Embattled Hospital Debt Collector Taps Politicians For Defense

toggle caption Jim Mone/AP

So what do you do when you're accused of hitting up sick patients in the hospital to pay their bills — sometimes even before they get treatment?

Well, if you're Chicago-based Accretive Health, under fire by not only the Minnesota Attorney General but key members of Congress and possibly the Obama Administration, you fight fire with fire. You line up your own set of political defenders.

To back up a bit, this story began last year with a stolen laptop, which led to a January lawsuit filed by Minnesota Attorney General Lori Swanson charging Accretive with privacy violations.

The resulting investigation led, in turn, to an April story in The New York Times, that chronicled how Accretive workers allegedly posed as employees in Minnesota hospitals, and included "embedding debt collectors as employees in emergency rooms and demanding that patients pay before receiving treatment."

Accretive struck back, charging that that Attorney General Swanson's report contained "inaccuracies, innuendo and unfounded speculation." The company also enlisted a formidable political ally – Chicago Mayor and former Obama Chief of Staff Rahm Emanuel. He personally asked Swanson to back off, noting in a letter that the company "does important work for hospitals and good things for our City, particularly for our neediest citizens."

Swanson, however, declined Emanuel's entreaty. "We will continue to interview witnesses and perform our law enforcement responsibilities over charitable hospitals in Minnesota," she said in a statement.

So now Accretive is upping the ante. It has enlisted a veritable who's who in health policy to come up with "national standards for how hospitals and other providers interact with patients regarding their financial obligations." In other words, how aggressive can debt collectors be without running afoul of federal law, various or regulation or good public relations.

The group includes some well-connected heavy-hitters, including former Bush administration Health and Human Services Secretary Mike Leavitt and Medicare chief Mark McClellan, former Senate GOP leader Bill Frist,. There some prominent Democrats too, including former Clinton Administration HHS Secretary Donna Shalala and former Senate Democratic leader Tom Daschle.

For all of Accretive's alleged misdeeds, however, the collection of outstanding bills is a serious one for hospitals, particularly as they await the Supreme Court's decision about the 2010 health law. Hospitals agreed to take significant reductions in Medicare payments with the expectation they would make that money back when currently uninsured patients whose care now goes unpaid would gain coverage.

Should the high court strike down the requirement for most people to obtain insurance, however, that could leave hospitals in a financially difficult spot.