LEOMINSTER — City-based medical equipment supplier Regional Home Care must pay $2.5 million over its debt collection practices and improperly charging MassHealth members, Attorney General Andrea Campbell announced Thursday.
Campbell’s office said the company had engaged in “unfair, deceptive and abusive” debt collection practices, which included not informing consumers of their legal rights to dispute and obtain validation of their debts and not informing consumers of their right to request the company not call their place of employment. Additionally, the company allegedly deceived consumers into believing non-payment of their debts would lead to a deferral to attorneys and debt collection agencies. The attorney general’s office said these practices violated state consumer law and debt collection regulations.
Additionally, Regional Home Care allegedly collected money from MassHealth, the state’s Medicaid program, for balances that were not owed or that had already been 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,” Campbell said in a statement. “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 attorney general’s office said Regional Home Care had filed over 13,000 debt collection lawsuits against consumers in Leominster District Court. According to Campbell’s office, these suits were filed despite the fact that 99% of the consumers did not reside in that court district or had their contracts with the company executed there.
This practice allowed Regional Home Care to obtain judgments more easily because lawsuit defendants were either unable to travel to court to defend themselves and others had to incur travel expenses and take time off from work to litigate their case, the attorney general’s office said. Additionally, Campbell’s office said it was illegal to seek these judgments in Leominster District Court as opposed to where the consumer resided or where the contract was executed.
Regional Home Care allegedly routinely sued MassHealth members for amounts not owed or amounts that had already been paid for by the state program. This included the costs of purchasing, renting and repairing some medical equipment. Additionally, the company allegedly charged MassHealth members for return shipping costs and court filing fees.
Medical equipment Regional Home Care supplies includes oxygen tanks and Continuous Positive Airway Pressure devices that are used to treat oxygen deficiency and sleep apnea.
As part of the settlement, Regional Home Care is required to vacate every consumer judgment it has reached in Leominster District Court, unless the consumer already resided in Leominster or the judgment has been satisfied. In total, the attorney general’s office said $2.1 million worth of judgments are expected to be vacated.
Additionally, Regional Home Care will be required to pay $500,000 to the state. An additional $9,000 is required to refund MassHealth consumers. Campbell’s office said consumers entitled to refunds do not need to take any steps. The company is also prohibiting from selling, transferring or collecting on the judgments.
The attorney general’s office also said the company must come into compliance with federal and state laws, change its business practices and reporting requirements. This will include filing lawsuits against consumers in their respective judicial district, making a minimum of three attempts to retrieve equipment or obtain payment before initiating litigation and not billing, collecting or attempting to collect or seek payment from MassHealth members for medical equipment or return shipping costs — even if the equipment is no longer being used and users have not returned it.