
turned over to services will
innocent be withheld in
purchasers for an emergency
value. situation.
(14) use of any .......... .............. (15) enlist
business, neighbors or
company, or third parties
organization to aid with
name other than collection of
the true name debt when
of the debt debtor has
collector's. listed phone
number.
(15) false .......... .............. (16) fail to
representation provide the
that documents debtor with
are not legal full agency
process forms name as it
or do not appears on its
require action license when
by the consumer. attempting to
collect a
debt.
(16) false .......... .............. (17) collect
representation money that is
or implication not reported
that debt to creditor;
collector is a fail to return
consumer overpayment to
reporting debtors.
agency.
Sec. 1692f................... Unfair practices Debt collectors .......... .............. (18) accept
may not use payment
unfair or without
unconscionable issuing an
means to original
collect or receipt to
attempt to debtor and
collect any maintaining a
debt. The duplicate in
following records.
conduct is a
violation:
(1) collection .......... .............. (19) attempt to
of any amount collect money
unless or charge fees
expressly that are not
authorized by authorized by
the agreement client
or permitted by agreement.
law.
(2)-(4) .......... .............. (21) when
acceptance and initially
deposits of contacting by
checks or mail, fail to
payments, include
threatening to disclosure
deposit notice in
postdated equal or
checks. larger font
size than text
of notice.
Disclosure
must state:
``This
collection
agency is
licensed by
the Minnesota
Department of
Commerce.''
(5) causing
charges to be
made to any
person for
communications
by concealment
of true purpose
of
communication.
(6) threatening
or taking any
nonjudicial
action to
dispossess
property if
there is no
right to it as
collateral,
present
intention to
take property,
or property is
exempt by law.
(7)
communicating
by postcard.
(8) use any
language or
symbol on
envelopes
except debt
collectors
address or name
if such name
does not
indicate he is
in the debt
collection
business.
Sec. 1692g................... Validation of (a)(1)-(5)
debts. within five
days after
initial
communication
with consumer
in connection
with collector
of any debt,
debt collector
shall send
consumer
written notice.
Notice must
contain amount
of debt, name
of creditor to
who debt is
owed, statement
that debtor has
30 days to
dispute, and
statement that
collector will
provide
consumer with
name and
address of
original
creditor if
different from
current.
(c) the failure
of a consumer
to dispute the
validity of a
debt may not be
construed by
the court as an
admission of
liability.
(d)
communication
in the form of
a formal
pleading shall
not be treated
as initial
communication
for purposes of
subsection (a)
of this section.
Sec. 1692h................... Multiple debts.. If consumer owes
multiple debts
and makes a
single payment
to debt
collector,
collector may
not apply
payment to any
debt which is
disputed and
shall apply
such payment in
accordance with
consumer's
directions.
----------------------------------------------------------------------------------------------------------------
charles mooty
Thank you Chairman Franken, for the opportunity to provide
additional information about Fairview's values with respect to patient
privacy and our Community Care programs.
______
Question 1. Exhibit 6 to Volume 4 of the attorney general's report
is a slide from a presentation about Fairview's and Accretive's
respective views about laptop thefts. It says that Fairview's
perspective was that, ``Accretive Health's treatment of laptop theft
was fundamentally different than Fairview's values.'' What are
Fairview's values with respect to the privacy of patients' health
information? Do you believe those values differ from Accretive's, and,
if so, how?
Answer 1. Fairview's values of dignity, integrity, service and
compassion extend to all aspects of how we deliver care to our
patients, including the protection of patient health information.
Fairview takes the responsibility to protect the privacy and security
of patient health information seriously. We treat the information we
document and receive in providing the best possible care to our
patients with dignity and respect. We maintain the confidentiality of
patient health information; we collect that information necessary to
provide high-quality patient care and access patient health information
only when necessary.
As part of Fairview's commitment to the privacy and security of our
patient's health information, we require our vendors to secure and
protect patient health information. This includes compliance with HIPAA
and other legal requirements, including following security and privacy
standards, the use of appropriate safeguards to secure the health
information of Fairview patients and to use or disclose patient health
information only as permitted or required to carry out necessary
services.
Question 2. Please describe Fairview's charity care program and
policies, including the number of patients served and an explanation as
to how and when patients are given information about the program,
including its application process and eligibility requirements.
Answer 2. Fairview operates Community Care Programs (charity care)
in both the hospital and free-standing clinic settings. These programs
enable Fairview to provide quality medical services to the people in
our community. There may be many reasons individuals are unable to pay
all or part of a medical bill. Fairview's Community Care Programs offer
a potential means of assistance to patients needing help paying for all
or part of the cost of medical services. These programs are intended to
ensure that the financial capability of our patients who need care does
not prevent them from seeking or receiving care. In addition to the
Community Care Programs, Fairview offers other means of assistance
including discounts for uninsured patients and prescription drug
assistance for patients experiencing financial hardship.
Fairview's Hospital-Based Community Care Program is available to
assist patients who are or may receive care in Fairview hospitals and
may not have sufficient insurance or who do not have access to
insurance. Fairview's Free Standing Clinics Community Care Program is
offered to patients who do not have access to health care coverage. In
2010, Fairview's Hospital Community Care Program provided assistance to
patients for more than 22,985 patient visits.
Information about Fairview's Community Care Programs is
communicated widely to patients, both prior to receiving services and
during the billing process. Information is posted for patients on
Fairview's Web site, including the application process and eligibility,
and in all clinic and emergency rooms. Brochures are widely available
for patients explaining the program and application process. In
addition, information about the programs is available on billing
statements. Further, information and resources regarding medical
assistance and Fairview's Community Care Programs are provided to
patients during the registration process.
gregory kazarian
Accretive Health appreciates the opportunity to provide additional
information about our company and the work we do to help hospitals
strengthen their financial stability. We believe our work is critical
to helping hospitals adapt to a changing healthcare landscape so that
they can continue to provide high-quality healthcare in the communities
they serve and better serve their patients.
Please find attached Accretive Health's responses to your
supplemental questions. Over the last 7 days, our company and its
employees have worked diligently to gather the information necessary to
respond to your questions. We have responded below as completely as
possible given the timeframe, the records and employees accessible to
us, and the pending litigation with the Office of the Minnesota
attorney general. The company will continue to investigate these issues
over many months in its ongoing litigation and reserves the right to
amend these responses at a later date should that be necessary.
Question 1. How many Accretive computers containing protected
health information (PHI) have been lost or stolen since the company
began providing services to hospitals and other healthcare systems? For
each computer that has been lost or stolen, please describe the
incident, including:
a. whether the computer was a laptop or desktop;
b. the date on which the computer was lost or stolen;
c. the location from which the computer was lost or stolen;
d. whether the computer was stolen from an employee's vehicle;
e. the nature and extent of the PHI the computer contained;
f. the number of patients for whom PHI was included on the
computer;
g. whether the computer contained PHI from hospitals or
healthcare systems other than those at which the computer's custodian
worked;
h. the nature of the custodian's employment with Accretive,
including whether the custodian was employed exclusively in revenue
cycle management operations;
i. the basis on which Accretive believed the custodian needed the
PHI contained on the lost or stolen computer to perform his or her job
duties; and
j. whether Accretive reported the data breach to its customer.
Answer 1. Accretive Health takes seriously the confidentiality of
protected health information (``PHI''). For this reason, Accretive
Health policy requires the encryption of each company laptop and
desktop computer.
