Accretive says AG probe impacts business

Accretive Health, the Chicago-based company under investigation by the Minnesota Attorney General, said Wednesday the case is causing delays in signing new contracts with health providers.

In its quarterly earnings release, Accretive Health officials fielded dozens of questions from market analysts about Attorney General Lori Swanson's allegations. Swanson filed a lawsuit against the company in January and recently released more details of her investigation of the company's relationship with Fairview Health Services.

The company has denied it violated state and federal patient privacy and debt collection laws. Accretive Health CEO Mary Tolan said officials are looking for a way to resolve the matter. Meanwhile, she said the company plans to release more detailed information about the case on Friday in response to questions raised by Sen. Al Franken, D-Minn.

Accretive Health contracts with hospitals and clinics to manage revenue, collect payments from insurance companies and patients and work with hospital administrators to improve both financial stability and quality of care.

Besides anticipating delays in signing contracts with new clients until the lawsuit is resolved, Accretive Health officials are also making more conservative estimates for revenues this year. They said they are uncertain how much they'll end up paying in legal costs to defend against the allegations.

While Tolan acknowledged the dispute led Fairview to end its contracts with the company, she said so far the company's clients in other states haven't expressed any interest in following suit.

"There's been a range of reactions," she said. "We've had everything from a major health system say, 'you know, we don't care what's going on in Minnesota,' to people saying, 'boy this is really not at all what we hear from any of your references, and what we hear is that you're going to follow all of our policies and procedures, and can you assure us of that?' Absolutely, and in fact that's exactly what it says in our partnership agreement."

Accretive Health Chief Financial Officer John Staton said it's unclear when the case will be resolved.

"I don't think we can speculate on that," he said. "We're optimistic and we want to move as quickly as possible to get this behind us and get back to building our business and our client value and strengthen our relationships with our clients, which is what we do every single day as we operate our business."

Accretive Health saw a major drop in its stock price after Swanson released new details of her investigation two weeks ago. The stock appeared to be on its way back up after the earnings release.

Full details of Accretive's first quarter earnings are available here.