```

[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 
                                Pensions
                                
                                
                                
                                
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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

                              ----------                              

                               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?

                              ----------                              

                        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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \22\ Compliance Review at Volt. 4 PP. 7-8.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
     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.
---------------------------------------------------------------------------
    \25\ Compliance Review at Volt. 2, p. 16.
---------------------------------------------------------------------------
     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.
---------------------------------------------------------------------------
     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.
---------------------------------------------------------------------------
     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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \5\ Id.
    \6\ Id.
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
           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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\;
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
     Failing to notify patients of the availability of these 
programs, and even denying that they offer free care \29\;
---------------------------------------------------------------------------
    \29\ Id.
---------------------------------------------------------------------------
     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\;
---------------------------------------------------------------------------
    \30\ Jessica Silver-Greenberg, Debt Collector Faulted for Tough 
Tactics at Hospitals, New York Times, April 24, 2012.
---------------------------------------------------------------------------
     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
---------------------------------------------------------------------------
    \31\ Brian Grow and Robert Berner, Fresh Pain for the Uninsured, 
Business Week, November 21, 2007.
---------------------------------------------------------------------------
     Overcharging the un- and underinsured for care.\32\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \36\ Pursuant to a binding agreement between the Minnesota attorney 
general and the Minnesota Hospital Association.
    \37\ Calif. Health & Safety Code  127425(f).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
                               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.

                                   
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