On July 25, 2011, an Accretive Health revenue cycle employee's
laptop was stolen from the back seat of a locked rental car. At
approximately 8 p.m., the employee entered a restaurant in the Seven
Corners area of Minneapolis. When the employee returned to his rental
car approximately 20 minutes later, he found that the rear passenger
window of the vehicle had been smashed and that his briefcase--
containing his laptop--had been stolen. The employee immediately
reported the theft to the Minneapolis police department and then
notified Accretive Health.
The July 25, 2011 theft is the one and only incident of which
Accretive Health is aware involving the loss or theft of a company
computer that was not properly encrypted. Following this theft,
Accretive Health determined that the stolen laptop was one of
approximately 30 laptop computers that was not properly encrypted due
to the error of an individual IT employee. That employee was
terminated.
Since that time, Accretive Health has added redundancies to its
practices to ensure that each company computer is and remains properly
encrypted. Multiple IT employees now check each computer to confirm
that it is properly encrypted. Accretive Health conducts reviews at
least five times each week to confirm that every computer remains
properly encrypted. And Accretive Health has recently adopted further
protections for PHI by rolling out a new e-mail encryption system and
working to implement company-wide use of drive-based encryption, which
will bring Accretive Health's systems to higher-than-industry standard.
According to Accretive Health records (which date from May 2008), a
total of 24 company computers--all laptops--have been lost or stolen.
Four of these were subsequently recovered. According to company
records, no desktop computers were lost or stolen during this time
period.
Details concerning each lost or stolen laptop are outlined below in
Table 1.
Table 1. Twenty-Four Laptops Lost or Stolen Between May 2008 and the Present
----------------------------------------------------------------------------------------------------------------
Date of incident Location Employee's role \1\ Laptop encrypted?
----------------------------------------------------------------------------------------------------------------
May 7, 2008.......................... Car.................... Revenue Cycle Yes
Management (``RCM'').
Jan. 27, 2009........................ Unspecified............ Medicaid Eligibility Yes
Hub.
Feb. 3, 2009......................... Domestic Dispute....... RCM.................... Yes
Jan. 20, 2010 (recovered)............ Unspecified............ Human Resources........ Yes
June 3, 2010......................... Car.................... RCM.................... Yes
July 15, 2010........................ Hospital............... RCM.................... Yes
Sept. 16, 2010....................... Unspecified............ Physician Advisory Yes
Service (``PAS'').
Oct. 1, 2010 (recovered)............. Unspecified............ RCM.................... Yes
Nov. 15, 2010........................ Car.................... RCM.................... Yes
Nov. 17, 2010........................ Car.................... PAS.................... Yes
Jan. 17, 2011........................ Car.................... Quality and Total Cost Yes
of Care (``QTCC'').
Mar. 31, 2011........................ Home Garage............ QTCC................... Yes
July 25, 2011........................ Car.................... RCM.................... No
Sept. 29, 2011....................... Condo Garage........... PAS.................... Yes
Nov. 7, 2011 (recovered)............. Unspecified............ IT..................... Yes
Nov. 11, 2011........................ Trunk of Car........... IT..................... Yes
Dec. 21, 2011 (recovered)............ Unspecified............ RCM.................... Yes
Dec. 23, 2011........................ Restaurant............. PAS.................... Yes
Dec. 23, 2011........................ Restaurant............. PAS.................... Yes
Jan. 23, 2012........................ Home................... IT..................... Yes
Jan. 26, 2012........................ Office................. PAS.................... Yes
Mar. 8, 2012......................... Home................... PAS.................... Yes
Apr. 12, 2012........................ Trunk of Car........... RCM.................... Yes
June 8, 2012......................... Public Transportation.. RCM.................... Yes
----------------------------------------------------------------------------------------------------------------
\1\ See Accretive Health's response to question 7, in which we explain the basis for Accretive Health employees'
access to PHI.
Aside from the laptop stolen on July 25, 2011, each lost or stolen
laptop was encrypted. Although Accretive Health believes that several
of the laptops identified in Table 1 may have contained PHI, Accretive
Health did not undertake an examination of the backup data for these
laptops because Accretive Health's encryption software rendered any PHI
inaccessible and unusable as contemplated by the ``safe harbor'' under
HITECH. For this reason, reporting was not required by Federal law.
Importantly, Accretive Health has no reason to believe that the loss or
theft of any company laptop--including the laptop stolen on July 25,
2011--has resulted in the unauthorized disclosure of PHI to any third
party.
Question 2. Have any other Accretive media--such as thumb drives,
compact disks, and tablets--containing PHI been lost or stolen? If so,
please describe each incident, including the information requested in
question 1 and its sub-parts.
Question 3. Have any of Accretive's paper documents containing PHI
been lost or stolen? If so, please describe each incident, including
the information requested in question 1 and its sub-parts.
Answer 2 and 3. Accretive Health has not identified any reports of
any such loss or theft, aside from the reports of lost or stolen
laptops summarized in response to question 1.
Question 4. In my April 27, 2012, letter to Accretive, I asked
about allegations that Accretive laptops containing PHI had been lost
or stolen. In your response to question 10, you wrote this:
``Context is important: in 2011, Accretive Health had
approximately 1,400 laptop and desktop computers in use by its
employees.'' (Emphasis added.)
Later in your letter, in response to Question 11, you wrote this:
``[The laptop stolen from Mr. Doyle's car] was one of
approximately 30 laptops (out of 1,400 laptop and desktop
computers) missing Accretive Health's required encryption
software.'' (Emphasis added.)
Then, in your written testimony, you wrote this:
``[T]he laptop stolen in July 2011 was one of approximately
30--out of more than 1,400--that was not encrypted[.]''
I agree that context is important, but I found this series of
responses to be confusing because they conflate laptop computers with
desktop computers. These responses also appear to be inconsistent with
each other: in your written testimony, you reference 1,400 laptops,
whereas, in your response to my letter, you reference 1,400 computers
(both laptops and desktops). Please provide the following
clarification:
a. How many of the 1,400 computers referenced in your response
letter and in your written testimony are laptops?
b. How many of the computers referenced in your response to
question 4(a) were found to be unencrypted during the audit conducted
after the July 25, 2011 theft of a laptop from Matthew Doyle's car?
c. How many of the 1,400 computers referenced in your response to
my letter and in your written testimony are desktops?
d. How many of the computers referenced in your response to
question 4(c) were found to be unencrypted during the audit conducted
after the July 25, 2011 theft of a laptop from Matthew Doyle's car?
Answer 4. First, we apologize for any confusion on this issue, but
we trust the following will address your question. Around the time of
the July 25, 2011 laptop theft, Accretive Health had approximately
1,400 laptop and desktop computers in use by its employees. That number
may vary at any point in time. In September 2011, Accretive Health had
approximately 1,627 total computers in service: approximately 1,152
laptops and approximately 475 desktops. The increase from approximately
1,400 computers to approximately 1,627 computers was due to (1)
Accretive Health bringing additional computers into use as a result of
business needs, and (2) an Accretive Health training class for Chicago
Career Tech that started in mid-2011 and resulted in Accretive Health
bringing approximately 80 computers into use. Accretive Health's
policies require encryption of both laptop and desktop computers.
Following the July 25, 2011 laptop theft, Accretive Health
performed a review of its laptop and desktop computers to determine
whether any other company computers were not properly encrypted. This
review revealed that approximately 30 laptops were not properly
encrypted. Following this review, Accretive Health's IT staff loaded or
re-loaded encryption software onto every company laptop and desktop
computer and implemented the redundancies described in response to
question 1.
Question 5. Does Accretive employ any policies or practices to
restrict employees' access to PHI when the employee moves from one
hospital to another or from one set of duties (e.g., QTCC) to another
(e.g., RCM)? If so, please describe those policies and practices and
explain whether and to what extent they were employed in Matthew
Doyle's case.
