Hammond-Henry Hospital in Geneseo, Ill. filed a seven-count lawsuit in Henry County (Ill.) Circuit Court alleging breach of contract by collection agency Allied Business Accounts, doing business as Health Care Billing Services.

In the lawsuit, the hospital, which hired Health Care Billing Services in March 2007 to manage all private-pay accounts receivable, claims embezzlement, misappropriation of funds and failing to maintain a trust account for the deposit of funds - a violation of the Illinois Collection Agency Act. Five counts in the lawsuit allege the hospital is owed at least $107,498.

The lawsuit further states that the hospital has learned that Health Care Billing Services is closing and that the hospital has used all available remedies to find its funds.

The hospital wants the agency to provide an accounting of records - including the location, identification and dates of funds received - and states it’s without legal recourse to otherwise obtain the records.

Listed as defendants along with Health Care Billing Services include: James Hurlburt, president of the agency; Kathryn Mommsen, secretary and director; Theresa Knight, general manager and vice president; and Betty Marschang, director of marketing development. The defendants weren’t immediately available for comment.

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