One of the nation’s largest medical debt collectors just got a bit smaller after it agreed to stop operating in Minnesota over allegations that the company staffed hospital emergency rooms with its agents in order to get people to pay up on any owed debts before they received additional care.

We first told you about Accretive Health’s hospital hijinks back in April, when Minnesota Attorney General Lori Swanson — who was already suing the company for alleged privacy violations — released a boatload of documents about the debt collector’s questionable practices.

As part of yesterday’s settlement agreement, Accretive must give up all remaining business in Minnesota by Nov. 1. It is then banned for doing any business in the state for two years and would require permission from the Attorney General’s office to return to doing business in Minnesota before Nov. 2018.

Accretive will also pay $2.5 million to a fund intended to compensate patients.

The scandal began at the beginning of 2012 when AG Swanson filed suit against Accretive after a laptop was stolen containing around 23,500 patient files, which also contained very specific information about the patients’ conditions and treatments that no one outside the hospital should have access to without patients’ consent.

Swanson then released the documents in April that revealed the pressure put on both patients and hospital staffers about collecting patient debt.

“Patients are harassed mercilessly,” one hospital staffer said in that report.

Accretive employees would be placed within hospital emergency rooms and attired in a fashion indistinguishable from actual hospital staffers.

Added a second employee, “We were told if we don’t get money from patients, in the emergency room, we will be fired.”

From the Minneapolis Star-Tribune:

Some patients said they were asked to pay while in the emergency room, lying on a gurney or hooked up to morphine. One woman said she was asked for payment while she was being treated for a miscarriage.

Yesterday, when announcing the settlement, Swanson explains that emergency rooms “should be a solemn place, not a place for a financial shakedown of patients.”

For its part, Accretive maintains it did nothing wrong, pointing out that — like just about every corporate settlement — there were “no findings of fault.” Rather, it decided to agree to the ban and to pay out $2.5 million “to prevent this matter from being a continued distraction.”

Accretive is banned from Minnesota [StarTribune.com]

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