Answer 5. Yes. Employee access to Accretive Health client hospital
IT systems is typically determined according to the client hospital's
policies and access protocols. In general, an Accretive Health employee
requests access according to these policies and protocols and an
individual designated by the client hospital determines whether to
grant the Accretive Health employee's request. Client hospitals grant
access to Accretive Health employees based on employee job functions
and related business requirements.
Accretive Health also controls access to its own IT systems based
on employee job functions and business requirements, and performs
periodic validations of employee access rights. On a quarterly basis,
IT Support requires Accretive Health Site Leads at both client
hospitals and Accretive Health Shared Services Facilities (for example,
the Kalamazoo call center) to (1) confirm the list of users with access
is accurate, and (2) validate that each user's access is appropriate.
If an employee is determined to have changed roles or moved to a
different site, that employee's access related to the prior role or
site is terminated.
On a monthly basis, Accretive Health Site Leads send a Client
System Terminate List to hospital clients. This list includes the
Accretive Health employees for whom access should have been terminated
during the prior month. The list ensures that access rights to hospital
IT systems are terminated for those Accretive Health employees who no
longer need access.
Accretive Health employees are instructed to regularly review their
electronic files and delete any PHI that is no longer necessary for
their jobs.
The Accretive Health policies described above were in place prior
to the July 25, 2011 laptop theft. As described in Accretive Health's
May 11, 2012 response, the employee responsible for the stolen laptop
had worked at Fairview. While at Fairview, the employee, seeking to
become better acquainted with Accretive Health's QTCC program and
acting within the scope of his access rights, downloaded certain QTCC
data described in the Minnesota attorney general's report. The employee
then transferred to North Memorial and was working at North Memorial at
the time of the theft.
Question 6a. On June 2, 2010, a laptop was stolen from Brandon
Webb's car. On July 25, 2011, an unencrypted laptop containing PHI was
stolen from Matthew Doyle's car. On September 20, 2011, Accretive
issued a notice of the breach to Fairview. On October 12, 2011,
Accretive issued an advisory to employees, instructing them not to
leave laptops in plain view.
Why did Accretive wait until September 20, 2011, to notify Fairview
of the July 25, 2011, data breach?
Answer 6a. Accretive Health notified Fairview's chief financial
officer, general counsel, and vice president of revenue cycle
management of the July 25, 2011 laptop theft 4 days after the theft
occurred, on July 29, 2011. In the days and weeks following the theft,
there was regular and close contact with Fairview about the theft and
the process for addressing the theft. Federal law requires formal
notice of a breach of unsecured PHI within 60 days of the discovery of
the breach. 45 CFR 164.410. Accretive Health's September 20, 2011
written notice to Fairview was the formal notice required by law.
Question 6b. Why did Accretive wait until October 12, 2011, to
advise its employees not to leave laptops in plain view?
Answer 6b. Accretive Health has for years advised its employees as
a part of regular training that laptop computers must be secured. The
October 12, 2011 ``advisory'' referenced in Question 6 was a memorandum
sent to all employees as an additional reminder following the
investigation of the July 25, 2011 theft.
Question 7. Since entering into contracts with the Fairview
Hospital System, how many of Accretive's revenue cycle employees have
had unrestricted access to patients' PHI? For each employee, please
provide the time period for which the employee's access to PHI was
unrestricted and please explain the justification for the employee's
unrestricted access to PHI.
Answer 7. Accretive Health employees do not have unrestricted
access to PHI. As described in response to question 5, Accretive Health
employees' access is limited by Fairview and Accretive Health policies.
In order to perform the contracted services for Fairview, certain
Accretive Health employees required access to Fairview IT systems,
including those containing PHI. Authorization to access Fairview
systems occurred according to Fairview's formal access request and
review process, which Accretive Health understands is the same process
used for all Fairview contractors.
Different Accretive Health employees had access for different
purposes:
Revenue Cycle Employees. Between April 2010 and April 2012,
Accretive Health Revenue Cycle employees performed a wide variety of
tasks for Fairview. These employees--like the more than 1,200 Fairview
employees performing Revenue Cycle functions--required access to
various Fairview IT systems containing PHI, including Fairview's PASS
and EPIC patient accounting systems, Fairview's patient scheduling
system, and Fairview's billing editor system.
Revenue Cycle employees with access to Fairview IT systems are
described below. (The employee numbers reflect the approximate, total
number of Accretive Health Revenue Cycle employees with access to
Fairview IT systems over the term of the parties' Revenue Cycle
Operations Agreement):
Approximately 56 Accretive Health employees worked onsite
at Fairview hospitals. These employees ensured that patients were
registered correctly, determined patient insurance information,
contested and challenged payor denials, assessed options for third
party coverage in the event the patient was not insured, ensured that
insurance claims were accurate and timely, and ensured that the patient
was billed accurately.
Approximately 15 Medicaid Eligibility Hub employees worked
offsite with patients and Minnesota counties to ensure that Medicaid
applications were processed promptly and properly.
Approximately 17 IT and other employees worked on- and
off-site to analyze, implement, and ensure the functionality of
Accretive Health proprietary Revenue Cycle Management tools at Fairview
hospitals.
Approximately 92 Blended Shore Operation employees worked
offsite performing a variety of tasks, including resolving credit
balances, ensuring payment on low-dollar insurance accounts, and
monitoring collections calls for compliance with FDCPA, HIPAA, and
company requirements.
Approximately 18 other employees performed various
functions for Fairview, including following up with third party payors
and loading hospital and payor contracts onto Accretive Health's IT
systems.
Quality and Total Cost of Care Employees. Between April 2010 and
June 2012, approximately 31 Accretive Health QTCC employees required
access to Fairview IT systems containing PHI, including Fairview's EPIC
system, so that they could help Fairview identify and create care plans
for those patients who would benefit most from more integrated and
intensive care.
Physician Advisory Service Employees. Between May 2010 and April
2012, approximately 116 Accretive Health employees worked offsite
performing Medicaid and Medicare compliance consulting services for
Northland and Lakes Hospitals. These employees had access to Fairview
IT systems, including Fairview's EPIC system.
Financial Clearance Center Employees. Between February 2011 and
April 2012, approximately nine Accretive Health FCC employees performed
pre-registration and other functions for Fairview. Like the
approximately 50 Fairview employees performing similar functions, FCC
employees required access to Fairview's EPIC system to ensure that
patients were registered correctly.
Medical Financial Solutions Employees. Between July 2010 and
February 2011, approximately 28 Accretive Health MFS employees
performed pre-collect and dormant collections for Fairview patients.
MFS employees required access to Fairview's PASS, EPIC, and WinCollect
systems. The purpose of access was to enable MFS employees to verify
patient identities and provide patients with requested information,
including the date of service and nature of service received.
As explained in our May 11, 2012 response, for a period of time,
Fairview's PASS system was the only source of information for MFS
employees to answer patient questions about amounts owed. In November
2010, Accretive Health began implementing a software technology tool
that limited employee access to: (1) patient name and contact
information, (2) guarantor (person financially responsible, if not the
patient), (3) date of service, (4) patient type (e.g., emergency room,
outpatient), and (5) an easily understood description of the diagnosis
code. This software tool became fully operational in February 2011,
though approximately 10 employees with managerial responsibilities who
handled escalated patient calls or system operations continued to have
access to Fairview PASS files until early 2012.
