Feds Found ‘Staggering’ Drug Testing Fraud at Tennessee Pain Clinics

By Fred Schulte, Kaiser Health News

The Justice Department has accused a defunct chain of Tennessee-based pain clinics of cheating Medicare and other taxpayer-funded health insurers out of at least $25 million in needless urine drug tests and genetic testing.

The civil lawsuit names Comprehensive Pain Specialists, also known as Anesthesia Services Associates PLLC; four of its physician owners; and a former top executive. The doctors include Tennessee Republican State Sen. Steven Dickerson and Peter Kroll, both anesthesiologists.

At its peak, CPS ran 60 pain clinics in a dozen states and treated some 48,000 patients per month, according to the suit. It shut down abruptly last summer, leaving many chronic pain patients scrambling to find a new source of narcotic medicines.

The Justice Department fraud case centers largely on the company’s lucrative urine-testing lab in Brentwood, Tenn., which CPS financed with a $1.5 million loan. The suit also alleges overbilling from acupuncture and other services offered to patients.

CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized Medicare billings for urine drug tests.

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Medicare and other federal programs paid over $70 million from 2011 to 2018 for CPS-ordered urine tests, an amount the lawsuit called “staggering.” TennCare, the state’s Medicaid program, paid more than $9 million more during that time.

“For this reason, CPS considered [urine tests] to be ‘liquid gold’ — with revenues of tens of millions of dollars for what was largely unnecessary medical testing,” according to the suit.

The chain’s owners and then-CEO John Davis “viewed every CPS patient as an opportunity to make money, without regard to the individualized need for treatment,” the suit alleges. Davis was convicted last year in Nashville on federal criminal health care fraud charges. He has since filed a motion for a new trial.

Dan Martin, an attorney representing Kroll, said in an emailed statement: “We are aware of the allegations and very familiar with the actual facts. Dr. Kroll did not engage in any wrongdoing whatsoever, and we look forward to correcting the government’s misunderstanding of the facts.”

Dickerson’s attorney, Ed Yarbrough, also issued a statement that read: “Dr. Dickerson is an honest man. We will prove that in court.” 

$8.5 Billion Annually Spent on Drug Tests

In its investigation, KHN, with assistance from researchers at the Mayo Clinic, found that spending on urine screens and related genetic tests quadrupled from 2011 to 2014 to an estimated $8.5 billion a year — more than the entire budget of the Environmental Protection Agency. The federal government paid medical providers more to conduct urine drug tests in 2014 than it spent on the four most recommended cancer screenings combined.

CPS was among the nation’s most aggressive testers. KHN found that in 2014 five of its medical professionals stood among the nation’s top billers. Anita Bayles, a nurse practitioner working at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billings that year, according to Medicare records analyzed by KHN.

The Justice Department suit says that CPS believed Bayles ordered too many urine tests and overprescribed opioids and in September 2016 decided to fire her. But the decision was reversed by CEO Davis “because of her ability to generate revenues,” according to the suit. Bayles could not be reached for comment.

IMAGE COURTESY OF MARK COLLEN AND PAIN EXHIBIT

IMAGE COURTESY OF MARK COLLEN AND PAIN EXHIBIT

Though CPS ran six or more urine tests a year on many patients receiving narcotics, its doctors often did not review the results to make sure patients did not abuse them, according to the suit.

Kroll, who also served as CPS’ medical director, told KHN in 2017 that the high volume of tests was justified to keep patients safe and to reduce chances of black market sales of pills.

Kroll billed Medicare $1.8 million for urine tests in 2015, the KHN analysis of Medicare billing records found.

Kroll said in a 2017 interview that he and Dickerson came up with the idea to open a high-quality pain practice over a cup of coffee at a Nashville Starbucks in 2005.

But the Justice Department alleges that CPS expanded rapidly through bilking the government, conduct that its top executives and founders “failed to take any action to stop,” according to the suit.

In what is called a “particularly egregious example of this fraudulent conduct,” the Justice Department alleged that Kroll caused over 2,500 claims to be submitted to Medicare, for which CPS was paid almost $350,000, during a 10-day period in May 2017 when Kroll was on vacation in Italy.

