Accretive Health Denies AG Charges, Moves to Dismiss

Over the weekend Accretive Health (NYSE: AH) released a statement denying accusations by the Minnesota Attorney General’s office and yesterday announced it had filed a motion to dismiss all claims against it.

Last week Minnesota Attorney General Lori Swanson released a six-volume “compliance review” of Minneapolis-based Fairview Health Services, a not-for-profit chain of seven hospitals and more than 40 clinics, and its contractual relationship with Accretive Health, a publicly traded firm offering revenue cycle management services for hospitals.

In January the attorney general sued Accretive for allegedly failing to protect the confidentiality of patient health care records, in this case a laptop stolen from an Accretive employee that contained patient records from Fairview and other health care organizations.

The attorney general’s complaint “includes allegations that are factually baseless and legally indefensible,” states the company. “What is worse is that rather than litigate this case in the courtroom, the Attorney General orchestrated a nationwide media campaign against Accretive Health.”

In its press release on the filing, Accretive refuted what it perceives as the attorney general’s “core” of the case. Accretive claims it cannot be held liable for the laptop containing patient data that was stolen from one of its employees, either under the federal Health Insurance Portability and Accountability Act (HIPAA) or the Minnesota Health Records Act. To date there has been no evidence that the data on the laptop has been compromised, therefore “in the absence of any injury, the Attorney General lacks legal standing to pursue claims under HIPAA and the Minnesota Health Records Act as a matter of law,” Accretive claims in its response.

The attorney general’s complaint also focuses on Accretive’s debt collection practices, but according to Accretive those alleged abuses have been addressed by the Minnesota Department of Commerce, which has entered into a Consent Order with Accretive. “Accretive Health continues to work cooperatively with the Department of Commerce,” the company states. “Under fundamental principles of law, the Attorney General is barred from pursuing the identical claims already addressed by a fellow state official.”

Finally, “the Attorney General’s consumer fraud claims are baseless in fact and law,” Accretive writes, as its practices “were widely disseminated to the public in securities filings and media accounts, defeating any fraud claim.”