Anti-Capitalist Obama Administration Targets Debt Collectors

Under the guise of consumer rights, are local and federal officials seeking to strangle profitable companies through any means available and get them out of the way?  As usual, it is not the outward appearance of things, but the fundamental processes at work that invite earnest scrutiny.

Remember when President Obama freely admitted early on in 2008 that he wished to "spread the wealth around"?  But other than saying he wouldn't raise taxes on anyone making less than $250,000 and demonizing the rich, details of his redistribution plan remain generally outside the realm of public awareness.

Socialists Richard Cloward and Frances Fox Piven suggested in 1965 that "collapsing current financing arrangements" could unleash "powerful forces" generating "major economic reforms at the national level."

Could Obama and his fellow redistributionists be targeting private debt collectors?  These companies recover billions in lost revenue for large corporations, thereby increasing their profit margins.  To the anti-capitalist, excess wealth is the root of all evil; any surplus must be taxed, seized, fined, or litigated. 

A developing corporate scandal involving Chicago-based Accretive Health has lots of class warfare potential.  Who can't sympathize with cash-strapped patients fending off heartless bill collectors?

Minnesota's Democrat Attorney General Lori Swanson certainly feels their pain.  She has sued Accretive Health, a medical debt collector, alleging that the firm violated patient confidentiality under federal HIPAA privacy laws and interfered with emergency treatment under EMTALA.

Joining the fray are Senator Al Franken of Minnesota and Rep. Fortney (Pete) Stark of California, who have asked for a federal investigation.  Rep. Stark is leading the charge.  As the senior Democrat on the subcommittee overseeing Medicare and health-related issues, Stark called Accretive's tactics "abominable."  "This is corporate greed at its worst," said Stark.  Really?

Has Stark heard of free-as-a-bird Democrat Jon Corzine and the collapse of MF Global?  One point six billion dollars is missing.

Rep. Henry Waxman (CA), the most senior Democrat on the House Energy and Commerce Committee, as well as Democratic Reps. Diana DeGette (CO) and G.K. Butterfield (NC), sent a letter Wednesday to Mary Tolan, CEO of Accretive Health, asking her to attend a briefing with them on May 4.

Even Health and Human Services Secretary Kathleen Sebelius and Attorney General Eric Holder are looking into the practice of debt collectors pressuring patients in the hospital setting for payment.  Sebelius announced the probe while speaking at a press conference with Holder last week, where the pair cited the arrest of 100 individuals involved in health care fraud.

On the other side, facing down the Democrat do-gooders , there's Tolan, who has defended her company's record and urged media hounds to "do their own research on this Attorney General [Swanson] and her approaches," which Tolan contends are all in the public record.

Accretive Health's chairman is the tiger-loving, über-rich J. Michael Cline, who financed the venture back in 2003 and whose client list includes a group of nuns and the largest Catholic hospital system in the U.S.

After the story went public this past week, Accretive Health's stock price dropped dramatically.

Accretive shares fell nearly 42 percent one day after Swanson issued her six-part report critical of the Chicago-based company's collections practices. Her federal lawsuit accused Accretive of breaching patient privacy laws.

Accretive's troubles are spreading via the mainstream media.  A local CBS affiliate in Chicago reported that shareholders are not happy with the negative publicity and have filed a class-action lawsuit in Cook County.  An investor, Linda Wong, brought the suit and wants financial compensation for those who purchased shares between March 2, 2011 and April 24, 2012, before the price fall.

As for the Minnesota case, AG Swanson alleges that some Accretive employees at two nonprofit hospital systems in Minnesota did not identify themselves as debt collectors to patients there.  They acted as financial counselors and clerks gathering confidential patient information while at the same time allegedly harassing emergency room and post-surgery patients about their bills before treatment.

When one of an Accretive employee's laptops was stolen from a locked car in Minneapolis last July, it was revealed that said computer contained unencrypted information gathered from over 20,000 patients.  The theft was reported and the hospital notified of the security breach.  When brought to the attention of the state attorney general, Swanson concluded that Accretive could not be trusted with patients' private information and launched an investigation. 

