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RBM Company Loses $40 Million MRI Lawsuit

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A U.S. District Court jury in New York has convicted the radiology benefits management (RBM) company CareCore National of conspiring to restrain trade and of harming several New York State radiology practices and thousands of their patients. The case resulted from refusals by CareCore to authorize stand-up MRI at the plaintiffs’ practices.

The jury assessed damages of $11.7 million. New York antitrust law requires that the damages be tripled and that CareCore pay all attorneys’ fees. The total cost is estimated to approach $40 million.

Don Ryan, CareCore’s chief executive officer and chairman of the board, said the company will appeal. “We continue to believe that we acted properly, in compliance with the law, and in the interest of quality, cost-effective health care,” he said, as quoted by Health Imaging News. CareCore has offices in New York, South Carolina, and Colorado.

The plaintiffs were a group of New York City-area radiology practices and their medical management company. They alleged that CareCore had violated antitrust law by instigating a boycott on the part of insurance providers against the radiology practices. The patients in question were referred for stand-up MRI so that they would be in the weight-bearing positions that brought on their symptoms, such as back pain.

“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,” said the plaintiffs’ lead attorney, Matthew Cantor.

The plaintiffs said CareCore’s refusal to authorize stand-up MRI was an anticompetitive measure. CareCore is partly owned and operated by other New York-area radiology practices. Said the lawsuit, “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 said the case had broad implications regarding conflicts of interest. “The evidence in this case showed that even CareCore considered the upright MRI to be medically necessary,” he said, as quoted in a news release from his law firm, Constantine Cannon LLP of New York and Washington, DC. He added:

The actions of benefits managers that are owned and controlled by physicians, like CareCore, must be scrutinized to ensure that patient welfare is not compromised.

Related seminar: Neuro & Musculoskeletal Imaging (new release)

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