Long Island radiology group files antitrust lawsuit against CareCore National

May 20, 2008

Jericho Specialty Imaging, an imaging facility based in New Hyde Park, NY, has filed an antitrust complaint against CareCore National, a radiology management service company that contracts with major health maintenance organizations.

Jericho Specialty Imaging, an imaging facility based in New Hyde Park, NY, has filed an antitrust complaint against CareCore National, a radiology management service company that contracts with major health maintenance organizations.

The lawsuit is the latest in a series of accusations of unfair competition by other imaging facilities in the New York City metropolitan area.

CareCore National, which is owned by radiologists, entered into contracts with HMOs like Oxford, Aetna, HIP, and HealthNethealth. The company has used its prominence to favor radiologists who are CareCore National members and to exclude those who aren't, said Lloyd M. Eisenberg, a partner in the Eisenberg & Carton legal firm of Long Island, which is representing Jericho Specialty Imaging (JSI).

CareCore has told radiologists that there is no need for their services, only to let other facilities in the same area owned by CareCore members join into its network. This practice is in violation of New York and Federal antitrust and self-referral laws, Eisenberg said.

"The HMOs are probably acting in good faith and we are not blaming them," he said. "But it is clear to us that CareCore is using its position to preserve business for its own owner members through its relationship with the HMOs."

JSI specializes in pediatric imaging and serves patients with special needs. For example, children with certain brain implants who have to undergo MRI require the assistance of pediatric neurologists to handle these implants before and after the exam. According to owner Dr. Allen Rothpearl, JSI is the only facility in the area that provides this kind of service.

JSI gets its business mostly from referring physicians. Since CareCore has excluded JSI from most of the major insurance plans, it has forced JSI to provide services for free and at a substantial loss, Eisenberg said.

"If JSI stops taking any of the patients sent to them by referring physicians, they run the risk that those physicians will end up sending patients somewhere else," Eisenberg said.

JSI filed the lawsuit May 12 in the U.S. District Court for the Eastern District of New York.

"We had hoped that in time CareCore would change its position regarding our facility based upon the unique services we provide and our special equipment, but, unfortunately, this has not occurred," Rothpearl said.

JSI's claims raise significant issues of public interest, Eisenberg said. If CareCore is allowed to continue to exclude radiologists from its network that could hurt not only competition, but also the supply of specialized services and innovation, he said.

"I believe Dr. Rothpearl's case is unique because he's offering specialty pediatric services that nobody else is providing," Eisenberg said. "He's not even in head-to-head competition with the CareCore members. He's offering a service that is different, and they're still not letting him in."

New York radiology firms Park West Radiology, Alpha Imaging Consultants, Medical Diagnostic Imaging, and New York Medscan have also filed antitrust lawsuits against CareCore National. The basis for their respective complaints are similar, Eisenberg said.

"I reviewed those other complaints and asked permission to borrow from one of them for use on behalf of JSI with respect to antitrust practices," he said.

CareCore National did not respond to Diagnostic Imaging requests for comment.

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