Report criticizes Fairview

Minnesota Attorney General Mike Hatch released a report Monday alleging Fairview Health Services used aggressive debt-collection practices to discourage uninsured patients from returning.

Hatch said younger people are the largest uninsured population and are typically employed by firms that do not offer health benefits.

David Page, Fairview Health Services president and chief executive officer, denounced the report’s claim.

“That is absolutely, unequivocally wrong,” Page said. “There is no intention of (Fairview Health Services) being scary to any patients. Our first concern is medical needs; bill-paying is appropriately a secondary issue.”

The report focuses on a number of Fairview Health Services business practices, including executive compensation, travel, entertainment and consulting expenses.

It also questions a number of Fairview Health Services’ debt-collection practices. These practices include contracts with collection agencies previously sued by the state and the unlawful garnishing of patients’ bank accounts.

The report questions the active harassment of the health service’s patients who, in some cases, had already established payment plans or did not even owe the company money.

Fairview Health Services is not aware of how many collection lawsuits have been filed in its name, according to the report.

Hatch said the compliance review, completed at the request of the State Senate, started in mid-2003 when a Fairview Health Services employee delivered a box of documents to the attorney general’s office.

The completed report implies Fairview Health Services failed to approach uninsured and lower-income customers in good faith.

At the same time, Fairview Health Services paid consultants hundreds of thousands of dollars without reviewing invoices. It also funded excessive perks for company executives, which included 30 country-club memberships and season tickets to a variety of Minnesota sports teams, according to the report.

Fairview Health Services also paid Page a base salary of $525,000, plus perks and bonuses in excess of $100,000, according to the report.

Page defended his salary, noting that he has the expertise, education and skills that merit his compensation.

“I look in the mirror every day and have to answer affirmatively that I do everything I can,” Page said.

Hatch said Fairview Health Services’ executive compensation has attracted the attention of the Internal Revenue Service, which said it threatens the company’s nonprofit status.

The report chronicles a number of anecdotal cases in which the attorney general said he believes individuals were treated unfairly.

One case includes two people who had their exempt Social Security benefits garnished by Fairview Health Services.

Another includes a 30-year patient who found himself pursued by debt collectors after Fairview Health Services refused to accept documentation that he already paid a bill, according to the report.

The report states that Fairview Health Services did not keep records of patient complaints concerning its debt-collection practices. At the same time, Fairview Health Services has forwarded 77,000 patient accounts to an attorney for collections purposes since 2001, according to the report.

In comparison, Boynton Health Service rarely sends anything to collections, said David Golden, public health and marketing director.

“We don’t make a profit and have highly paid CEOs,” he said.

Page said Fairview Health Services has cooperated fully with Hatch’s investigation.

“It was a worthwhile experience to learn from an external pair of eyes,” Page said.

Next on Hatch’s agenda is a comprehensive review of Blue Cross Blue Shield, he said.