Leominster, Mass.-based Regional Home Care Inc, a medical equipment supplier that sells and rents equipment including CPAP devices, has agreed to a $2.5 million settlement with the Massachusetts Attorney General’s office to resolve allegations that the company improperly collected money from members of MassHealth, the state’s Medicaid program.
As part of the settlement, Regional Home Care will refund MassHealth members, vacate millions in judgments against consumers, and reform its debt collection practices.
“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,” says attorney general Andrea Joy Campbell in a press release. “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 Attorney General’s Office also alleges that Regional Home Care filed over 13,000 debt collection lawsuits against consumers in the Leominster District Court, despite 99% 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 also 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 and 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.
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.