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Initial complaint filed by Minnesota Attorney General against Accretive Health

Initial complaint filed by Minnesota Attorney General against Accretive Health

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Published by Matthew Keys

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Published by: Matthew Keys on Apr 30, 2012
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04/30/2012

 
lTlug
vl1si,
V.
Accretive
Health,Inc.,
UNITED
STATES
DISTRICT
COURTDISTRICT
OF
MINNESOTA
State
of
Minnesota,
by
its
Attorney
General
Lori
Swanson.
Civil
File
No.
Plaintiff,
f-
f.ic-'
;-l
_-
i-'
r
COMPLAINT
i-,,:'
!."
Defendant.
The
State
of
Minnesota,
by
its
Attorney
General
Lori
Swanson,
bringsthis
action
againstDefendant
AccretiveHealth,
Inc.
("Accretive"
or
,,AccretiveHealth,,)
for
violations
of
the
Health
Insurance
Portability
and
Accountability
Act
of
1996
("HIPAA"),
Pub'
L'
No.
104-lgl,l10
Stat.
1936,as
amended
by
the
HealthInformation
Technology
for
Economicand
clinical
Health(,,HITECH,,)
Act,
pub.
L.
No.
1l_5,
123
stat'
226,
and
Department
of
Health
and
Human
Services
Regulationsat
45
c.F.R.
$
160
et
seq.;
the
Minnesota
Health
Records
Act,
Minn.stat.
s
l44.2glet
seq.;
Minnesota'sdebtcollection
statutes,
Minn.
Stat.
ch.
332;
and
Minnesota,s
consumer
protection
laws,
Minn.
stat.$$
325D.43
et
seq,
&
325F.6g
et
seq.,
as
follows:
INTRODUCTION
I
'
Accretive
is
aportfolio
company
of
the
New
york
private
equity
fundAccretive,
LLC,
which
has
a
controversial
history
in
Minnesota
relatingto
the
arbitration
and
collection
of
consumer
debts'
Accretive
wearsa
number
of
hats
as
it
relates
to
ther,)
.-a-I
l:- )"t
-f_11l
rJ]i"-l
i'--''tl5,s--::!ri
\"nr*l
\-./
r-{}
SEANNED
JAN
i
I
?0i2
U.$.
DISTRICT
@URT
ST.
PAUL
<)6/<
CASE 0:12-cv-00145-RHK-JJK Document 1 Filed 01/19/12 Page 1 of 36
 
patients
of two
Minnesotahospital
systemsand,
for
one
of
the
hospital
systems,
is
atonce
both
a
debt
collector
and
treatmentcoordinator.
2.
Accretiveis
licensed
as
adebt
collection
agency
in
Minnesota.
Accretive
has
largely
assumed
control
of
the
managementand
operations
of
theso-called
.,revenue
cycles"
of
both
Fairview
Health
Services
("Fairview")
and
NorthMemorial
Health
Care
("North
Memorial"),including
their
scheduling,
registration,
admissions,billing,
collection,
and
pa5rment
functions.
Accretive
assumes
managerial
responsibility
for
the
hospital
employees
whoperform
these
functions
and has
"infused"its
own
employees
intothestaff
of
the
hospitals.
Accretive
engages
in
"data
mining"
and
,.consumer
behavior
modeling"
on
patients,
as
described
below.
3.
Fairview
isthe
onlyhospital
system
in
the
country
to
also
hireAccretive
to
deliver
services
under
aso-called
"Quality
and
Total
cost
of
care,,
(,.QTCC")
contract.
Under
this
contract,
AccretivehelpsFairview
negotiatecontracts
with
HMOs
and
insurance
companies
through
which
the hospital
receives
incentivepay
to
cut
patient
costs.
Accretive
then receivesa
share
of
the
hospital'sincentive
pay.
Under
the
eTCC
contract,
Accretive
develops
'orisk
scores"on
individual
patients
andmanages
health
risk
assessments,
automatedcare
plans,
case
andpharmacy
management,
andduration
of
hospital
stays.
Accretivetells
its
Wall
Street
investors
that
it
identifies
patients
who
are
deemed
"outliers"
andtracks
utilization
and
profit
andloss
by
patient.
Fairview
has
called
Accretive
its
"strategic
partner."
Their
relationship
is
soextensive
thatFairview
accounted
for
over
13
percent
of
Accretive's
seryicerevenue
for
the
first
threequarters
of
CASE 0:12-cv-00145-RHK-JJK Document 1 Filed 01/19/12 Page 2 of 36
 
20ll
(over
$75
million).
The
financial
projectionsindicate
that
this
financial
entanglement
will
grow
once
a
newcontract,
discussed
below,
is
fully
implemented.
4.
Throughthese
extensiverelationships,
Accretivehascompiled
a
high
volume
of
extremelysensitive
and
personal
medical,financial,
and
other
records
involving
tens
of
thousands
of
Minnesotapatients
of
the
two
hospitalsystems.
Some
of
the
data
was
stored
on
an
unencrypted
laptop
computer.
Thelaptopwas
leftby
an
Accretive
employee
in
a
rentalcar
outside
thebar
and
restaurant
area
of
the
Seven
Corners
area
of
Minneapolis.
The
computerwasstolenand,
with
it,
data
onat
least
23,531
Fairview
and
North
Memorial
patients.
In
response
to
one
patient's
request,
Fairview
provided
the
patient
with
a
"screen
shot"
of
the
dataabout
thepatientthat
it
says
wason the
laptop.
The
screen
shot
(attached
as
paragraph
46)
sent
to
thepatient
by
Fairview
includesa
"medical
score"
to
predictthe
likelihood
thatthepatient
would
be
admitted
to
the hospital,a"medicalscore"
to
predictthe
"complexity''
of
the
patient,
a
description
of
the
"frailty''of
thepatient,
and
the
dollar
amountallocated
to
thepatient,s
health
care
provider.
In
addition,
the
datadisclosedpersonal
identifying
information
about
the
patient,
including
the
patient's
name,
address,
phonenumber
and
SocialSecurity
number.
The
screen
also
included
an
itemization
of
whetherthe
patient
had
22
listed
conditions,
including
bipolar
disorder,
schizophrenia,depression,
high
blood
pressure,asthma,
andeven
low
back
pain.
Accretiveviolated
privacy
laws
by failing
to
keep
privatepatient
data
secure.
CASE 0:12-cv-00145-RHK-JJK Document 1 Filed 01/19/12 Page 3 of 36

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