Question 8a. During the field hearing, I asked you whether the
scripts that Accretive provided to revenue cycle employees contained a
disclaimer to be provided to patients to inform them that conversations
with revenue cycle employees were optional. You agreed that patients
``should affirmatively be given that information'' and you committed to
review Accretive's scripts to assess whether disclaimers expressly are
provided to patients.
How many versions of scripts has Accretive provided to revenue
cycle employees?
Question 8b. Of the scripts referenced in your response to question
8(a), how many instruct revenue cycle employees to disclaim expressly
to the patient that the conversation is optional?
Question 8c. Of the scripts referenced in your response to question
8(a), how many instruct revenue cycle employees how to overcome
objections from patients?
Question 8d. Will you please provide to my office full copies of
the scripts referenced in your responses to questions 8(a)?
Answer 8a, 8b, 8c, and 8d. For decades, hospitals throughout the
United States have used scripts to assist employees in interacting with
patients. Many of Accretive Health's client hospitals have their own
scripts at the time they contract with Accretive Health.
Accretive Health typically works with each client hospital to
prepare scripts to fit the individual hospital's policies and needs.
Sometimes, Accretive Health and its clients develop scripts based on
Accretive Health templates. Just as often, the client's own pre-
existing scripts are the starting point. On occasion, Accretive Health
or its clients further individualize the scripts over time to account
for changes in the clients' policies or to respond to specific issues
encountered by Revenue Cycle employees when engaging with patients. As
a result, scripts vary from client to client, and also vary over time
for the same client. Accretive Health cannot readily determine how many
versions of scripts its client hospitals have used over the years. All
conversations with patients are at the patient's option and Accretive
Health employees are trained as to their client hospitals' obligations
under EMTALA.
In its May 11, 2012 response, Accretive Health referenced
disclaimer language included in employee scripts used at Fairview. This
language provided as follows:
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
SERVICE WOULD BE DENIED FOR NON-PAYMENT.
Please find attached as Exhibits 1, 2, 3, and 4 to this response
the scripts referenced in Accretive Health's May 11, 2012 response.
As a result of the dialog between your office and Accretive Health
senior vice president Greg Kazarian, including at the May 30, 2012
field hearing, Accretive Health has undertaken the process of reviewing
and standardizing the scripts used by its client hospitals. Although
the scripts will continue to be tailored to clients' specific policies
and needs, all recommended scripts will contain certain common
elements, including an express disclaimer to inform patients that
conversations with Revenue Cycle employees are optional. For example,
Accretive Health has drafted the following:
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
SERVICE WOULD BE DENIED FOR NON-PAYMENT. THE ROLE OF THESE
CONVERSATIONS WITH PATIENTS IS TO HELP THEM FIND A WAY TO
RESOLVE THEIR CONTRACTUAL OBLIGATIONS WITH THE HOSPITAL WHEN
POSSIBLE, BUT MORE IMPORTANTLY TO EDUCATE THEM ABOUT THESE
RESPONSIBILITIES. THE INFORMATION BELOW IS TO BE UNDERSTOOD
ONLY IN THAT CONTEXT.
SPECIFIC GUIDELINES FOR PATIENT INTERACTIONS:
IN THE EMERGENCY ROOM AND IN LABOR AND DELIVERY,
EVERY PATIENT MUST BE SEEN IN COMPLIANCE WITH THE REQUIREMENTS
OF THE EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT, 42 USC
SECTION 1395DD. ACCORDINGLY, NO CONVERSATION WITH A PATIENT
ABOUT INSURANCE OR ABILITY TO PAY SHALL OCCUR UNTIL AFTER THE
PATIENT HAS HAD A MEDICAL SCREENING EXAM AND ANY NECESSARY
STABILIZING TREATMENT.
ABSOLUTELY NO INPATIENT OR EMERGENCY ROOM PATIENT
SHALL BE APPROACHED TO COLLECT PAYMENT FOR A RESIDUAL OR PRIOR
BALANCE UNTIL AN APPROPRIATE CLINICIAN HAS (1) SEEN THE
PATIENT; (2) EVALUATED THE PATIENT'S CONDITION; (3) CLEARED THE
PATIENT FOR CONTACT WITH A REVENUE CYCLE EMPLOYEE; AND (4)
IDENTIFIED A MEDICALLY APPROPRIATE TIME FOR THE REVENUE CYCLE
EMPLOYEE TO CONTACT THE PATIENT.
REMEMBER THAT OUR MISSION IS TO ASSIST PATIENTS,
WHICH REQUIRES EMPATHY FOR EVERY PATIENT'S MEDICAL CONDITION AS
WELL AS HIS OR HER FINANCIAL CONDITION. OUR MISSION IS
FULFILLED ONLY BY TREATING EVERY PATIENT IN EVERY SITUATION
WITH COMPASSION, DIGNITY, RESPECT, AND PROFESSIONALISM.
REMEMBER THAT EVERY PATIENT CONVERSATION IS
OPTIONAL. PATIENTS ALWAYS HAVE THE RIGHT TO DECLINE TO SPEAK
WITH REVENUE CYCLE EMPLOYEES ABOUT THEIR FINANCIAL OBLIGATIONS.
EVERY PATIENT MUST BE INFORMED OF THAT RIGHT AT THE BEGINNING
OF EVERY CONVERSATION. IF A PATIENT SAYS THAT HE OR SHE DOES
NOT WANT TO HAVE THE CONVERSATION, THE REVENUE CYCLE EMPLOYEE
MUST THANK THE PATIENT FOR HIS OR HER TIME AND IMMEDIATELY END
THE CONVERSATION. THE FOLLOWING SCRIPT SHOULD BE USED TO START
EVERY CONVERSATION TO ENSURE THAT EVERY PATIENT UNDERSTANDS
THAT CONVERSATIONS WITH REVENUE CYCLE EMPLOYEES ARE OPTIONAL:
Mr./Ms.______, my name is______. I am not a clinician. My job
is to educate you about any medical benefits that may be
available to cover the cost of your care as well as your
personal responsibility for your treatment costs.
You do not have to speak with me. Having a conversation with
me about your financial obligations for your care is entirely
optional. Whether you choose to speak with me or not will have
no impact on the care you receive.
Are you willing to speak with me?
(STOP! DO NOT SAY ANYTHING MORE UNTIL PATIENT RESPONDS)
If the patient says ``no,'' thank the patient for his or her
time and end the conversation.
If the patient says ``yes,'' ask the patient: ``Are you
comfortable speaking with me now?''
If the patient says ``no,'' thank the patient and indicate
that you will find another time to speak with him or her.
Only if the patient says ``yes,'' may you proceed with the
conversation.
Accretive Health welcomes any suggestions that you may have
concerning this draft language.
Question 9a. The attorney general alleges that Accretive sometimes
overcharged patients for the predicted cost of a service and then
delayed in issuing refunds to patients. During the field hearing, I
asked you about an Accretive patient registration handbook, which
instructed employees not to inform patients if they had credits on
their accounts. You said all refunds should be remitted to the patients
within 30 days.
How does Accretive predict the patient's out-of-pocket cost for a
service? In responding to this question, please list all factors that
are considered in making this determination.
Answer 9a. As an initial matter, the ``patient registration
handbook'' titled ``Registration--Handbook for Prior Balance
Collections'' does not instruct employees to remain silent about
credits. Rather, the handbook provides instructions on when a Revenue
Cycle employee should ask a patient about a prior balance during
registration. The document instructs:
If a prior balance exists, the patient hasn't been contacted
by hospital staff in the last 30 days, and there are no current
payment plans or credit balances then ASK!
But if the patient has a credit balance, the document instructs:
Don't ask [about the prior balance], and note on the account.
