CareCore Agrees to Pay $54 Million For Fraudulent Insurance Claims

In 2017, CareCore National, LLC agreed to pay $54 million to the U.S. Department of Justice to settle a lawsuit filed under the False Claims Act. CareCore was alleged to have fraudulent authorized thousands of unnecessary and inappropriate diagnostic tests to be billed to government insurance programs.

Health benefits management company, CareCore was contracted to perform prior authorization review for diagnostic procedures such as X-rays and CT scans for insurance companies. Some of their clients included insurance companies which worked with government plans through Medicare Part C and Medicaid Managed Care. Between 2005 and 2013, CareCore is said to have authorized over 200,000 diagnostic procedures which had not been properly reviewed and were unnecessary or inappropriate.

CareCore PAD Program

On May 11, 2017, the U.S. Department of Justice (DOJ) announced that CareCore had agreed to pay $54 million to settle a healthcare fraud whistleblower lawsuit.  According to DOJ records, CareCore was reportedly unable to meet timely prior authorization review deadlines and instituted a practice of fraudulent authorization in order to avoid contract penalties and fines. By 2007, the practice was so common that it was formalized into a practice known as the Process As Directed or “PAD program” which was documented and included in training practices.

Daily reviews of pending authorization requests prompted high-level executives to direct certain clinical reviewers to approve cases without further consideration in order to keep approval times low. As CareCore had contracted their services based on assurance that medical review would be complete and appropriate before services were authorized, the program resulted in 200,000 to 300,000 false claims.

CareCore DOJ Agreement

AS part of the settlement reached with the U.S. Department of Justice, CareCore agreed to pay $54 million to settle both federal and state False Claims Act violations. Of the amount to be paid, $45 million will be paid to the United States and the remaining $9 million goes to various state governments.

CareCore agreed to admit and accept responsibility for the claims in the lawsuit regarding fraudulent claims approvals and improper procedures. In 2015, CareCore was rebranded as part of eviCore Healthcare.

The Whistleblower Lawsuit

Seeger Weiss LLP represented whistleblower John Miller, a licensed nurse, who filed the qui tam lawsuit against his previous employer, CareCore. He had been employed as a clinical reviewer but had been instructed to fraudulently approve diagnostic test requests without proper review.

Whistleblowers may receive a percentage of settlement agreement. In addition to the incentive to “do the right thing”, the government allows for compensation to be awarded to the whistleblower. This amount, usually 15-25% will help offset any damage that may be done to a whistleblower’s financial status or compensate for lost employment and other costs.

Due to filing the qui tam lawsuit based on the False Claims Act, Miller may be eligible for up to $10.5 million, however he has been required to participate in the process and wait for an outcome to the case.

The False Claims Act helps the government recover money wasted in fraud but in many cases, it requires a whistleblower to come forward. The healthcare industry is a leading area for fraud and one of the largest industries in which the False Claims Act can be used to reduce government waste.

Seeger Weiss is a leader in qui tam “whistleblower” legal matters including False Claims Act litigation. If you know of fraudulent Medicaid or Medicare billing practices, speak to an attorney experienced in whistleblower lawsuit.

Sources:

CareCore $54 Million Civil Fraud Settlement, United States Department of Justice, Southern District of New York (5/2017)

$54 Million Settlement Resolving Whistleblower Claims Against CareCore National LLC Announced, PR NewsWire (5/2019)

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