Bone Marrow Registry to Pay $520,000 for Improperly Marketing and Administering Donor Testing Services
Fashion Models Hired to Increase Donor Registration at Sporting Events and Shopping Malls
BOSTON – A bone marrow registry and medical laboratory company that hired fashion models to help increase donor registration, and provided financial incentives to employees who enlisted potential donors with health insurance, will pay $520,000 as part of a final judgment, Attorney General Martha Coakley announced today.
“Efforts to increase bone marrow donor registration cannot be built on unfair and deceptive practices that increase the cost of health care for all of us,” AG Coakley said. “No health care provider should be allowed to use gimmicks and free gifts to increase the volume of services covered by health plans for their own financial gain.”
Since 2001, health insurance coverage for bone marrow registry testing has been mandated in Massachusetts. Testing requires mouth swabs of potential donors followed by DNA testing of those samples.
According to the AG’s complaint, filed in Suffolk Superior Court today with the final judgment, Caitlin Raymond International Registry (“CRIR”) and UMass Memorial Health Ventures, Inc. (“UMMHV”), jointly engaged in improper marketing by paying fashion models to help recruit potential registrants for the National Marrow Donor Program during donor drives at local malls, festivals and sporting venues including Foxboro Stadium. Beginning in 2007, UMass Memorial laboratories performed the vast majority of the DNA tests of individual samples that CRIR staff collected.
During that time, the number of donor tests performed by UMass Memorial increased significantly from around 7,000 in 2008 to more than 40,000 in 2010, and the amount UMass Memorial charged for individual tests ranged from network rates of several hundred dollars up to more than $4,000 for individual donor tests.
The complaint also states that both CRIR and UMMHV, in an effort to increase registration, improperly waived copayments and deductible amounts for the testing of potential donors, gave away “tokens of appreciation” such as free t-shirts and sweatshirts; held free raffles, and incented staff to target insured individuals for testing through bonuses.
Additionally CRIR and UMMHV failed to disclose to registrants their relationship as well as the amount billed to health plans or the amount that potential donors may be obligated to pay.
The defendants, both subsidiaries of UMass Memorial Health Care, Inc. (UMMHC), cooperated with the Attorney General’s investigation and consented to the final judgment. CRIR has already refunded Massachusetts consumers close to $100,000 and paid several times that amount to reimburse health plans.
Under the terms of the final judgment, CRIR and UMMHV:
- will pay full restitution to Massachusetts consumers for any out-of-pocket payments they previously made for donor testing;
- will not charge health plans more than $175 over the next five years for donor testing;
- will pay the Commonwealth $500,000 for initiatives designed to improve health care services for Bay State residents and to combat unlawful marketing practices;
- and will pay an additional $20,000 for the cost of the AG’s investigation.
The judgment also prohibits CRIR and UMMHV from using their previous methods of increasing registration including fashion models and paying bonuses for enrolling insured donors. CRIR and UMMHV will also be required to give donors more information about the fee charged to their insurance company and the amount of costs the consumer may be required to pay. Additionally, the defendants and UMMHC have agreed to improve the financial and management controls at UMMHV and CRIR by reviewing compensation agreements against industry compensation benchmarks, reviewing invoices exceeding $10,000 and related contracts, and otherwise improving financial controls.
Consumers concerned about health care issues in the Commonwealth are urged to call the Attorney General’s Health Care Hotline at (888) 830-6277.
This matter was handled by Assistant Attorney General Thomas O’Brien and Financial Analyst Anthony Taylor of the Health Care Division.