Accretive Health Investor Lawsuit Seeks Dismissal of Top Brass

Accretive Health Inc.'s chairman and CEO should be dismissed because of stock losses resulting from the use of tactics to collect money from hospital patients, according to an investor lawsuit.

In the lawsuit filed in Delaware Chancery Court in Wilmington, Del., the plaintiff Robert Doyle said Accretive's Chairman J. Michael Cline, CEO Mary Tolan and other board members breached their fiduciary duty, "violating state and federal law regarding debt collection and patient privacy and engaging in practices that were outright shameful."

Accretive's stock plunged 19 percent after it lost the right to collect health care debt for Fairview Health Services. The loss reduced the company's income by as much as $68 million, according to the suit.

Minnesota Attorney General Lori Swanson's office in January sued Accretive, saying it did not keep health care records for tens of thousands of patients confidential. That lawsuit came after an investigation revealed Accretive had access to patient data through contracts with two Minnesota hospital systems - Fairview Health Services and North Memorial Health Care - and used that data to assess patients' risk of becoming hospitalized.

In February, a report released by Swanson's office said Accretive placed employees in emergency rooms, cancer wards and delivery rooms to extract payments from patients before they were seen by medical staff.

Swanson said in July that Accretive had agreed to withdraw from doing business in the state for at least two years and pay the state $2.5 million. Swanson sued the Chicago-based company in January, accusing it of a privacy-law breach after a laptop computer containing data on about 23,500 patients was lost. Accretive admitted no wrongdoing in the settlement.

Doyle's lawsuit seeks unspecified damages. Christina Slemon-Dokos, a spokesperson for Accretive, could not immediately be reached for comment on the lawsuit.