Additionally, this document was not used or prepared for Fairview.
Under Fairview policy, a refund was not generated until both the PASS
and EPIC systems were reviewed for outstanding patient balances and
appropriate distribution decisions were made in accordance with
Fairview's financial policies.
To clarify any misconceptions, Accretive Health understands that
Fairview endeavored to resolve (either by distributing or refunding)
self-pay credits within 30 days of the last insurance remit date.
Accretive Health worked to help Fairview achieve this goal when
possible. As set forth below, Accretive Health helped improve
Fairview's ability to issue prompt and correct refunds.
To the extent possible, and in advance of non-emergency treatment,
Fairview patients were provided with estimates of their share of the
treatment cost so as to avoid confusion or surprise later. This
practice is both common and consistent with the ``recommended
practices'' advocated by the Healthcare Financial Management
Association.
Through the use of Accretive Health's software tools, diagnostic
codes, including the American Medical Association's Current Procedural
Terminology (``CPT'') Codes, and hospital pricing information, Revenue
Cycle employees could generate reasonable estimates of the cost of care
in advance of service. Generally, estimates would also reflect
consideration of patient insurance benefits (e.g., any deductible owed
by the patient, co-payments, and coinsurance). If official prices were
unavailable or historical average prices could not be determined, an
estimate would not be generated.
Fairview's credit management and financial policies and procedures
dictated how Fairview handled patient credits. At the time of
Fairview's partnership with Accretive Health, Fairview hospitals and
clinics had a significant backlog of credits owed to self-pay patients.
Accretive Health implemented initiatives consistent with Fairview's
policies and in collaboration with Fairview management to help Fairview
resolve this backlog. With the use of Accretive Health's tools, during
the period from November 2010 to February 2012, Fairview decreased the
number of refunds owed by approximately 60 percent.
Question 9b. With respect to Accretive's operations at the Fairview
system, how often are refunds issued within 30 days?
Question 9c. With respect to Accretive's operations at the Fairview
system, what are the mean and median wait times for a refund to be
issued?
Question 9d. With respect to Accretive's operations at the Fairview
system, what are the mean and median amounts of such refunds?
Answer 9b, 9c, and 9d. Fairview at all times retained primary
responsibility for processing and paying refunds. As a result of the
termination of Accretive Health's Revenue Cycle services to Fairview,
Accretive Health no longer has access to detailed data concerning
refunds paid to Fairview patients and therefore cannot provide detailed
responses to questions 9(b), (c), and (d). However, in early 2012,
Fairview's board of directors requested that Accretive Health compile
certain information concerning refunds. From this information,
Accretive Health can report that, from approximately October 2010
through April 2012, Accretive Health reviewed 30,576 credit accounts in
the PASS system and resolved 27,842 (with a value of $3.49 million),
reviewed 10,978 credit accounts in the EPIC HB system and resolved
10,169 (with a value of $802,000), and reviewed 317,821 credit accounts
in the EPIC PB system and resolved 310,602 (with a value of $9.16
million). In other words, Accretive Health assisted Fairview in
resolving more than $13.4 million in outstanding credit balances.
Question 10. In your written testimony, you wrote that the attorney
general's ``allegations are, more often than not, founded on
mischaracterizations of Accretive Health documents and misstatements of
significant facts.'' Insofar as Accretive believes that the attorney
general provided only excerpts of documents when the complete document
is needed for accurate context, please provide my office with the
complete document at issue.
Answer 10. Below, we provide several examples of instances in which
the Minnesota attorney general's allegations are founded upon
mischaracterizations of Accretive Health documents:
The attorney general cites an Accretive Health e-mail
stating that ``Fairview line staff has expressed concerns regarding
collecting patient share at the time of registration . . . the impact
has been most felt at the Fairview management level--there have been
some emotional responses.'' (Volt. 2, p. 19.) However, the attorney
general's use of ellipses mischaracterizes the document. The ``anger''
and ``emotional responses'' from Fairview line staff being reported in
the e-mail were directed against the attorney general's office as a
result of the January 2012 lawsuit, not against Accretive Health.
(Volt. 2, Ex. 93.) In fact, the e-mail states that ``[s]everal of the
Fairview line staff teams have met since the [Attorney General's]
complaint was announced. Some of the teams have expressed anger at the
AG['s] office because the complaint seemed off base.'' A complete copy
of this e-mail chain is attached to this response as Exhibit 5.
The attorney general makes reference to a December 2011
``incident'' at the University of Minnesota Amplatz emergency room
during which the treatment of a child was allegedly delayed while a
financial counselor met with the child's parents. (Volt. 2, PP. 16-17.)
However, the attorney general mischaracterizes this event. According to
the documents, the child's father proactively requested to meet with
the counselor to discuss his family's financial situation and the cost
of care. Following the meeting, the father expressed his appreciation
that Accretive Health was able to assist his family.
The attorney general references the employee scripts used
by Revenue Cycle employees at Fairview and states that ``[t]he scripts
can lead a patient or her family to believe that the patient will not
receive treatment until payment is made.'' (Volt. 2, PP. 13-14.) In
support of this statement, the attorney general attaches to her report
selected pages from two versions of a script in use at Fairview, one
version in use shortly after Accretive Health began working with
Fairview and a later version containing revisions by Accretive Health
and Fairview. The first page of the later version of the script, which
the attorney general did not attach to her report, includes a
disclaimer, in red, capitalized, bolded language stating that:
PLEASE READ: NOT ONLY ARE PATIENTS NEVER TO BE DENIED SERVICE
FOR NON-PAYMENT, THEY ARE NEVER TO BE GIVEN THE IMPRESSION THAT
SERVICE WOULD BE DENIED FOR NON-PAYMENT.
A complete copy of this document is attached to this response as
Exhibit 6.
The attorney general states that Accretive Health offered
prizes to Revenue Cycle employees in violation of Fairview policy, and
that one Fairview employee complained that the prizes were a ``slap in
the face.'' (Volt. 2, PP. 11-12.) This is a mischaracterization of both
the underlying facts and the cited document. Prior to Accretive
Health's partnership with Fairview, Fairview policy permitted gift
cards as a form of employee recognition. In November 2010, a Fairview
employee sent an e-mail discussing a year-end gift card incentive
program to increase point-of-service collections. The author of the e-
mail suggested that an employee could receive between $130 and $280 per
month by meeting certain goals. Dan Fromm, Fairview's chief financial
officer, responded that the program ``violates corporate policy''
because it potentially exceeded Fairview's limits on monetary gifts.
Following meetings with Fromm and other Fairview employees, the program
was implemented consistent with Fairview policy at the University of
Minnesota Medical Center for the last few weeks of 2010. The program
continued for 1 month and was then replaced by incentive programs using
solely non-monetary incentives. One employee, apparently irritated by
the termination of monetary incentives, stated to an Accretive Health
employee that the new, non-monetary incentives were ``a slap in the
face'' and that employees ``were annoyed by the abrupt change between
the gift card program and this [non-monetary] one.'' A copy of an e-
mail reflecting the Fairview employee's complaint is attached to this
response as Exhibit 7.
The attorney general cites an e-mail in which an Accretive
Health employee purportedly dismissed Fairview doctors' concerns about
point-of-service collections as ``country club'' talk. (Volt. 2, p.
15.) However, the attorney general does not cite the full e-mail and
thereby mischaracterizes the substance of the document. The non-cited
portion of the e-mail identifies steps Accretive Health could take to
address any doctors' concerns, including providing information on the
point-of-service collections process and meeting with Fairview
representatives. A copy of this e-mail is attached to this response as
Exhibit 8.
