A New York jury has awarded $11 million in damages to radiologists who filed an antitrust lawsuit against benefits management firm CareCore National of Wappingers Falls, NY.
The verdict was reached November 30 in the U.S. District Court for the Eastern District of New York. After a two-week trial, the jury awarded more than $11 million in damages to the plaintiffs in the case, which are to be trebled by law. The total judgment, with costs and attorneys fees, is expected to be close to $40 million, according to a statement by the plaintiffs' law firm Constantine Cannon.
CareCore is a benefits management company used by most insurers in the state of New York, including UnitedHealthcare, Oxford Health Plans, and Aetna. Radiologists not in CareCore's network claimed they were denied access to thousands of patients.
The case was filed by radiology groups Stand-Up MRI, a provider of Upright MRI services, and Health Diagnostics in July 2008.
The jury found that CareCore, in league with New York-area radiologists and radiology practices that owned and/or governed CareCore, conspired to unreasonably restrain trade in the market for commercially insured outpatient radiology procedures, according to the statement. The jury also found that these restraints harmed the plaintiffs -- several New York radiology practices and their medical management company -- that offer unique and medically necessary Upright MRI services.
The purpose of the alleged conspiracy was to shield CareCore owner radiology practices from competitive threats, such as those posed by the plaintiffs, that would have diminished the profitability of their individual medical practices. The plaintiffs claimed the alleged conspiracy harmed thousands of patients covered by these large insurance plans, who were effectively prevented from receiving Upright MRI scans.
The verdict has widespread ramifications for the healthcare profession, particularly in light of the health reform bill currently being implemented, according to Constantine Cannon. This case demonstrates that decisions on network formation or preauthorization of medical services by insurance companies or their benefits managers must be free of conflicts of interest or face the danger of violating antitrust law, the law firm noted.
"This verdict is not just important for my clients, but for patients everywhere," Cantor said. "The evidence in this case showed that even CareCore considered the Upright MRI to be medically necessary and that, nonetheless, CareCore and its owners denied patients the ability to benefit from these important diagnostic procedures. The actions of benefits managers that are owned and controlled by physicians, like CareCore, must be scrutinized to ensure that patient welfare is not compromised."
Constantine Cannon expects that CareCore will attempt to overturn the jury award either in post-trial motion practice or on appeal. If that occurs, the firm stated that it will vigorously defend the jury decision.
CareCore spokesman Don Ryan said in an e-mail that the company is "very disappointed" with the jury's verdict, adding, "We continue to believe that we acted properly, in compliance with the law, and in the interest of quality cost-effective healthcare. We will pursue all available appeals and are confident that we will ultimately prevail.”
Similar cases against CareCore are pending in New York, including an antitrust case filed by Jericho Specialty Imaging (JSI) of New Hyde Park, NY, in 2008. JSI's suit alleges that CareCore has refused to allow JSI into its provider network and has denied the facility access to Oxford, Aetna, Health Net, and HIP Health Plan of New York subscribers in the Long Island and greater New York area.
Related Reading
Date set for CareCore federal antitrust trial, July 23, 2010
CareCore settles with NY imaging firm, March 22, 2010
CareCore antitrust lawsuit gets trial date, June 18, 2009
CareCore endorses Image Gently campaign, November 12, 2008
Antitrust: Achilles' heel of radiology benefits management companies? July 22, 2008
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