A Leominster, Mass.-based medical equipment company has agreed to pay $2.5 million to settle allegations it engaged in "unfair, deceptive and abusive debt collection practices" and improperly collected money from beneficiaries of the state's Medicaid program.
Regional Home Care allegedly used 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, according to a Feb. 16 news release from the Massachusetts attorney general's office.
The company also allegedly filed more than 13,000 debt collection lawsuits against consumers in the Leominster District Court, despite 99 percent of those sued neither residing in the district nor having their Regional Home Care contracts executed there, according to the release. The attorney general's office said this practice allowed the company to obtain judgments more easily against consumers who were unable to travel to contest their cases.
Regional Home Care will pay $500,000 to the state of Massachusetts and is required to vacate every consumer judgment it obtained against consumers who lived outside the district, according to the release. In total, $2.1 million worth of judgments are expected to be vacated. The company will be required to refund MassHealth consumers more than $9,000.