BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced a $520,000 final judgment on Thursday against a bone marrow registry and medical laboratory company that allegedly hired fashion models to help increase donor registration.
Caitlin Raymond International Registry and UMass Memorial Health Ventures Inc. allegedly also provided financial incentives to employees who enlisted possible donors with health insurance. The defendants, which are both subsidiaries of UMass Memorial Health Care Inc., will pay $520,000 as part of the final judgment.
"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," 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."
The defendants cooperated with Coakley's office and consented to the final judgment. CRIR has refunded Massachusetts consumers close to $100,000 already and has paid multiple times that amount to reimburse health plans.
Health insurance coverage for bone marrow registry testing has been a requirement in Massachusetts since 2001. Bone marrow testing requires mouth swabs of possible donors followed by submitting samples for DNA testing.
The defendants allegedly jointly engaged in improper marketing by paying fashion models to aid in the recruitment of possible registrants for the National Marrow Donor Program during donor drives at festivals, sporting venues and local malls. UMass Memorial laboratories performed the most of the DNA tests of individual samples that CRIR staff collected starting in 2007.
Coakley's complaint also alleges that both UMMHV and CRIR, in an attempt to increase registration, improperly waived deductible amounts and co-payments for the testing of possible donors, gave away "tokens of appreciation" such as free sweatshirts and T-shirts, held free raffles and incentivezed staff with bonuses to target insured individuals for testing. In addition, UMMHV and CRIR allegedly failed to disclose to registrants their relationship as well as the amount that was billed to health insurance plans or the amount that potential donors might be forced to pay.
Under the terms of the final judgment, UMMHV and CRIR will pay the state $500,000 for initiatives intended to improve health care services for state residents and to fight against unlawful marketing practices. They will also not charge health plans more than $175 over the next five years for bone marrow donor testing, will pay full restitution to state consumers for any out-of-pocket payments they previously made for testing donors and will pay an added $20,000 for court costs.