- Office of the Attorney General
Media Contact for AG Campbell Secures $2.5 Million in Relief From Leominster Company for Overcharging MassHealth Members and Violating Consumer Protection Laws
BOSTON — Attorney General Andrea Joy Campbell announced today that her office reached a $2.5 million settlement with Leominster-based Regional Home Care, Inc, resolving allegations that the company engaged in unfair, deceptive and abusive debt collection practices in violation of state consumer law and debt collection regulations and improperly collected money from members of MassHealth, the state’s Medicaid program, for balances not owed or that were already paid for by MassHealth.
“Regional Home Care engaged in illegal practices at the expense of vulnerable consumers across Massachusetts who depend on this medical equipment for their health and livelihood,” said AG Campbell. “As a result of this settlement, thousands of consumers who were harmed by this company’s actions will directly benefit, and our office will continue to protect consumers from predatory practices and scams.”
The assurance of discontinuance, filed in Suffolk Superior Court, with Regional Home Care alleges that the company engaged in aggressive debt collection tactics, including making misleading threats about the consequences of nonpayment and failing to inform consumers of their legal rights to dispute and obtain validation of their debts.
The AG’s Office also alleges that Regional Home Care filed over 13,000 debt collection lawsuits against consumers in the Leominster District Court, despite 99 percent of consumers sued neither resided in that district nor had their contracts with Regional Home Care executed there. This practice is not only illegal, but hinders debtors’ access to justice because of the long distances they are forced to travel to defend themselves in court hearings. As a result, Regional Home Care obtained court judgments more easily against consumers who were unable to travel to Leominster to contest their cases, and consumers who were able to travel were forced to incur unnecessary travel expenses and take time off work to litigate their cases.
Additionally, the settlement alleges that Regional Home Care collected and/or attempted to collect charges from MassHealth members in excess of the amounts paid by MassHealth.
Regional Home Care is a medical equipment supplier and service provider that sells and rents equipment such as oxygen tanks and Continuous Positive Airway Pressure (CPAP) devices to treat respiratory ailments like oxygen deficiency and sleep apnea. Regional Home Care also serves low-income consumers enrolled in MassHealth.
The AG’s Office alleges that Regional Home Care failed to provide consumers notices, as required by law, informing them of their right to dispute the validity of the debts and to seek verification of the debt. The company also allegedly failed to advise consumers of their right to request that the company refrain from calling their place of employment to collect their debts, and falsely deceived consumers into believing non-payments of their debts could result in referral to debt collection agencies or attorneys.
In addition to improperly billing individual consumers, the AG’s Office contends that Regional Home Care routinely sued MassHealth members for amounts not owed and for amounts already paid by MassHealth, which covers the purchase, rental, and repair of some medical equipment for members. Regional Home Care also charged MassHealth members for return shipping costs and court filing fees. The AG’s Office contends that these practices violate statutory and regulatory protections against excess charges for MassHealth members.
In addition to paying $500,000 to the state, Regional Home Care will also be required to vacate every consumer judgment it has obtained against consumers in the Leominster District Court, unless the consumer already resided in Leominster or the judgment has been satisfied. In total, $2.1 million worth of judgments are expected to be vacated. Regional Home Care is also prohibited from the selling, transferring, or collecting on the judgments, and will be required to refund MassHealth consumers over $9,000. Consumers entitled to refunds do not need to take any steps to obtain this relief.
Under the terms of the settlement, Regional Home Care will also come into compliance with federal and state laws and change its business practices and reporting requirements. This will include filing any lawsuits against consumers in their respective judicial district, making at least three attempts to retrieve equipment or obtain payment before initiating litigation against consumers, and not billing, collecting, attempting to collect or seeking payment from MassHealth members for medical equipment or return shipping costs for medical equipment, even if those members have stopped using and have not returned equipment.
The AG’s Office is dedicated to stopping illegal debt collection practices and encourages anyone with concerns about debt collection practices to learn more about fair debt collection, or file a complaint online if they need assistance. MassHealth patients who believe that they have experienced fraud, abuse, or neglect may also call the AG’s Medicaid Fraud Tip Line at 617-963-2360.
This matter was handled by Assistant Attorney General Jane Sugarman, and former Division Chief Shennan Kavanaugh, both from the AG’s Consumer Protection Division, along with Deputy Division Chief Kevin Lownds and Senior Healthcare Fraud Investigator William Welsh, both of the AG’s Medicaid Fraud Division.
The Massachusetts Attorney General’s Medicaid Fraud Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $5,542,963 for Federal fiscal year 2023. The remaining 25 percent, totaling $1,847,641 for FY 2023, is funded by the Commonwealth of Massachusetts.