Fairview violated federal laws with billing practices

Strong-armed billing practices at the University of Minnesota Medical Center violated federal patient-protection laws, regulators have concluded after reviewing a range of incidents involving emergency room patients and others in fragile medical condition.

The findings, which stem from Fairview's relationship with a Chicago-based consulting firm, put the hospital at risk of being terminated from Medicare and Medicaid, the ultimate penalty the federal government can impose.

But a state official who is still investigating on behalf of the federal agency that runs Medicare said the Fairview-owned university hospital has ample time to correct its deficiencies and avoid sanctions.

"Certainly the goal is not to shut someone down," said Stella French, director of the Office of Health Facility Complaints at the Minnesota Department of Health.

Fairview officials said Wednesday that they "have been working diligently" to address the concerns of the Centers for Medicare and Medicaid Services (CMS). "We are very concerned about the issues that came up and are working collaboratively with CMS to get them resolved," said Carolyn Wilson, the hospital's president, in a written statement.

The hospital said the agency has already accepted one of its "corrective action" plans.

Federal inspection documents obtained by the Star Tribune show that the hospital repeatedly violated government rules by subjecting patients and their relatives to "abuse and harassment" during bill-collection attempts in the emergency room, labor and delivery area and other wards.

In one instance, investigators found, a patient who believed she was having a heart attack was approached by an administrative employee who told her she owed $672 for services she had received so far that day. "The patient stated she was 'angry, scared and appalled,"' the documents said.

Regulators reviewed medical records covering 21 cases and interviewed patients or their representatives. In a third of those cases, the hospital "failed to protect and promote each patient's rights to be free from all forms of harassment when the hospital utilized aggressive payment collections tactics at the point of patient care," investigators said. In addition, the hospital failed to respond promptly to patient grievances in four of 14 cases that were reviewed.

The review also found violations of a federal law known as EMTALA, an "anti-dumping" regulation that prevents hospitals from transferring poor patients before they're medically assessed and stabilized. But state officials who helped conduct the review said the main findings dealt with patient rights violations.

Accretive settles

The incidents under review stemmed from Fairview's hiring of Accretive Health Inc. as a revenue consultant beginning in 2010. Minnesota Attorney General Lori Swanson sued Accretive in January for deceiving Fairview hospital patients and badgering them for money.

In late July, Swanson and Accretive reached an agreement that bans the firm from doing business in Minnesota for at least two years, although Accretive denied any "findings of fault." The agreement also requires Accretive, one of the country's largest health care consulting firms, to pay $2.5 million into a patient restitution fund.

Swanson's office declined to comment on Wednesday.

In the course of the federal review, a Fairview manager and 10 registration employees told investigators that Accretive trained hospital staff members in techniques to maximize revenue collection at the "point of service." All 10 registration staffers said they were uncomfortable following Accretive's scripts but were required to by their superiors. The Accretive program also included collection quotas and the threat of being fired "if collections were not on point," the documents said.

'Full compliance'

Fairview said that it has made several changes in response to concerns raised both by Swanson and the federal government and that it expects "to be found in full compliance" once follow-up site visits are completed.

Among other things, the hospital said it has stopped collecting past-due balances, co-insurance payments and co-pays in emergency departments, according to the hospital's statement.

Fairview also said it has taken steps to ensure that complaints from patients and employees get "prompt attention" and to revise the training for hospital billing employees to ensure that "every patient interaction reflects Fairview core values" and that patient refunds are paid promptly.

"We continue to learn from this experience," Wilson said.

The Minnesota Hospital Association would not comment on whether the violations, or the government's threat to cut off Medicare payments, were unusual. However, it would be unusual for a hospital to actually lose its Medicare payments, said spokeswoman Wendy Burt. "We haven't heard of a Medicare agreement being terminated," she said. Normally, this kind of letter "starts a process" that leads to a corrective-action plan.

Staff writer Maura Lerner contributed to this report.