Feds charge pain clinic chain's owner in $38M billing fraud case

The owner of a Tennessee-based pain clinic chain and three employees have been charged with conspiracy to commit healthcare fraud and several counts of healthcare fraud for allegedly submitting $38 million in fraudulent claims government payers, according to the Department of Justice.

Michael Kestner, owner and CEO of MedManagement and majority owner of Pain MD, which operated clinics in Tennessee, Virginia and North Carolina, was charged in a 16-count superseding indictment unsealed Oct. 15. Pain MD President Brian Richey and two other employees were also charged.

From 2010 through May 2018, the defendants allegedly took several steps to get medical professionals employed by Pain MD to provide more services, even when additional services weren't medically reasonable or necessary. The defendants allegedly paid productivity-based bonuses to providers, locked providers into legally questionable employment agreements and threatened providers who had low productivity numbers with termination and other consequences, according to the Justice Department.

Mr. Richey and the two other employees allegedly gave patients tendon origin injections and durable medical equipment that wasn't medically necessary and then submitted fraudulent claims to government payers. "These services were provided to further the company's business model by increasing revenues for Pain MD and to personally enrich Pain MD providers," the Justice Department said in a news release.

If convicted, the defendants face up to 10 years in prison and a $250,000 fine on each count.

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