The Chicago law firm Loftus & Eisenberg filed a class action suit in Houston federal court alleging a health services account company has been stealing funds from HSA participants.
The lawsuit, Woodbright v. Health Matching Account Services Inc., alleges the company took tens of millions of dollars from consumers nationwide.
The 71-page complaint, comparing the terms of consumer contracts to actual performance, stated consumers were told they could draw on their funds using debit cards to pay medical providers and HMA promised to match the amount deposited provided customers agreed to pay a monthly fee to HMA.
In practice, the promised “match” was allegedly a “phantom,” and the defendant allegedly used a slew of hurdles and practices that were breaches of the contracts to avoid paying medical providers, the complaint asserts.
One catch in the terms is that if a consumer fails for any reason to make a monthly payment, HMA could keep the balance of the account, the suit claimed.
“HMA’s business model was only profitable if consumers defaulted on their monthly payments, this enabling HMA to confiscate the account balance,” the complaint alleges.
The five named plaintiffs allege that in late 2022 HMA unilaterally changed its rules by eliminating or materially reducing consumers’ access to their funds, making it more difficult to make a clam or receive reimbursement, and reducing the number of claims made.
Some evidence of HMA’s practices were exposed through Claims Choice, a Michigan-based third-party claims administrator that for a time was hired by HMA to handle claims, the suit alleges.
Choice Claims chief executive officer reported an Oct. 7, 2024 phone call with HMA’s owner, Elliot Grog, who is alleged to have said he hoped customers would stop paying because the claims process had been made so difficult, adding “HMA made over $20 million in revenue off of confiscating customers’ accounts.”
“Claims Choice was never paid for its work on behalf of HMA and Claims Choice commenced an arbitration seeking over $500,000 owed,” the complaint alleges.
In addition to allegedly confiscating funds belonging to the consumers, the complaint alleges HMA’s program was changed to require providers to submit claims for payment to HMA, rather than allowing consumers to pay medical providers directly with their debit cards, a breach of the contract, the complaint states.
“Many medical providers, including primary care providers, were unwilling to jump through hoops in hopes of receiving payment for services rendered from HMA, a non-insurance third party,” the complaint alleges.
In an effort to further increase customer attrition, class members’ medical providers who complied were rudely greeted with a fight over amounts charged, the complaint alleges.
Tactics HMA used to pad profits included making partial payments with a written waiver that the payment constituted acceptance of full and final payment. Meanwhile, HMA dedcuted from consumers’ accounts the full amount billed, “despite only making partial payment or making no payment at all to the providers,” the complaint alleges.
HMA also used the same accounting practices with participating pharmacies, the complaint alleges.
HMA has not yet answered the complaint in court, and HMA corporate did not respond to a Texas Lawyer request for comment by the publishing deadline.