Swanson maintains that "Accretive used protected patient health information to collect debts from patients; indeed, its debt collectors use the data to build credibility with patients."  Swanson's report also revealed that the year before the 2011 "smash and grab" break-in of the employee's car, a similar incident occurred.  In June 2010, an encrypted Accretive laptop was stolen in nearby Roseville but was not considered a security breach, so the case was not pursued.

But that's only half the story.

The other half involves SEIU, a Michael Moore-loving AG, and the largest Catholic hospital system in the United States.

Swanson and the SEIU

The two Twin Cities hospitals cited in Swanson's report employ about 1,500 SEIU members. 

An SEIU executive vice president said union employees and their families often seek care at the hospitals, and they were worried that their private information was being compromised.  In addition, SEIU officials are looking into whether their workers were asked to engage in debt-collecting duties or if Accretive was doing the work of its members.

The union has asked the hospital to address its relationship with Accretive during contract negotiations currently under way.

This isn't the first time SEIU and AG Swanson's name have appeared together.  In September 2011, SEIU praised Swanson for her efforts to investigate banks "and their unlawful activity."

Local 26 President Javier Morillo said, "Thank goodness there are strong advocates like Attorney General Swanson, making sure that those responsible are held to account for what they've done to the people of Minnesota and the United States."

When SEIU praises someone who ostensibly champions the rights of the little guy, it's time to examine the object of their affection more closely.

Swanson, the Lawsuits, and the Office Staff

Swanson, a University of Wisconsin-Madison grad, was sworn in as Minnesota's 29th attorney general in 2007.  She quickly gained a reputation for going after large corporations, all in the name of consumer protection.  Sounds like two other high-powered leftists we know: Elizabeth Warren and Kathleen Sebelius.  As a former Kansas state insurance commissioner, Sebelius held herself up as an advocate for women's health issues and fought hard against Blue Cross and Blue Shield, calling some of their practices "deplorable."

Swanson's modus operandi is the same.

It wasn't long after the Minnesota AG assumed her official duties when she sued Allianz, a Minnesota-based insurance giant.  Swanson then brought more lawsuits against other insurers, yielding over $700 million in refund payments to senior citizens.

She sued Sprint Nextel Corporation and supported legislation making sure armed forces personnel could cancel cell phone and satellite TV contracts without penalty when deployed overseas.

Swanson's record on representing seniors, military personnel, and patients makes her appear above reproach in some circles.  She sees herself as the people's lawyer, "leveling the playing field for the ordinary folks."  But others who have worked with her see the lawmaker as a shifty, demanding, agenda- driven boss.  

Swanson has been called a "pseudo-populist" by former staff attorneys who have felt the sting of her top-down management style.  Over 60 resigned or were fired within the first two years of her "Big  Brotherish" micromanaging tactics.  One attorney suggested that Swanson placed loyalty to her way of thinking above the law.

Paul Civello, a lawyer who quit in 2007, stated, "Those who have left include some of the best, brightest, most dedicated attorneys the attorney general's office had. They are irreplaceable[.] ... No law firm that has suffered the loss of so many talented, experienced lawyers in so short a time could claim to be well-managed and functioning."

The website Hot Air noted in a 2010 article that besides her autocratic tendencies, Swanson is a fair-weather federalist.  While President Bush was in office, she accused his administration of allowing insurance companies to be regulated by the federal government, who in the end failed to protect policyholders from rising premiums.

After Obama's election, she wholeheartedly supported ObamaCare, despite the fact that premiums have risen dramatically since its passage in 2010.  Seems that if there's corruption under Democrat leadership, consumers can fend for themselves.  Unsurprisingly, Swanson lists Michael Moore's Sicko as her favorite movie.

So is AG Swanson really advocating for poor folk, or does she aggressively pursue the private sector to advance a leftist political agenda?

