As part of the settlement, CARECORE must pay $54,000,000 to resolve both federal and state false claims act claims, the latter of which will be the subject of a separate settlement agreement between CARECORE and the states. In the settlement, CARECORE admits, acknowledges and accepts responsibility for the following conduct:

A. CARECORE provides services to health insurers, including managed care organizations that provide services to beneficiaries of the Medicare Part C and Medicaid programs (collectively, “MCOs”). CARECORE provides prior authorization services, which consist of screening prior authorization requests for certain procedures for medical reasonableness and necessity. During the times pertinent to this matter, CARECORE’s Clinical Reviewers, who generally were nurses, received information from the treating physicians and input that information into CARECARE’s proprietary software system. That software system, based on the information provided, either recommended approval of the prior authorization or recommended further review by a physician.


B. Under the applicable regulations and contractual provisions, if a plan decides to implement prior medical necessity review in order to cover physician-ordered services, only a physician or other appropriate health care professional with sufficient expertise has the authority to deny a procedure. Thus, if a prior authorization could not be issued based on the information currently supplied by the treating physician, the prior authorization request, including all of the related information, was placed in an electronic queue, the Medical Review Queue. The prior authorization request could be accessed in the Medical Review Queue by a CAERCORE Medical Director, who is a physician retained by CARECORE, who would review the information and determine whether to conduct a peer call with the treating physician or appraise information gathered after the initial request in order to determine whether prior authorization of the procedure was appropriate, or should be denied.

C. In order for the MCOs to meet timelines in the applicable regulations and/or pursuant to its contractual obligations and provisions, CARECORE was required to issue a determination on prior authorization requests within fixed time periods known as “Turn Around Times,” or “TATs”, often as little as 4 hours for urgent requests, and 48 hours for non-urgent requests. CARECORE was also subject to contractual monetary penalties if it failed to maintain performance standards, including meeting the processing deadlines set forth in the regulations and contracts.

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