N.Y. RBMs conflict of interests lead to $40M fine
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The plaintiffs, a group of N.Y.-area radiology practices and their medical management company, alleged that CareCore National had violated antitrust law by instigating a boycott on the part of large insurance providers against the radiology practices. The plaintiffs, represented by the law firm Constantine Cannon, claimed that CareCore prevented thousands of patients from receiving standup MRI exams at the plaintiffs' practices as an anti-competitive measure. CareCore is partly owned and operated by other, ostensibly competing, N.Y.-area radiology practices.
After a two-and-a-half week trial commencing on Nov. 1, the jury sided with the plaintiffs, finding CareCore guilty of state and federal antitrust violations in excluding the patients from the procedures, assessing damages of $11.7 million dollars. In accordance with N.Y. antitrust law, these reparations will be tripled and will include all attorneys' fees, estimated to cost CareCore nearly $40 million in total.
"The patients were harmed because they were not able to access the upright MRI technology and would have had to pay hundreds if not thousands of dollars out of their own pockets," the plaintiffs' lead attorney, Matthew Cantor, of Constantine Cannon told Health Imaging News. "We argued that there was a substantial amount of patient harm, and it appears that the jury agreed."
The patients were referred for standup MRI as a means of scanning patients in weight bearing positions in which they feel the symptoms for which they are seen, as in cases of back pain. In convicting CareCore of conspiracy to unreasonably restrict trade in the market for commercially-insured outpatient radiology procedures, the jury affirmed that Carecore's antitrust violations had harmed patients by effectively preventing them from undergoing the standup MRIs.
The jury further convicted CareCore and its radiologist owners of conspiracy to boycott plaintiffs and other providers of upright MRI scans from becoming participating network providers for the larger insurance companies. According to a statement released by Constantine Cannon, "The purpose of the alleged conspiracy was to shield CareCore owner radiology practices from competitive threats, such as those posed by plaintiffs, that would have diminished the profitability of their individual medical practices."
Cantor heralded the verdict as a victory for both the practices and patients. "The decision is beneficial not only to our clients but to the thousands of patients that were denied or were not able to readily access upright MRI technology."
Cantor further highlighted this case as "an exemplar" of RBMs that may represent conflicts of interest and ultimately harm the care that patients receive. "You have to ask whether the insurance network is being limited in a fashion that will ultimately be to the detriment of patients," Cantor explained. "Secondly, the RBMs that are controlled or influenced by radiologists in the market create a conflict of interest. That was the issue, the radiologists owned the RBM, the gatekeeper that was making these insurance network decisions.
"In this new world of healthcare reform ... that [conflict of interests] will be something that government enforcers are going to have to be very cognizant of," Cantor signaled.
In a comment submitted by CareCore's CEO and Chairman of the Board, Don Ryan said that "CareCore is very disappointed in the jury verdict that was issued on November 30th. 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."
Cantor acknowledged that "there are still some major battles to be fought here," but said the decision was "obviously a major victory."