The attorney general claims that Accretive Health prepared
and distributed to Fairview a sample script that violated the AG
Agreement by instructing collectors to condition discounts for
uninsured patients on same-day payment. (Volt. 3, PP. 6-7; Ex. 7.)
However, the script the attorney general cites was not used at
Fairview, as is evident from the absence of a Fairview header on the
script. The script therefore does not provide support for the attorney
general's allegation that Accretive Health directed Revenue Cycle
employees at Fairview to condition uninsured discounts on same-day
payment.
Question 11a. During the field hearing, I asked about Exhibit 37 to
Volume 5 of the attorney general's report, an e-mail from a Revenue
Cycle employee describing patients as ``dead beats'' and ``plebeians,''
among other things. You agreed that the e-mail was unacceptable, though
you noted that you were ``somewhat comforted'' because ``the employee
who received the e-mail was--you could tell by the response--was
somewhat taken aback'' and that you ``could see in the tone [that he]
didn't want to engage in the exchange.''
Please provide my office with the full e-mail chain, redacted as
appropriate, from which you can discern the recipient's tone and can
tell that the recipient was taken aback.
Question 11b. The e-mail at the top of Exhibit 38 to Volume 5 of
the attorney general's report describes a patient as a ``low life.''
What is the relationship, if any, between this e-mail and the e-mail
contained in Exhibit 37 to Volume 5? In responding, please note whether
these e-mails were written by the same or different employees, and
please describe the nature and extent of the PHI to which the authors
of the e-mails had access.
Answer 11a and 11b. Exhibits 37 and 38 to Volume 5 of the Minnesota
attorney general's report were both written by the same Accretive
Health employee, a patient financial counselor in Accretive Health's
Kalamazoo call center. This employee was terminated within 24 hours
after these e-mails were brought to the attention of Accretive Health
management.
In his oral testimony at the May 30, 2012 Field Hearing, Mr.
Kazarian's suggested that the recipient of the referenced e-mail was
``taken aback'' by the e-mail. Mr. Kazarian meant to refer to the
response of the employee who authored the e-mail when that employee
received his notice of termination. During his termination meeting, the
employee expressed surprise and explained that he had intended the e-
mails as a joke. Nonetheless, company management concluded that the e-
mails constituted improper conduct and, therefore, grounds for
dismissal.
Question 12a. During the field hearing, the attorney general
alleged that Accretive had failed to enter into a Business Associate
Agreement (BAA) with North Memorial Hospital and that Accretive
manufactured and backdated a BAA once this omission came to light.
After the hearing, Accretive issued a statement which, among other
things, said:
The parties believed they executed a BAA prior to or at the
time services commenced and, in accord with ordinary and
customary practice, acted at all times consistent with the
terms of the BAA, meeting all the requirements of HIPAA and
HITECH. In October 2011, the parties could not locate the
executed copy of the BAA. Accordingly, a replacement BAA was
signed in October 2011.''
Who executed the BAA for Accretive ``prior to or at the time
services commenced?''
Answer 12a. Etienne H. Deffarges, Accretive Health's executive vice
president, believes he executed the North Memorial Business Associate
Agreement.
Question 12b. Were both parties--Accretive and North Memorial
Hospital--provided with copies of the originally executed BAA? If so,
is it Accretive's position that both parties subsequently and
independently misplaced the BAA?
Answer 12b. From November 2008 to early 2009, Accretive Health and
North Memorial undertook an initial assessment in anticipation of
executing a Revenue Cycle contract. In connection with these
discussions, Accretive Health believes the Business Associate Agreement
(``BAA'') was executed by Mr. Deffarges. Accretive Health believes that
it returned the executed BAA to North Memorial and understands that
North Memorial believes that it executed the BAA as well.
The Revenue Cycle contract between Accretive Health and North
Memorial ultimately was not completed until March 21, 2011. In early
March 2011, in connection with finalizing that agreement, a draft BAA
was prepared. Because the parties believed that a BAA had already been
executed in connection with the 2008/2009 initial assessment, it does
not appear that the March 2011 draft BAA draft was executed. From March
21, 2011 onward, however, both Accretive Health and North Memorial
acted at all times consistent with the terms of the BAA.
In October 2011, Accretive Health was contacted by North Memorial,
asking for a copy of the executed BAA, which they stated that they too
could not locate in their files. Upon a diligent search, Accretive
Health also could not locate an executed copy of the BAA. As a result,
another BAA was executed in October 2011. The October 2011 BAA was not
backdated, but instead identified an ``effective date'' of March 21,
2011 to accurately reflect the period of time during which Revenue
Cycle services, consistent with the terms of the BAA, had been provided
by Accretive Health to North Memorial.
[Editor's Note: Due to the confidential and proprietary nature of
the exhibits they will be maintained in the committee's files.]
jean ross
Question 1. During the field hearing, you testified that patients
should not be approached about payments when they are in the hospital,
receiving medical treatment. Why is this?
Answer 1. Patients come into the hospital for treatment. Whether
planned or emergent, we teach them to try putting aside other concerns
such as family issues and finances so they can concentrate on
recovering and healing. This is difficult enough for most people to do
when they are healthy, let alone when they are hurting.
If they are fortunate enough to be in a good, supportive family and
also be financially sound, they don't need a new worry placed in front
of them, intruding on their thoughts. For those in less than ideal
situations, another reminder of their situation isn't conducive to
healing.
They may already know they will have a great deal of trouble paying
their bill later. It's less than helpful for them to wonder if they
need to find a way to come up with the money now, especially if there
is an assumption of no care or lesser care if one can't pay. A non-
professional approaching a patient without regard to that person's
diagnosis can also be dangerous, not just to the patient but also to
that individual. For example, it might not be advisable to approach
many patients who have certain mental health conditions and request
payment at the time of a crisis.
Question 2. In your many years as a nurse, what measures did you
take to protect patients' personal health information?
Answer 2. In the years before electronic health records (EHR) the
paper chart was kept in the desk area, away from all patients and
visitors. Only staff directly caring for the patient was allowed to
view it. The same is true now with the EHR.
Any admitting, discharging or teaching of a patient or family
member is done confidentially to safeguard the patient's privacy. This
includes discussions about the diagnosis and prognosis. Unless a
patient leaves written permission a nurse is not allowed to speak with
family or others about the patient's condition.
No paperwork with any identifying information can be left for
others to possibly see. All nurses must log out before leaving a screen
open to a patient's computerized chart. We are not allowed to write the
patient's full name on the grease board in the patient's room. Any
public listing of patients must be done by initials only.
michele goodwin
Question 1. The Federal Debt Collection Practices Act's (FDCPA)
prohibition on abusive practices does not cover collections for debts
that are not ``in default.'' Do you believe that this aspect of the law
should be changed, and, if so, how?
Answer 1. Yes, the Federal Debt Collection Practices Act (FDCPA)
should be amended or changed to address loopholes. Specifically, the
FDCPA currently does not cover collections of debts not in default.
Largely, this appears to be an oversight, particularly as the spirit of
the law is intended to prohibit abusive debt collection practices. That
a debt is not in default should not provide a loophole for debt
collectors to engage in practices deemed abusive, coercive,
exploitative, humiliating or embarrassing to consumers. It is
particularly shocking that egregious debt collection practices are now
a party of general payment practices at hospitals. In effect, paying a
hospital medical bill can mean exposing oneself to threatening behavior
or the denial of medical treatment. The FDCPA is intended to protect
consumers, particularly when they are at their most vulnerable and this
includes when a consumer has endured extreme financial difficulties.
