Hospital CEO Will Depart --- Ex-Client of Accretive Health Won't Renew Chief's Contract

A Minnesota health system that has come under scrutiny for its hiring of hospital contractor Accretive Health Inc. to handle billing and collections functions said its chief executive will leave at the end of July.

The board of Fairview Health Services said Thursday that it decided in a special meeting not to renew the contract of CEO Mark Eustis, and that he will retire on July 31, when the contract expires. The Minneapolis-based nonprofit system, which includes seven hospitals and 42 primary-care clinics, didn't give a reason for the move.

A Fairview spokeswoman declined to comment, and said Mr. Eustis wasn't available.

In April, Minnesota Attorney General Lori Swanson issued a report critical of Fairview's relationship with Chicago-based Accretive Health. The report said Accretive Health appeared to have violated patient-privacy and debt-collection laws, and detailed alleged practices that included seeking payment from patients in the emergency room and at their hospital bedsides.

Fairview ended its contracts with the company earlier this spring. It said in a statement after Ms. Swanson's report that "we share many of her concerns and have already taken actions to address them."

Fairview said Thursday that its chairman, Chuck Mooty, will serve as interim CEO. A spokesman for Ms. Swanson's office said she has "great confidence" in Mr. Mooty's leadership.

The Minnesota attorney general sued Accretive Health in January for alleged violations of patient privacy after a company employee's laptop containing patient health records was stolen. The suit alleged that the company didn't do enough to protect patient data.

Accretive Health has said the attorney general's allegations are "grossly distort and mischaracterize" its work, and has sought dismissal of the suit. The attorney general's office has defended the accuracy of its report.

An Accretive Health spokeswoman wouldn't comment on Fairview's decision to let Mr. Eustis's contract lapse.

Accretive Health is facing scrutiny from members of Congress and the Federal Trade Commission related to its bill-collection practices. The Centers for Medicare and Medicaid Services are examining Fairview's practices, according to a spokesman for the agency.

Many hospitals are under financial stress because of reduced government payments and other factors, and are eager to increase collections. A growing number of them have hired so-called revenue-cycle management companies like Accretive Health to handle such work as filing claims with insurers and government programs and collecting money from patients.

Pressure to get money out of patients is also rising as more insurance plans require patients to pay large portions of their costs out of pocket. These costs represent a fast-growing share of hospitals' bad debt.