Federal authorities are consolidating seven separate whistleblower complaints against a Tennessee-based chain of pain clinics co-owned by a state senator, alleging the giant pain management clinic chain and its leaders engaged in a multitude of schemes designed to defraud Medicare and Medicaid.

Citing court documents unsealed April 23, the Tennessean noted that the fraud schemes were so profitable for Comprehensive Pain Specialists (CPS) that one of the company’s executives once said urine samples “smelled like money.”

At its height, CPS operated about 60 pain management clinics in 11 states. Tennessee State Senator Steve Dickerson (R-Nashville) co-founded the company with D. Peter Kroll, who is also named in the whistleblower lawsuit. Other defendants include CPS co-owners Dr. Richard Muench and Dr. Gilberto Carrero and the company’s former CEO John Davis, who was convicted of criminal health care fraud charges in a separate case earlier in April.

The Brentwood, Tennessee-based company grew to become one of the largest pain management companies in the U.S. before it shut down abruptly last year.

Federal prosecutors said in court documents that they will file a False Claims Act lawsuit against CPS and its executives, incorporating allegations from the seven whistleblower complaints.

According to the Tennessean, five of the whistleblowers who filed lawsuits are former CPS employees who say they were fired after they discovered wrongdoing within the company. The whistleblowers will receive between 15 and 25 percent of any settlement or recovery resulting from their allegations.

Court records outline at least five fraud schemes CPS orchestrated that violated the False Claims Act.

To inflate its Medicare and Medicaid billings, the company pressured employees to conduct costly and unnecessary “full panel” drug tests on every patient at every visit. The company allegedly incentivized doctors to order tests by paying them a percentage of the revenues the lab work pulled in.

Federal prosecutors also found evidence supporting whistleblower allegations that CPS ran a similar scheme with costly genetic and psychological tests, which doctors ordered with unjustifiable frequency “merely to increase profits,” the Tennessean reported. CPS paid nurse practitioners and physicians’ assistants bonuses of $5 to $25 for each test they ordered.

The company also allowed doctors and nurse practitioners to perform medical services in states where they weren’t licensed and in hospitals where they lack the credentials, according to the complaint. CPS then forged documents to make it appear as if those services were performed by Dr. Kroll. One of the whistleblowers says she had to copy and paste Dr. Kroll’s signature onto such documents up to 45 times per day.

CPS clinics also used certain devices that were not covered by Medicare and Medicaid on patients, then billed the government indicating the completely different devices were used in the treatments so the billings would appear legitimate, according to the whistleblower allegations.

Allegations also say the company also submitted false claims to the government by upcoding patient charges to appear their visits were longer and more complex than they actually were. This practice allowed to collect more from taxpayer-subsidized health care programs than they otherwise would have. According to the Tennessean, the government’s company says CPS threatened to dock bonuses or take disciplinary actions on employees who documented patient treatments in ways that resulted in lower reimbursements.

Court documents indicate the fraudulent drug tests were extremely costly to U.S. taxpayers. Each day, CPS charged federal health care programs for hundreds of drug tests that it either should not have performed or should have been performed with different tests at a fraction of the cost. According to a Kaiser Health News report, CPS billed Medicare at least $11 million for drug tests in just 2014.

Beasley Allen has a team of whistleblower lawyers who are experienced at investigating these types of sensitive complaints. Someone who is thinking of becoming a whistleblower is advised to talk to a lawyer about all the possible outcomes, and whistleblower protections available to them under the law. If you feel you have first-hand knowledge of fraud against the government, contact one of our whistleblower team: Lance Gould, Larry Golston, Leslie Pescia or Tyner Helms. All consultations are confidential.

If you are a lawyer who needs more information about how to identify potential whistleblower claims, Lance has written a book on the subject that is available free. Visit our publications page to order a hard copy or download a free digital copy of “Whistleblowers: A Brief History & A Guide to Getting Started.”

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