Importantly, the FDCPA is a law that speaks to principled corporate
behavior. That a debt has not lapsed into default should not privilege
debt collection agencies and the organizations that hire them to
circumvent the spirit and intent of the law. We should be mindful that
the law is a protection for all consumers. The law does not make a
distinction between different categories of consumers based on wealth,
income or debt status.
Given the significance of the most recent economic turn down,
Members of Congress must be sensitive to the economic challenges and
hardships experienced by hardworking Americans who have lost their jobs
and homes and now find it difficult to pay their bills. These men and
women deserve the same protections as consumers who are not in default.
Proposed change:
1. Amend the FDCPA by including language that extends consumer
protections to individuals not in default.
2. Extend the statute of limitations for consumers to file suit to
2 years (rather than the current 1 year).
3. Impose fines against debt collection agencies that violate this
provision.
Question 2. Debt collectors are not allowed to have access to more
personal health information than is absolutely necessary for them to
perform their jobs. In your view, what personal health information
would a debt collector need to collect a medical debt?
Answer 2. In my opinion, debt collection agencies do not need
personal health information to collect consumer debts. At present, many
debt collection organizations gain access to a very broad set of
consumer information, including: mailing addresses, phone numbers, e-
mail addresses (if the consumer has an e-mail account), and social
security information. Often, debt collection organizations also have
access to employer information as well. This type of information is
extensive and highly sensitive. There is no rational reason for
providing personal medical information to debt collectors. This applies
to medical debt collection as well. For example, there is no need for a
debt collector to know that a patient is HIV positive or suffered a
miscarriage. Possessing medical information is not rationally related
to medical debt collection. Personal medical information is irrelevant
to the successful collection of debts. Moreover, placing this type of
information in the hands of debt collectors would severely undercut
patient privacy interests, and Federal law including HIPAA.
Question 3. Under what circumstances is it appropriate for non-
profit hospitals to contract with for-profit companies?
Answer 3. Increasingly, not-for profit hospitals are collaborating
with for-profit entities. Not all of this is bad or should be
prohibited. For example, a non-profit hospital may contract out food
services. This might be understandable to better manage hospital costs
and hopefully pass along savings to consumers. That said, Members of
Congress should be cautious about charitable hospitals using for-profit
debt collection agencies to collect debt. In all things, non-profit
hospitals must be mindful of their charitable mission and the spirit of
laws that provide a very unique tax status for their organizations. The
test should be: is the use of the for-profit entity in the patients'
best interest? If the use of the contractor in question does not serve
in the patients' best interests, the services should not be used.
jessica l. curtis, j.d.
Question 1. What criteria should hospitals use to evaluate the
performance of revenue cycle employees?
Answer 1. The Hospital Accountability Project at Community Catalyst
does not focus on hospitals' internal management of revenue cycle
employees. We work primarily on strengthening public policy and
supporting community initiatives to address local hospitals' harmful
billing and collections practices. Our response is limited to what we
have observed in the course of those efforts.
From a patient's perspective, receiving the right information--at
the appropriate time--about a payment obligation and resources
available to help defray the costs of care can be critical to meeting
their payment responsibilities. There is much hospitals can do to make
this an easier process for patients. While revenue cycle employees play
a critical role in getting this information to patients in a timely,
respectful manner, it is important to remember that employee evaluation
is just one method of incentivizing staff to create a patient-friendly
billing experience. The hospital's mission, overall culture, and
leadership's commitment to creating an environment and protocols for
treating patients fairly throughout the billing process are also key.
We suggest the following as steps hospitals should take to
appropriately motivate and evaluate staff, including revenue cycle
employees, who assist patients who may have difficulty paying for out-
of-pocket expenses. We note that hospitals that outsource portions of
the patient billing and revenue cycle to third parties add an
additional layer of complexity to the mix. They should take appropriate
steps during the initial contracting phase and throughout the duration
of the business relationships to ensure that third parties adhere to
the same policies and practices the hospital has adopted.\1\
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\1\ Compliance guidance for third-party medical billing companies
may be a useful model. See, e.g., Office of Inspector General, U.S.
Department of Health & Human Services, Compliance Program Guidance for
Third-Party Medical Billing Companies, 63 Fed. Reg. 70,138 (Dec. 18,
1998). Available at http://oig.hhs.gov/fraud/docs/complianceguidance/
thirdparty.pdf.
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Leadership sets the tone. Achieving the best results for patients
starts with the hospital's leadership and governing board.\2\ Revenue
cycle employees will take their cue from senior managers and hospital
leadership, who should view access to health care and community health
improvement as critical objectives for their organizations. The
hospital's governing body should approve and routinely review
compliance with key policies related to hospital financial assistance,
billing and collection. Senior managers and executive leadership should
take steps to clearly communicate--internally with revenue cycle staff
and externally with community stakeholders and relevant third-party
agents--their commitment to fair, clear, and transparent billing and
collection policies. This includes devoting sufficient internal
resources to revenue cycle staff education, infrastructure and support
systems, and performance evaluation to ensure that employee practices
align with the hospital's policies and legal requirements.
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\2\ See Curtis, J. and Trocchio, J. ``Community Benefit: Hallmarks
for Assessing a Solid Program,'' Health Progress: Journal of the
Catholic Health Association of the United States, PP. 64-65, May-June
2012. Available at http://www.chausa.org.
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Even best-intentioned policies and protocols will fall short
without regular staff education. Many of our State and local partners
working on hospital billing and collections issues have observed that
they routinely encounter frontline hospital employees who, unfamiliar
with their own hospital's billing and financial assistance policies,
fail to direct patients seeking more information to the appropriate
staff. Furthermore, not all revenue cycle employees appear to have the
appropriate training and expertise needed to help uninsured and
underinsured patients navigate the complicated maze of private health
insurance, public coverage programs, and financial assistance that
routinely, if unintentionally, create roadblocks for patients. To
counter this, hospitals should provide regular in-service trainings and
continuing education opportunities on these topics for revenue cycle
staff. All hospital staff should also have a basic familiarity with the
hospital's financial assistance policies and related legal
requirements, and be able to direct patients to the appropriate staff
for more information.
Build infrastructure, support, and evaluation tools that
incentivize employees to implement patient-friendly billing and
collections policies. Many hospitals have invested in tools and
resources designed to help their revenue cycle teams function
effectively, with metrics aimed at helping revenue cycle employees hit
key financial targets related to patient collections. Hospitals could
expand these metrics to also audit and monitor employees for the
consistency and accuracy with which they provide timely information
about financial assistance or public coverage programs, such as
eligibility criteria and how to apply; assist patients in completing
applications for financial assistance or other forms of coverage;
comply with State and Federal requirements and the hospital's
established protocols for patient-friendly billing, particularly for
patients who may be unable to pay for care; maintain appropriate tone
and accuracy in verbal communications with patients or their
representatives; and contribute to an overall reduction in the
percentage of patients whose accounts are written off as ``bad debt''
though they are eligible for financial assistance or other coverage.
Involve patients and employees in discussions about ways to improve
the revenue cycle. Patients are at the heart of the revenue cycle
process, and forward-thinking hospitals will strive to make their
experience of the revenue cycle as pleasant as possible. Hospitals
could use feedback loops such as employee focus groups and patient
satisfaction surveys to evaluate how effectively revenue cycle
employees are communicating with patients--particularly those who
appear to be uninsured or underinsured--about their out-of-pocket
balances, financial assistance and payment plans, other potential forms
of coverage and other issues that can help patients avoid falling
behind on bills.\3\ Hospitals could go even further and structure
internal review processes that incorporate input from employees,
patients, community leaders, advocates and others to identify areas
where their current billing and collections process or policies need to
be revised (e.g., Are billing statements unclear? Is information
available in languages appropriate to the hospital's community? Are
financial assistance applications too onerous or hard for patients to
understand? Are collections activities authorized by the hospital's
board appropriate?).
