UMass Memorial to pay $520,000 to settle complaint over improper recruitment of bone marrow donors

By Liz Kowalczyk, Globe Staff

UMass Memorial Health Care, which hired models in short skirts to lure potential bone marrow donors and then charged insurers high fees to test samples, will pay $520,000 as part of an agreement with Attorney General Martha Coakley’s office.

The attorney general, who filed a complaint and final judgment in Suffolk Superior Court today, said in a written statement that the Caitlin Raymond International Registry and UMass Memorial Health Ventures, Inc. -- subsidiaries of the hospital network -- jointly engaged in improper marketing by paying fashion models to recruit potential donors at malls, festivals, and sports venues including Foxboro Stadium.

The number of donor tests performed by UMass Memorial increased significantly from 7,000 in 2008 to more than 40,000 in 2010, and the amount the organization charged insurers for individual tests ranged from several hundred dollars to more than $4,000, the attorney general’s office said. Some donors also received large bills.

The complaint said that UMass Memorial improperly gave away “tokens of appreciation” such as free T-shirts and sweatshirts; gave staff bonuses for targeting insured individuals for testing; and failed to disclose to potential donors the amount billed to health plans and the amount they may have to pay out of pocket.

“Efforts to increase bone marrow donor registration cannot be built on unfair and deceptive practices that increase the cost of health care for all of us,” Coakley said in the statement. “No health care provider should be allowed to use gimmicks and free gifts to increase the volume of services covered by health plans for their own financial gain.”

UMass Memorial agreed to repay Massachusetts consumers for any money they spent for donor testing, and will not charge health plans more than $175 for each test over the next five years.

While UMass Memorial officials deny breaking the law or harming anyone, they said they have changed their practices and have continued to match donors with recipients. Forty-eight patients received transplants from donors in the past year as a direct result of past recruitment efforts, Douglas Brown, senior vice president and general counsel of UMass Memorial Health Care, said in a written statement.

Chief Executive John O’Brien said: “We accept full responsibility for the mistakes and errors in judgment that were made. We are pleased to have reached a resolution with the Massachusetts Attorney General that validates the important work of the Caitlin Raymond International Registry.”

Brown said that in April 2011, the registry was re-accredited for a four-year term by the World Marrow Donor Association.

Liz Kowalczyk can be reached at kowalczyk@globe.com.