A.G. Schneiderman Announces Joint $54 Million Settlement With CareCore Resolving Allegations Company Submitted Millions In False Claims To Medicaid

 News from Attorney General Eric T. Schneiderman

May 11, 2017

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NYs Medicaid Program To Receive Over $7.6 Million In Restitution As Part Of Joint State-Federal Settlement

NEW YORKAttorney General Eric T. Schneiderman announced today that New York, along with 20 other states, has reached an agreement in principle to join the federal government in a settlement with CareCore National LLC (CareCore), now part of eviCore healthcare that was unsealed today. CareCore provides utilization management services including determinations of medical necessity to New York Medicaid Managed Care Organizations (MCOs).  The agreement settles allegations that CareCore instituted a scheme to auto-approve or Process As Directed (PAD) hundreds of radiology service requests on a daily basis, deeming those diagnostic services as reasonable and medically necessary, even though there had been no evaluation of those cases by the appropriate medical personnel. CareCore will pay the federal government $54 million, of which $18 million will go to the state Medicaid programs, to resolve allegations that CareCores fraudulent PADprogram caused false claims to be submitted to government health care programs. Of the $18 million, New Yorks Medicaid Program will recover over $7.6 million.    

 Companies that overbill Medicaid are undermining efforts to help some of our neediest citizens. Since 2011, my office has secured over $1 billion in restitution for Medicaid, and we will continue to vigorously safeguard the integrity of this incredibly vital program, said Attorney General Schneiderman

Specifically, the agreement in principle resolves allegations that from January 1, 2005 through June 13, 2013, CareCore developed and implemented the PAD program through which CareCore improperly approved over 200,000 prior authorization requests which CareCore initially determined could not be approved based on the information provided.  The states settlement in principle mirrors the federal settlement agreement regarding CareCores conduct that is the subject of the settlement. The federal settlement agreement was filed in federal court and contained CareCores admissions and acceptance of responsibility for conduct including: 

  • Starting in at least 2007 through June 13, 2013, CareCore developed the PADprogram, and thereafter the PADProgram consisted of its Clinical Reviewers improperly approving certain prior authorization requests awaiting physician review on the Medical Queue without having obtained any new objective medical information about the requests, and without a Medical Director having independently reviewed the prior authorization requests. 
  • From 2007 through June 13, 2013, these paddedrequests were then transmitted to CareCores client insurers, including MCOs, as preauthorized requests.  
  • From 2007 through June 13, 2013, when CareCore approved these padded requests, CareCore made a representation that it had appropriately reviewed the requests when it knew it had not. Thus, those padded requests incorporated CareCores false representation that it had approved a case after completing the required review process.

The settlement in principle resolves claims that CareCore auto-approved the requests in an effort to keep up with the volume of preauthorization requests for diagnostic radiology services and to avoid a contractual monetary penalty per case for untimely reviews.  The settlement in principle also resolves claims that this practice caused false or fraudulent claims to be submitted to and reimbursed by the States Medicaid program, including through its contracted MCOs, for diagnostic procedures that were not properly authorized as medically reasonable or necessary in a manner consistent with the policies and procedures set forth by New Yorks Medicaid program and its contracted MCOs, using federal and state funds provided through Medicaid Managed Care.  

The settlement in principle resolves allegations asserted in a qui tam action brought by a whistleblower in the United States District Court for the Southern District of New York. A multi-state team, which included New Yorks Medicaid Fraud Control Unit, participated in the investigation and conducted the settlement negotiations with CareCore on behalf of the states. The team also included representatives of the Florida, Georgia and Ohio Medicaid Fraud Control Units. The states coordinated their investigation in conjunction with the U.S. Attorneys Office for the Southern District of New York. 

Working on the investigation for New Yorks Medicaid Fraud Control Unit were Senior Auditor Investigator Matt Tandle, Principal Auditor Investigator Theresa A. White, and Special Assistant Attorneys General Diana Elkind and Gerri Gold. Carolyn Ellis is the Chief of the Civil Enforcement Division. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney.