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Case Number: 3:16-cv-00549
Judge: Aleta A. Trauger
Court: United States District Court for the Middle District of Tennessee (Davidson county)
Plaintiff's Attorney: United States District Attorney’s Office
Description: Nashville, Tennessee health care fraud law lawyer represented defendants who were accused with health care fraud.
Anesthesia Services Associates, PLLC d/b/a Comprehensive Pain Specialists (“CPS”), its four majority owners, Dr. Peter B. Kroll, Dr. Steven R. Dickerson, Dr. Gilberto A. Carrero, and Dr. Richard J. Muench (collectively, the “Owners”), and Russell S. Smith, D.C. – a former CPS executive – whereby they agreed to pay a total of $4,121,663.94 to settle all claims by the United States and Tennessee involving allegations of wrongdoing at CPS.
CPS, which was based in Brentwood, Tennessee, at one point operated over 40 pain clinics and had operations in 12 states, until it shut down in 2018. On July 22, 2019, the United States and Tennessee filed a Consolidated Complaint in Intervention in the United States District Court for the Middle District of Tennessee against CPS, its former CEO, John Davis, who was convicted in April 2019 of health care fraud, as well as three of the four principal Owners, Drs. Kroll, Dickerson, and Carrero, and, Dr. Smith, a former manager of certain CPS clinics in East Tennessee (the “Civil Action”). The Complaint alleged, among other things, that the defendants submitted false claims for medically unnecessary and/or non-reimbursable testing and acupuncture. Dr. Muench, the only owner not a party to the lawsuit, agreed to settle with the United States and Tennessee prior to the filing of the Complaint.
The agreements with CPS and the Owners resolve the United States’ and Tennessee’s claims for violations of the False Claims Act and the Tennessee Medicaid False Claims Act that arose from the submission of false claims to federal health care programs and TennCare specifically for medically unnecessary and/or non-reimbursable urine drug, specimen validity, genetic and psychological testing, as well as claims for electro-auricular acupuncture during the period from May 2011 through when CPS ceased operating in 2018. The settlement also resolves claims relating to CPS’s submission of false claims under Dr. Kroll’s provider number for services he did not render and testing he did not order. In addition, the agreements resolve common law claims for fraud, payment by mistake, and unjust enrichment against CPS, the Owners and Dr. Smith.
To resolve the Civil Action, CPS agreed to release $2,196,663.94 million in funds held by Medicare in a suspension account and will contribute an additional $750,000 in cash. The Owners will pay a total of $1.05 million to resolve claims against them. Dr. Smith also agreed to pay $125,000 to resolve potential liability for common law claims that could be brought against him by the United States and Tennessee. As part of the settlements, the United States and Tennessee agreed to dismiss the Civil Action, except for their claims against John Davis.
“Even though CPS ceased operations before the United States and Tennessee filed the Civil Action, the United States and Tennessee were still able to recover millions of dollars in damages through litigation and utilizing administrative remedies available through our partners at the Centers for Medicare & Medicaid Services,” said Acting U.S. Attorney Stewart. “The United States will not hesitate to use all of its resources to protect taxpayer dollars, including by going after the individuals who reap the benefits, directly or indirectly, from health care fraud.”
“This type of purposeful, illegal conduct takes money from TennCare that otherwise would be used to pay legitimate claims of others,” said General Slatery. “This settlement should send a message. If you do this, State and federal authorities are coming after you.”
“When physicians and health care companies engage in questionable business practices and unnecessary services, it compromises patient care and the integrity of HHS programs,” said Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. “Our agency will continue to investigate and hold accountable providers that put profits before patients.”
“We are fortunate to have this strong partnership between state and federal agencies in the pursuit of false claims, to hold accountable those responsible,” said TBI Director David Rausch. “Health care fraud impacts the quality of our health care, in addition to costing consumers and taxpayers.”
The allegations resolved by this settlement were originally raised in lawsuits filed under the qui tam, or whistleblower, provisions of the FCA, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. The whistleblowers will receive $610,684.62 as their share of the Governments’ settlement proceeds from the CPS settlement and will dismiss their individual actions.
The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office, and investigated by the Department of Health and Human Services, Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Kara F. Sweet represented the United States. Assistant Attorney General Philip H. Bangle represented Tennessee.
Outcome: Comprehensive Pain Specialists And Former Owners Agree To Pay $4.1 Million To Settle Fraud Allegations.