July 30 Medical billing services provider Accretive Health Inc said it would voluntarily wind down its operations in Minnesota to settle a six-month-old lawsuit brought against it by the state's attorney general alleging violations of patient privacy.
The company's shares, which have slumped 62 percent since the lawsuit was filed, rose 20 percent on news of the settlement after the bell on Monday. They closed at $10.01 on the New York Stock Exchange.
The company did not admit to any wrongdoing alleged in the complaint and said it does not expect the settlement to have a material adverse effect on its financial condition.
The settlement includes a payment of about $2.5 million and potential restrictions on future Minnesota operations if the company plans to resume operations in the state.
Accretive Health estimated its adjusted earnings before income tax, depreciation and amortization (EBITDA) for the April-June period to be "significantly lower" than in the year-ago period, citing higher operating costs related to ending the Minnesota operations and the lawsuit.
The company, which is expected to report second-quarter results on Aug. 8, posted adjusted EBITDA of $20.7 million in the year-ago quarter.
As of Monday, the combined projected contracted annual revenue run-rate for the Minnesota operations was between $23 million and $25 million, the Chicago-based company said in a regulatory filing.