Seeger Weiss, with Milberg LLP, represented the relator in a healthcare fraud whistleblower action against CareCore National LLC. The company, headquartered in Blufton, SC, provides pre-authorization/pre-certification services for diagnostic testing to ensure that only medically reasonable and necessary tests are performed on patients and paid for by insurers.
The whistleblower, a licensed practical nurse, alleged that CareCore trained its nurse employees to violate its own protocols that were supposed to ensure that its customers pay only for diagnostic testing that is medically reasonable and necessary. Specifically, under CareCore’s stated protocol, nurses were required to refer pre-authorization requests that failed to meet certain criteria to medical doctors for their review so the doctors could issue or deny the pre-authorization requests. These requests were required by CareCore’s customers – managed care organizations and other health insurers that provide services to the beneficiaries of government programs through Medicare Part C and Medicaid Managed Care.
Instead, due to critical time constraints required by its customers, CareCore directed its nursing staff to “Process As Directed” or to “PAD” certain of those cases that had been sent for a doctor’s review. For these “padded” cases, nurses were instructed to issue pre-authorizations for diagnostic testing even though the set criteria had not been met and the doctors had not conducted the required review. Thus, the managed care organizations and other providers, including those with which the government contracts, paid for diagnostic tests, like costly MRIs and PET scans, that were not properly authorized as being medically reasonable or necessary.
CareCore merged with MedSolutions, Inc. in December of 2014 and now operates as eviCore healthcare. CareCore provided these services around the country to managed care organizations and other providers, touting their services as cost control and reduction measures.
“Our client was deeply troubled by the wrongdoing that he witnessed and after a lot of soul-searching decided to come forward in order to end a practice that was not only wrong, but cost the U.S. taxpayers many tens of millions of dollars,” says his attorney, Stephen A. Weiss of Seeger Weiss. “It’s never an easy decision, but it’s a courageous and correct decision.”
In 2017, the U.S. Department of Justice, the United States Attorney for the Southern District of New York, and several state Attorneys’ General Medicaid Fraud Units reached a $54 million settlement. Of the $54 million recovery, $45 million will go to the federal government and $9 million will go to various participating states. Pursuant to False Claims Act provisions, the relator will be awarded approximately $10.5 million plus interest—or 20%—from the government’s combined federal and state recovery.