New Hampshire Attorney General Michael A. Delaney and Massachusetts Attorney General Martha Coakley say the program overcharges donors for services and also uses questionable donor recruitment methods.
UMass Memorial reportedly charges insurance companies as much as $4,000 for simple blood tests that typically cost $100 or less. Mr. Delaney also said the system took advantage of state laws that required payors to pay for bone marrow testing. “Charging $4,300 for a test that costs $50 is an outrageous exploitation and distortion of that statute,” Mr. Delaney said, according to the report.
To draw in donors, UMass spent more than $50,000 per week on models to market the program. These models wore brightly colored wigs, short skirts, high heels and lab coats and were personally chosen from photographs by a UMass marketing director, who has not been identified by name.
“It seems the profit goal was the end game here,” Ms. Coakley said, according to the report.
UMass President and CEO John O’Brien issued a statement saying the system accepts “full responsibility for the mistakes and errors in judgment that were made,” according to the report. Despite that language, the settlement agreement still denies any wrongdoing on behalf of the system.
UMass has also struck separate and confidential agreements with payors to reimburse those companies that covered inflated testing bills, according to the report.
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