Accretive Health Investor Sues After 42 Percent Share Drop
An Accretive Health Inc. (AH) investor sued the hospital billings collection company after a report on its practices issued by Minnesota Attorney General Lori Swanson triggered a 42 percent share price decline yesterday.
In a six-part report released April 24, Swanson criticized company policies that she said included the posting of debt collectors in emergency rooms and at patient bedsides.
Swanson sued the Chicago-based company in January, alleging it failed to protect patient confidentiality and didn’t disclose the degree of its involvement in revenue management for two Minnesota hospital systems.
“The company failed to disclose it was violating health privacy laws, state debt collection laws and state consumer protection laws,” allowing its shares to trade at artificially high levels, investor Linda Wong alleged in her lawsuit filed today in federal court in Chicago.
Wong is seeking class-action, or group, status on behalf of anyone who bought Accretive shares from March 2, 2011, to April 24, 2012, as well as an award of unspecified money damages.
Also named as defendants in the investor suit are Chief Executive Officer Mary A. Tolan and Chief Financial Officer John T. Staton.
Rhonda Barnat, an outside spokeswoman for the company, later said it doesn’t comment on pending litigation. She is a managing director with the Abernathy MacGregor Group Inc. in New York.
Francesca Luthi, senior vice president for investor relations at Accretive Health, didn’t reply to a telephone message seeking comment on the lawsuit.
“We have a great track record of helping hospitals enhance their quality of care,” Luthi said yesterday in a statement. “For example, we have helped over 250,000 patients get insurance coverage.”
The case is Wong v. Accretive Health Inc., 12-cv-3102, U.S. District Court, Northern District of Illinois (Chicago).
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