Medical waste firm Stericycle Inc. has agreed to pay $2.4 million for improperly overcharging nearly 1,000 New York government entities.

New York Attorney General Eric Schneiderman said in a news release that since 2003 the Lake Forest, Ill.-based Stericycle implemented a plan to charge automated prices increases without giving notice to customers and in violation of contract terms. The public entities included police and fire departments, rescue squads, schools, jails and hospitals throughout the state.

Stericycle declined to comment on the settlement.

Each impacted government entity will receive a check from Stericycle covering the entire overcharged amount, more than $820,000 in all. The medical waste firm also agreed to discontinue automated price increases to all entities covered by the accord and provide notice and opportunity to opt-out before any future rate increases occur.

“Stericycle improperly profited by overcharging New York taxpayers,” Schneiderman said. “In these times of harsh budget cuts to education, public health, and public safety, local governments and agencies need every available dollar, and we will hold accountable corporations like Stericycle that use cynical schemes to rip off New York taxpayers.”

The case originated in Chicago with a complaint by a former Stericycle employee, Jennifer Perez, filed in federal district court. The investigation determined that Stericycle programmed its billing system to increase by 18 percent, an amount designed to go undetected by customers. While the plan was solely to increase revenue for the company, the attorney general’s office determined, employees were told to respond to any complaints about the higher rates that it was because Stericycle had incurred higher costs.