Within a month after an $11 million antitrust verdict was handed down against radiology benefits management firm CareCore National, the company has entered into an agreement with the New York attorney general under which radiologists who own stakes in CareCore are to divest their interests.
Dated December 20, the "assurance of discontinuance agreement" states that "CareCore shall undertake best efforts to purchase at fair market value ... the full ownership interest of each CareCore owner ... including any CareCore Member who is a radiologist actively practicing in New York." The agreement was disclosed in court papers related to the original antitrust suit.
In November, a jury in the U.S. District Court for the Eastern District of New York found against CareCore of Wappingers Falls, NY, in an antitrust suit filed by Stand-Up MRI, a provider of upright MRI services, and Health Diagnostics. The groups charged CareCore with conspiring to unreasonably restrain trade in the New York-area market for commercially insured outpatient radiology procedures, denying the groups access to thousands of patients.
CareCore is used by most insurers in the state of New York, including UnitedHealthcare, Oxford Health Plans, and Aetna.
Although the agreement between CareCore and the New York attorney general is a step in the right direction, it doesn't address the real harm that has come to patients who have been denied access to care, said Matthew Cantor, the plaintiffs' counsel at law firm Constantine Cannon in New York City. A formal, binding injunction from the court is still needed.
"The November verdict had a tremendous effect on the New York attorney general," he said. "We want [CareCore] to stop engaging in anticompetitive practices, and this agreement helps to get rid of conflict of interest going forward. But it doesn't address the proven harm that has been caused to patients who have been unable to access MRI technology."
The deal is part of CareCore's transition to a new business model that began in late 2005, and is a positive step for the company, according to Michael Joslin, executive vice president of sales and marketing at CareCore.
"The agreement with the attorney general will complete CareCore's transition to a business model that reduces the role of practicing radiologists who founded the company solely to clinical issues, while eliminating any role they may have had in governance," Joslin told AuntMinnie.com via e-mail. "It reflects the greater size, growth, and complexity of CareCore's business and its confidence that its operations may be overseen entirely by professional management."
CareCore will continue to provide the same benefit management services that it has been providing, without material changes in operations, according to Joslin. The company did not admit any wrongdoing in the agreement, and the New York Attorney General's Office made no finding that CareCore violated any law, he said.
By Kate Madden Yee
AuntMinnie.com staff writer
February 4, 2011
