Class Action Lawsuit Filed Against Health Matching Account Services – Houston Public Media

A federal class action lawsuit was filed Friday against Houston-based Health Matching Account Services (HMA), alleging it deprived clients of tens of millions of dollars for allegedly breaching its own contract.

According to the lawsuit filed in the Southern District of Texas, the HMA functions as a pseudo-health savings account without traditional tax benefits. Typically, a savings account allows users to deposit pre-tax funds to be used for health-related purchases that are not covered by health insurance. The lawsuit alleged that HMA charged users a monthly fee – allegedly more than the average savings account amount – to manage the account and a monthly after-tax contribution in exchange for HMA matching the contributions made by consumers.

However, HMA is accused of operating a business model that allegedly only turns a profit when consumers do not pay monthly fees. According to the lawsuit, HMA seizes the full amount of the account if the user fails to pay the required fee and monthly dues.

The lawsuit, which seeks $50 million in damages, also alleges that HMA changed the terms of its contract with customers to increase profits.

“Starting in the fall of 2022, HMA began making a series of radical and unpredictable changes to its business model, ultimately shifting the service from an easy-to-use debit card to requiring customers to self-apply for approval and later requiring unsuspecting healthcare providers to negotiate payments with HMA, modeled on an insurance company,” the court claims.

The company and its owner Elliott Gorog declined to comment Friday.

The Better Business Office rated HMA an F and has received over 100 complaints about it over the past three years. On January 31, the office’s management revoked HMA’s accreditation due to failure to comply with the office’s requirements.

According to the office, the company failed to:

• “Resolve disputes submitted by BBB promptly and in good faith.”
• “Collaborating with BBB in Efforts to Eliminate the Root Cause of Customer Complaint Patterns”
• “All business transactions, market transactions and obligations must be approached honestly, in good faith and with the intention of doing what can reasonably be expected.”

The class action lawsuit was filed by Alexander Loftus of Loftus & Eisenberg, LTD in Illinois and James Crewse of Dallas-based Crewse Law Firm, PLLC.

Loftus said Houston Public Media he learned of HMA’s existence after a former customer informed him of the company’s alleged business practices and directed him to a group of dissatisfied HMA customers on Facebook.

“About two months ago, I was contacted by an existing client who was a victim of a Ponzi scheme case I was handling,” Loftus said. “It immediately became clear that this was a uniform problem that he was suffering from. (…) I found a group about it on Facebook, and then I found a lot of other complaints on the Internet.”

According to the lawsuit, HMA would allegedly make partial payments on its clients’ claims but would still withdraw the full amount from their accounts. The lawsuit alleges that if full payments are not received, health care providers will seek full payment directly from the customer, even though HMA has already withdrawn money from their account.

Since learning of the allegations against HMA, Loftus said he has been contacted numerous times by former HMA clients.

“I talk to these people and they are all over the South. … So all the people in the South who have suffered major financial losses are calling me like crazy,” he said. “I’ve never seen anything like it and I’ve been looking for something like it because (savings accounts) everyone has them, but I’ve never seen anything like it.”

According to the lawsuit, which cites an alleged 2022 Zoom call with brokers in which company owner Gorog said HMA had 52,000 customers actively using the services and paying monthly fees.

Loftus said HMA’s case is unique.

“It’s weird because it’s not really insurance, it’s not an investment, it’s something in between,” he said. “A lot of it is very similar to the work we do with Ponzi schemes, and that’s what’s attractive about it because I can apply my knowledge to it.

“It’s difficult for law enforcement because the (Securities and Exchange Commission) isn’t interested because it’s not an investment or a security,” Loftus added. “Insurers aren’t interested because it’s not insurance, so it kind of defies regulation.”