For Immediate Release
February 2, 2012
James T. Boffetti, Senior Assistant Attorney General
Chief, Consumer Protection Bureau
New Hampshire Attorney General Michael A. Delaney today announced that he has filed a complaint in Hillsborough County Superior Court North against UMass Memorial Health Ventures ("UMass") and Caitlin Raymond International Registry ("Caitlin Raymond") for unfair or deceptive acts under the Consumer Protection Act involving the defendants' solicitation of bone marrow registry participants.
The complaint alleges that UMass and Caitlin Raymond misinformed consumers that the DNA testing necessary to be listed on the national bone marrow registry would result in minimal or no charge to their insurance companies, when, in fact, UMass and Caitlin Raymond billed insurance companies from between $700.00 and $4,300.00 for a test that costs a fraction of that amount.
In addition, the complaint alleges that UMass and Caitlin Raymond adopted a policy to seek only minimal insurance information from prospective donors and then utilized commercial insurance websites to locate missing insurance information for submission of those claims to insurance companies.
The complaint also alleges that UMass and Caitlin Raymond employed high-priced professional models dressed in UMass lab coats and held raffles involving expensive items, such as flat screen televisions, as a lure to bring in prospective donors and rush them through the consent process. UMass and Caitlin Raymond compensated recruiters and administrators under a lucrative commission compensation system that encouraged recruiters to seek out prospective donors with insurance coverage.
Contemporaneous with filing the complaint, the Attorney General filed a Consent Judgment signed by UMass and Caitlin Raymond. That judgment, if approved by the Court, would require UMass and Caitlin Raymond to pay a total of $200,000.00 in civil penalties, as well as reimburse the State for the cost of this investigation.
In addition, UMass and Caitlin Raymond would make a donation to the National Bone Marrow Registry in the amount of $100,000.00 in support of the work of bone marrow donation and to improve the image of bone marrow recruitment organizations.
Previously, UMass had reimbursed the cities of Nashua and Manchester approximately $98,000.00 for the amount both cities paid under their self-insured plans for HLA testing for city employees. UMass also reimbursed Anthem subscribers $8,100.00 for amounts deducted from individuals' health reimbursement accounts.
While making no admission of wrongdoing, UMass and Caitlin Raymond agreed to an injunction that requires fundamental changes in their New Hampshire recruitment practices, including a cap on the amount UMass and Caitlin Raymond can charge insurance companies of $150.00. UMass and Caitlin Raymond must inform donors of the amount that will appear on their Explanation of Benefits form. They must discontinue the practice of holding raffles and the use of models in connection with donor outreach events. They must modify their donor consent form to provide clearer and more specific information and consent.
Attorney General Delaney stated, "This investigation helped expose the abuses of a system that contributes to the ever rising costs of health care. UMass and Caitlin Raymond took advantage of a well meaning New Hampshire statute enacted to encourage people to join a bone marrow registry. Charging $4,300.00 for a test that costs $50.00 is an outrageous exploitation and distortion of that statute. The defendants employed aggressive marketing techniques that crossed the line into unfair and deceptive acts and that misled people into providing their personal insurance information. Protecting consumers from such tactics and unethical practices is a high priority of this office."
Links to the complaint and consent judgment are below.
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New Hampshire Department of Justice | 33 Capitol Street | Concord, NH | 03301