Bone marrow settlement
6:02 pm
Thu February 2, 2012

State Wraps Up Bone Marrow Investigation: Slams UMASS Memorial

A little over a year ago, a Massachusetts bone marrow registry made headlines for hiring models in blue wigs and black skirts to attract prospective donors.  To make matters worse,  the registry was part of a scheme to charge insurance companies extremely high fees for lab tests.

Both New Hampshire and Massachusetts launched investigations of UMASS Memorial Health Care, the home of the registry and the testing lab, for deceptive practices.  Today, they announced a settlement involving hundreds of thousands of dollars.  But individuals touched by the scheme sense the hospital largely got off scott free.

When it came to recruiting donors, the UMASS Memorial Laboratories and the Caitlin Raymond International Registry poured it on.  In addition to using models, they raffled off flat-screen TV’s, golf clubs and big riding lawn mowers.  And the way they paid for all this left Senior Assistant Attorney General Jim Boffetti more than little incredulous.

“How do you justify, a test that costs approximately $50, how do you justify charging $4,300?”

The New Hampshire Attorney General’s Office charged the hospital system with deceiving the public in violation of the Consumer Protection Act.  At a news conference, Attorney General Michael Delaney spoke bluntly about UMASS Memorial.

“They lost focus of their charitable mission to save lives and they became blinded by the pursuit of money and financial gain.”

The gains were impressive.  The UMASS Memorial operation netted about 25 million dollars in profits for the hospital system. 

The settlement today puts an end to the models and raffles.  It puts a hard cap on the testing fee.  It imposes stringent recruiting  practices going forward.  And UMASS Memorial will pay the state $250,000 in costs and civil penalties.  Plus, it will donate $100,000 to the National Marrow Donor Program to help restore the image of bone marrow registries.  In Massachusetts, UMASS will pay about half a million dollars.

Hospital officials declined to be interviewed.  In a statement, they said they broke no laws and did no one any harm.  CEO John O’Brien said “We accept full responsibility for the mistakes and errors of judgment that were made.”

For Jacqueline Hart, a bone marrow recipient and former worker at the Caitlin Raymond registry, that fell far short of what she expected.

“They won’t come clean and say what they did was wrong and how they tarnished the reputation of a bone marrow registry.”

Manchester Mayor Ted Gatsas was first to call attention to the high testing fees when city workers saw the charges on their insurance statements.   Gatsas disputes the UMASS claim that it did no harm.

“They hurt the people who shouldn’t have been hurt this whole discussion and that’s the people who were looking for bone marrow transplants.  That’s who they hurt.”

The scandal put a major dent in donor recruitment across New England.  Some drives were cancelled.  Managers of other registries say participation fell off at least 25%. 

New Hampshire officials say the money in the settlement will make the state whole.  In addition, at least one insurance company, Blue Cross Blue Shield of Massachusetts, successfully won millions of dollars in concessions from UMASS Memorial.

Still, Marc Ferland, who joined the Caitlin Raymond registry and saw a sizeable charge to his personal insurance account, thinks UMASS Memorial basically took the money and got to keep it.

“For a highly lucrative industry, it’s a slap on the hands for UMASS.”

Perhaps, but right as the legal settlements came to light, UMASS Memorial announced it was selling its laboratories division as part of a move to close a 50 million dollar deficit.   If the settlement didn’t shake up the hospital complex, the investigations might have   Donor recruitment and related testing fees largely shut down for the entire year blowing a 25 million dollar hole in the overall budget.

Hospital officials say the sale of the lab has no connection to the bone marrow donor scandal.