The U.S. Department of Justice has reached a $54 million settlement with EviCore Healthcare (formerly CareCore National) regarding a whistleblower case against the firm for allegedly issuing preauthorizations improperly. The agreement settles charges that the firm authorized medical diagnostic procedures without properly assessing whether they were necessary or reasonable.
EviCore is a benefits management firm that provides preauthorization and precertification services for diagnostic testing. The company began operating as EviCore after CareCore merged with MedSolutions in December 2014.
In a press release, the U.S. Attorney's Office for the Southern District of New York stated that beginning as early as 2005, CareCore was unable to review prior authorization requests in a timely fashion, based on contractual metrics for turnaround times. To avoid contractual penalties, the firm allegedly began a practice of improperly approving prior authorization requests.
By 2007, CareCore had formalized the practice into what it called the "process as directed" (PAD) program, and between 2007 and 2013 CareCore improperly authorized more than 200,000 diagnostic procedures. As a result, the company's clients paid for diagnostic tests such as MRI and PET scans that had not been properly authorized as being medically reasonable or necessary, according to attorneys for plaintiffs in the case who filed litigation in 2013 in the U.S. District Court for the Southern District of New York.
The allegations were initially brought to the government's attention by a whistleblower who filed a lawsuit under the False Claims Act's qui tam provisions.
