UMass Testing Business Fined $520K For Marrow Donor Practices
UMass Memorial Health Care (UMMHC) will pay a $520,000 fine for improperly marketing and administering bone marrow donor testing services, Attorney General Martha Coakley's office said today.
Coakley said UMass subsidiary Caitlin Raymond International Registry and UMass Memorial Health Ventures (UMMHV), a testing services arm of the UMass health care system, paid fashion models to help recruit potential registrants for a bone marrow donor drive at malls, sporting venues and other sites beginning in 2007.
Coakley alleged that in addition to using paid models, the registry and the health ventures group improperly waived copayments and deductibles for those tested, gave away free t-shirts and sweatshirts, and incentivized staff through bonuses to recruit potential donors who had health insurance.
UMass labs performed most of the DNA tests that resulted. The health ventures group performed 40,000 such tests in 2010 compared to 7,000 the year before.
CRIR and UMMHV also failed to disclose to the registrants their working relationship, the amounts the registrants could be obligated to pay, or the amounts billed to health insurance plans for the tests, which ranged from several hundred dollars to $4,000.
UMass CEO John G. O'Brien said recently that executives are trying to sell some parts of the health ventures group, which underperformed in the most recent fiscal year.
O'Brien said in a statement today that UMMHC accepts "full responsibility for the mistakes and errors in judgment that were made."
UMass Memorial "expressly denies that any of its practices violated any laws or caused harm to any person," the statement said.
Douglas Brown, senior vice president and general counsel at UMMHC, said the system "regrets that past practices may have undermined the public perception of the life-saving importance of donor recruitment."
He said 48 patients received transplants in the past year as a result of the registry's recruitment efforts.
Brown added that reimbursement rates for the tests were negotiated directly with most insurers, just like they are for other tests and procedures. He said UMass executives recognize that the rates were perceived as inappropriate.
Coakley said the two organizations cooperated with the investigation, and the registry has already refunded nearly $100,000 to consumers and several times that to reimburse health insurers.
Under the final judgment, UMass health ventures will not charge health plans more than $175 over the next five years for donor testing, will pay $500,000 to the state for programs designed to improve health care services and combat unlawful marketing practices, and will pay $20,000 for the cost of the investigation.
The judgment also prohibits the groups from using paid models to increase donor registration and requires them to give donors more information about the fees that will be charged to their insurers.
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