Pain clinic chain's owners, ex-CEO committed $25M billing fraud, DOJ alleges

Brentwood, Tenn.-based Comprehensive Pain Specialists, three of its principal owners, its former CEO and a chiropractor are accused of engaging in a false billing scheme that defrauded Medicare and Tennessee's Medicaid program of $25 million, according to the Department of Justice.

The details of the alleged scheme are included in a consolidated complaint filed July 22 by the federal government and Tennessee. According to the complaint, Comprehensive Pain Specialists maximized profits by performing medically unnecessary and excessive testing. In July 2012, CPS, under the direction of CEO John Davis, allegedly began requiring physicians at its 60 clinics to send urine specimens and blood work to its lab for testing. The reimbursement rate for lab testing is nearly five times higher than the rate of on-site testing, according to the Justice Department.

The complaint further alleges that CPS and three of its physician owners submitted false claims to government payers until 2018, when CPS began the process of dissolution.

Peter Kroll, MD, one of the owners, is accused of causing more than 2,500 claims to be submitted to Medicare for procedures and testing performed while he was out of the country on vacation. Medicare has revoked Dr. Kroll's billing privileges, according to the Justice Department.

Mr. Davis, CPS' former CEO, allegedly knew about the false claims physicians submitted but chose not to refund the overpayments to Medicare. He also allegedly upcoded and altered claims submitted by providers to maximize reimbursement.

Mr. Davis was found guilty in April of one count of conspiracy to defraud the U.S. and violate the Anti-Kickback Statute and seven counts of violating the Anti-Kickback Statute. His sentencing is slated for later this year.

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