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CareCore strikes deal with NY AG

by Sruthi Valluri, DOTmed News | February 09, 2011
The radiologist owners of CareCore National, an embattled benefits management company, have been forced to sell their stake in the firm after it struck a deal with the New York attorney general.

CareCore National said in December it will change how it operates in response to the attorney general's investigation into the firm's practices and compliance with state law.

The attorney general's office received complaints that CareCore refused to contract with physicians and physicians groups, and protected the interests of a group of Long Island radiologists who co-own the company.

CareCore manages health insurance plans for companies like Aetna Health Inc. and Oxford Health Plans. The company also manages networks of radiologists in New York and New Jersey that provide outpatient radiology treatments.

CareCore's CEO and Chairman Donald Ryan signed the Assurance of Discontinuance with New York's Executive Deputy Attorney General for Economic Justice Maria Vullo on Dec. 20. In compliance with the agreement, CareCore will buy out radiologists with stakes in the firm and revise its contracting policies with physicians in the state.

According to the company, however, entering an agreement with the attorney general is a "positive step" for the firm, not an admission of wrongdoing. "The New York attorney general's office made no finding that CareCore violated any law," said Kevin Ryan, a spokesman for Bluffton, S.C.-based CareCore.

The agreement was signed only a month after a jury awarded $11 million against CareCore in an antitrust lawsuit. The lawsuit was filed by Stand-Up MRI, a radiologist group that provides Upright MRI services.

Constantine Cannon, LLC, the firm representing Stand-Up MRI, issued a statement that CareCore "conspired to unreasonably restrain trade in the market" for outpatient radiology treatments by protecting the individual practices of radiologists who co-own the company.

Matthew Cantor, lead attorney for the plaintiffs, pointed to CareCore's agreement with the attorney general as evidence of the "propriety of the jury verdict" and further support for Stand-Up MRI's position in upcoming appeals.

According to CareCore, however, the agreement does not reflect on the antitrust lawsuit appeals. "CareCore did not admit to any wrongdoing in the agreement," said Ryan, adding that the agreement is part of the firm's evolution that began in early 2005.

The company is appealing the antitrust lawsuit, which is estimated to reach a total judgment of $40 million including attorney fees and costs. "We will pursue all available appeals and are confident that we will ultimately prevail," Ryan said.

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