Accretive, Ascension Health, and Catholic Health Association

The calls for an Accretive investigation have highlighted another connection to the company that raises even more questions about the motives of Ms. Swanson and her ilk. 

Turns out Ascension Health, the largest nonprofit Catholic health system in the U.S., went into business with Accretive Health in 2004, where ObamaCare lobbyist Sr. Carol Keehan previously had been board chair of one of its operations in Pensacola, Florida.* 

Keehan, a Daughters of Charity nun whose order founded Ascension, is now CEO of the highly influential and liberal Catholic Hospital Association (CHA).  The nonprofit CHA echoes Ascension's value statement on its IRS 990 form.  It also lists Anthony Tersigni, president and CEO of Ascension Health Systems, as one of its board members.

CHA's stated goal is to promote "Jesus' healing mission" and give special attention to "the poor and vulnerable."  The association sprinkles this phraseology throughout its websites, reports, and various company newsletters.

Why would Ascension, whose mission is to provide health care for "100%" of those who seek it, help do business with a rabid debt collector like Accretive?  Other health systems like SSM Health have refused to hire the firm due to its aggressive tactics.

The answer lies in Accretive's financial origins.

Ascension was an early investor in Accretive in 2004 and, according to AG Swanson, gave the company access to "$1 billion of dormant receivables to attempt collection, as a sideline to the core relationship" of collections and consultation.

Ascension Health received an ownership stake in the publicly traded debt collection company.  Ascension Health currently owns a 7-percent interest in Accretive, according to documents filed with the Securities and Exchange Commission.  In 2009, Ascension Health held an 11-percent interest in Accretive, according to a news report. 

Just recently, another nonprofit, Catholic Health East, hired Accretive as its "revenue cycle operating partner."  Despite the company's troubles in Minnesota and Cook County, it's still able to attract new clients and hold on to old ones.  Utah's Intermountain HealthCare struck a deal last November and says it has "no plans to cancel it."  Intermountain, like Ascension, is a nonprofit, and that's the rub for the social justice crowd on the left. 

Corey Davis, an attorney for the far-left National Health Law Program (NHeLP), and who previously represented the LGBT community at Equality Advocates Pennsylania, weighed in on Accretive and its relationship with hospitals which reap the rewards of their nonprofit status.

If you're embedding debt collectors in ERs, most people would say that's uncharitable. "Charitable hospitals get a huge subsidy by not paying their taxes, billions of dollars a year. It's a legal status, but also a social contract," said Corey Davis, an attorney at the NHeLP.

Accretive's business dealings with Catholic hospitals promise to stir up some bad press for institutions which minister to the poor and vulnerable while hiring aggressive debt collectors to pressure them for unpaid bills.

AG Swanson has targeted a private company in the name of consumer rights, but Accretive, the private company, appears to operate like a government program.

Strangely enough, looking into Accretive Health's business practices, this situation could have been lifted right out of Don Berwick's Center for American Progress playbook.

Accretive tells investors that under their Quality and Total Cost of Care (QTCC) contract, they have a track record of cutting costs.  Their terminology is eerily close to the Obama blueprint for transforming healthcare. 

  • Risk scoring of patients
  • Has an "intense focus" on "reducing avoidable hospital admissions"
  • Identifies the "sickest and most impactable patients" for "proactive management"
  • Identifies "real-time interventions with significant revenue or cost impact"

Is the government in competition with Accretive?

Could Swanson be actively engaged in cutting out the middleman (private debt collectors) to make room for a government entity to take over?

Accretive's legal troubles should get Republicans and conservatives to open their eyes and see the forest and not just the trees.  This isn't about consumer rights or a rabid debt collection agency.  This is about a radical agenda to end capitalism.

*Corrected. Sr. Carol Keehan was incorrectly identified as having served on the hospital board at the time of the acquisition.

Read more M. Catharine Evans at Potter Williams Report.