Benefits management company CareCore National LLC is agreeing to pay $54 million to settle various claims of Medicare fraud. These allegations of Medicare fraud stem from claims of the company falsifying medical necessity verifications for the treatment of its patients on Medicare Advantage and Medicaid.

The whistleblower claimant is suing the company over allegations of Medicare fraudunder the False Claims Act, with the U.S. Department of Justice participating in the investigation. The Medicare fraud allegations reportedly arise out of at least 200,000 faulty authorizations performed by CareCore National LLC, now known as EviCore Healthcare, from 2005 to 2013.

As part of the Medicare fraud settlement deal, the company “admitted and accepted responsibility” for the alleged falsification of the reports.

Overview of Medicare Fraud Allegations

According to legal documents, CareCore had signed off on millions of earlier authorization forms since 2005 as a contractor for insurance companies that provide for Medicaid Advantage and Medicaid recipients. However, CareCore reportedly did not have the resources to sufficiently examine all of the reports, which reportedly resulted in corporate policy “padding.”

This refers to automatically approving some of prior authorizations, without actually reviewing whether or not the services should be compensated by Medicare Advantage or Medicaid. The padding policy stated “detailed training materials and daily reporting of the number of padded requests to high-level executives.”

The policy also states that if the prior authorizations surpass a manageable level, managers would reportedly order other employees to approve the authorizations “without obtaining or considering any new medical information.”

Essentially, CareCore allegedly conducted shortcuts to verify all these authorizations in a timely manner, which led to the alleged Medicaid and Medicare fraud allegations. According to whistleblower attorneys involved in the Medicare fraud investigation, CareCore had “blindly approved hundreds of thousands of medical procedures over a period of many years, leaving Medicare and Medicaid to foot the bill.”

This Medicare fraud whistleblower lawsuit was filed by former CareCore employee John Miller, who worked as a nurse and conducted some of the prior authorizations.

Miller will receive $10.5 million for his role as the whistleblower in this Medicare fraud investigation, which is typical as whistleblowers are normally awarded 15% to 30% of any award the whistleblower lawsuit may recover.

It is important to note that prior authorizations have play vital roles in earlier whistleblower lawsuits, including a 2014 settlement that involved in a specialty pharmacy that had allegedly lied to insurance companies to gain prior authorizations.

This Medicare Fraud Whistleblower Lawsuit is U.S. ex rel. Miller v. CareCore National LLC et al., Case No. 1:13-cv-01177, in the U.S. District Court for the Southern District of New York.