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\3\ See ``Strategies for a High Performance Revenue Cycle,''
Healthcare Financial Management Association, PP. 20-7. Accessed June
18, 2012 at http://www.hfma.org/HFMA-Initiatives/Patient-Friendly
Billing/Strategies-for-High-Performance-Revenue-Cycle/Strategies-for-a-
High-Performance-Revenue-Cycle--About-the-Report/. The committee may
also wish to review the recommendations of the PATIENT FRIENDLY
BILLING Project, a collaborative endeavor organized by the Healthcare
Financial Management Association (HFMA). Designed to help health care
administrators and finance teams run efficient but patient-friendly
billing operations, the Project includes guiding principles, case
examples, and practical tips for hospital revenue cycle programs
seeking to treat their patients fairly, fulfill their missions, and
maintain financially viable health care institutions. ``PATIENT
FRIENDLY BILLING Project,'' Healthcare Financial Management
Association. Accessed June 18, 2012 at http://www.hfma.org/HFMA-
Initiatives/Patient-Friendly-Billing/Patient-Friendly-Billing/.
Question 2. Do you have any recommendations about the content of
scripts that are provided to revenue cycle employees? If so, what are
they?
Answer 2. Community Catalyst has not developed model scripts for
revenue cycle employees. However, our work in the States has repeatedly
shown that front-line hospital employees play a key role in informing
patients about their financial obligations, options, and available
financial help at the right time and the right place. \4\
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\4\ By way of a negative example, in a random national survey of 99
non-profit hospitals, researchers found that under one-quarter (23) of
hospital staff contacted by phone provided an application for financial
assistance upon request; and fewer than one-third (26) of hospitals
contacted by phone were able to offer financial assistance information
in languages other than English. C. Pryor, et al. Best-Kept Secrets:
Are Non-Profit Hospitals Informing Patients About Charity Care
Programs?, The Access Project and Community Catalyst, May 2010. See
also, e.g., Ames Alexander, Karen Garloch & Joseph Neff, Prognosis:
Profits, Charlotte Observer and Raleigh News & Observer, April 22-6,
2012; Nina Bernstein, Hospital Flout Charity Aid Law, New York Times,
February 12, 2012. By contrast, Massachusetts hospitals played a
pivotal role in helping patients enroll for newly available coverage
during State health reform. See S. Dorn, et al., The Secrets of
Massachusetts' Success: Why 97 Percent of State Residents Have Health
Coverage, State Health Access Reform Evaluation, November 2009.
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We believe the following recommendations will help patients avoid
unnecessary delays in care and medical debt.\5\ Implemented fully, they
may also help hospitals be better stewards of limited dollars by
streamlining the billing and collections process, helping hospitals do
a better job of connecting eligible patients with other coverage
programs (such as State Medicaid, the Children's Health Insurance
Program [CHIP], or other indigent care funding) that may partially or
fully pay for care they have rendered.
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\5\ For a full list of recommendations, please see Community
Catalyst, ``Patient Financial Assistance Act,'' available at http://
www.communitycatalyst.org/doc_store/publications/model
_act_and_guide_may04.pdf.
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General recommendations are as follows:
1. At a minimum, hospitals will want to ensure that revenue cycle
employees' scripts comply fully with all legal requirements as well as
the hospital's own policies.\6\ Hospitals have to meet State and
Federal legal requirements--as well as local ordinances, in some
cases--for informing patients about financial obligations and notifying
them about financial assistance and other programs.
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\6\ For example, Section 9007 of the Affordable Care Act requires
hospitals with Federal tax exempt status to have a written financial
assistance policy that specifies eligibility criteria, application
procedures, the basis on which patients are charged, billing and
collections procedures (unless the hospital has a separate policy), and
steps the hospital will take to make the policy known to the community.
Many States require hospitals to notify patients that financial
assistance is available. See Community Catalyst, ``Free Care Compendium
National Snapshot: Mandatory Notification States,'' for a summary of
State laws on notification (last updated December 2010).
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2. Scripts, as well as related materials such as billing statements
and application forms for hospital financial assistance, should be
written in simple, easy-to-understand language.
3. Patients should have verbal and written access to billing,
collections and financial assistance information in the appropriate
languages.
4. Timing and context matter. Hospitals need to observe EMTALA
requirements when discussing payment with patients. But they should
also take proactive steps to inform patients and the communities they
serve about financial assistance. Hospitals should post their policies
through signs, Web sites, newspapers and social services agencies in
languages that are appropriate to the communities they serve; routinely
train staff members and personnel about financial assistance, billing
and debt collection policies (as discussed above); and give all
patients information about financial help prior to their discharge from
the hospital, in compliance with EMTALA requirements.
In addition, revenue cycle employees should be prepared to discuss
the following with patients (note that, in the absence of Federal
standards, the implementation of these recommendations will likely vary
based on hospital-established policies and State laws):
Patient rights and responsibilities. Revenue cycle
employees should advise patients of their rights to apply for financial
assistance, receive a determination of eligibility in a reasonable
timeframe, and file grievances pursuant to the hospital's internal
appeals process. Patients should be advised of their responsibilities
to cooperate in providing information necessary to make a determination
of financial assistance and/or other forms of coverage.
Eligibility for the hospital's financial assistance
program. All patients should be asked whether they require financial
help paying for the hospital bill. Revenue cycle employees--including
any third-party agents engaged by the hospital--should notify patients
about the hospital's financial assistance policies in every collection
action, including pre-admission or pre-treatment conversations, billing
statements, letters and e-mails, telephone and in-person contacts and
any other activity related to collecting a hospital bill.
Eligibility for public programs. Any patient who requests
financial assistance or is otherwise determined to be uninsured,
underinsured, or unable to pay any portion of their out-of-pocket costs
should be screened for eligibility in public coverage programs, such as
Medicaid, SCHIP or other public programs. Scripts should include
prompts to help assist patients in applying for these programs.\7\
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\7\ Importantly, a patient's failure to apply for public coverage
should not be a bar to considering them for hospital financial
assistance. In some instances, patients are already aware that they do
not qualify for programs like Medicaid. Making them jump through hoops
is at best an unnecessary administrative burden and at worst a delay
tactic that could deter patients from applying for financial
assistance.
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Application procedures. Staff should inform patients of
the relevant application periods, documentation requirements, and
timelines they can expect to receive a determination of eligibility for
financial assistance and public programs. The process and documentation
requirements should be limited to what is absolutely necessary for
determining eligibility, and should not be unduly burdensome.\8\
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\8\ Lack of official documentation should not preclude patients
from being considered for financial assistance. For example, patients
could sign an affidavit attesting the information is accurate.
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Clarify no denial of care. Staff should make clear to
patients that there will be no denial or delay of care while
applications for financial assistance are pending.
Reasonable payment plans. For some patients, payment plans
are an effective way to pay down a hospital debt. However, discussions
about payment plans should take place only after the patient is
determined to be ineligible for financial assistance, medical hardship
or other forms of coverage. The terms of the payment plan should be
keyed to the patient's ability to pay, rather than the size of the
outstanding balance, and the terms of any payment plan should be
reasonable in light of the patient's income and other financial
obligations.
Billing and collections actions. Staff should advise
patients about the steps they may take to collect on a bill, in keeping
with the hospital's billing and collections policies.