Accretive Investor Sues Board Over Debt-Collection Claims

Accretive Health Inc. (AH)’s chairman and chief executive officer should be dismissed over stock losses caused by the use of “shameful” tactics to collect money from hospital patients, an investor said in a lawsuit.

Chairman J. Michael Cline, CEO Mary Tolan and other board members breached their fiduciary duty, Robert Doyle said in the lawsuit made public today in Delaware Chancery Court in Wilmington. Accretive plunged 19 percent after it lost the right to collect health-care debt for Fairview Health Services, reducing 2012 income by as much as $68 million, Doyle said.

“The company was violating state and federal law regarding debt collection and patient privacy and engaging in practices that were outright shameful,” Doyle said in the complaint.

Minnesota Attorney General Lori 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 accord.

The company also faced consumer lawsuits over its tactics that damaged its reputation, according to Doyle. His so-called derivative lawsuit demands unspecified damages that would go to Accretive’s coffers.

Christina Slemon-Dokos, a spokeswoman for Accretive, didn’t immediately return a call for comment on the lawsuit.

The case is Doyle v. Accretive Health Inc. CA8008, Delaware Chancery Court (Wilmington).

To contact the reporter on this story: Steven Church in Wilmington, Delaware at schurch3@bloomberg.net

To contact the editor responsible for this story: John Pickering at jpickering@bloomberg.net

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