“Because of these fraudulent claims, Kroll’s billing privileges with Medicare have been revoked,” according to the suit.

The lawsuit states that Medicare officials began investigating overcharging for urine testing at CPS in 2014 and eventually directed the company to repay the government $27.4 million in an extrapolated penalty. But CPS aggressively appealed the decision and managed to get it overturned and stay in business.

Once among the largest pain management groups in the Southeast, CPS crumbled amid financial woes that included nearly a dozen civil suits alleging unpaid debts, as well as the criminal case against Davis. In a court filing in December, the company said that it had terminated all of its employees and that its debts “greatly exceed its assets.”

In total, Medicare paid CPS over $150 million from 2011 to 2018, a large part of which was related to urine testing, while TennCare paid CPS over $32.5 million, according to the suit.

The Justice Department complaint consolidates several whistleblower cases filed against the company by doctors and other former employees. Federal whistleblower cases seek recovery of money paid improperly and can include treble damages, or three times the amount of the original overpayment.

One of the whistleblowers said he toured the lab with CPS executives and observed an “overpowering and unpleasant smell of urine.” In response, a CPS executive said, “To me, it smells like money,” according to the whistleblower’s suit.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

Pain Clinics Ordered Unnecessary Urine Drug Tests

By Fred Schulte, Kaiser Health News

A Tennessee-based chain of pain clinics that abruptly shut down last summer faces five whistleblower lawsuits accusing it of defrauding Medicare and other health insurers by billing for hundreds of unnecessary urine drug tests and other dubious health services, newly unsealed court records show.

The federal suits target Tennessee-based Comprehensive Pain Specialists, also known as Anesthesia Services Associates, PLLC, and several of its physician owners. At its peak, CPS ran 60 pain clinics in 12 states, according to the suits, as well as a lucrative urine-testing lab in Brentwood, Tenn. CPS closed with no warning in July, leaving patients in several states distressed and scrambling to find a new source of narcotic pain medicines.

In federal court filings unsealed in Nashville this week, federal prosecutors said they would take over the urine-testing allegations and sue several CPS owners, including co-founding anesthesiologists Peter Kroll and Steven Dickerson. Dickerson is a Republican state senator representing Nashville.

Kroll could not be reached for comment Wednesday. Dickerson did not respond to an email or a phone message left at his legislative office.

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It is not clear whether the whistleblowers, who include former CPS doctors and other employees, would pursue several allegations against the company that the federal government declined to join in. CPS, in an unrelated court filing in December, said the company had terminated all of its employees and that debts “greatly exceed its assets.”

Once among the largest pain management groups in the Southeast, CPS crumbled amid financial woes that included nearly a dozen civil suits alleging unpaid debts, and a criminal investigation that ensnared its former chief executive, John Davis. Davis, 41, was convicted this month in federal court in Nashville on health care fraud charges. He is to be sentenced later this year.

CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized its Medicare billings for urine drug tests. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers. One nurse practitioner working at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billings that year, according to Medicare records analyzed by KHN.

Kroll, who also served as CPS’ medical director, said at the time that the tests were justified for patient safety and to reduce chances the pills might be sold on the black market. Kroll billed Medicare $1.8 million for urine tests in 2015, the KHN analysis of Medicare billing records found.

Kroll in an interview with KHN at the time said that he and fellow anesthesiologist Dickerson came up with the idea for the pain clinics over a cup of coffee at a Nashville Starbucks in 2005.

One of the whistleblower suits alleging unnecessary urine tests was first filed under seal in 2016 by Suzanne Alt, a doctor who worked in the company’s pain clinics in Troy, Mo., and Keokuk, Iowa, from May 2014 to March 2015. She alleged CPS doctors were “strongly encouraged to order full-panel urine drug screens on each patient, every time, despite the patient’s history, compliance and risk.”

She also said that the company’s electronic medical records “made it extremely difficult to order anything less than the full panel.” Alt said she was told the Tennessee lab did about 600 of these screens daily. Another whistleblower said he toured the lab with CPS executives and observed an “overpowering and unpleasant smell of urine.” In response, a CPS executive said, “To me, it smells like money,” according to the suit.

“They were making a killing,” said Birmingham, Ala., attorney Don McKenna, who represents Alt in the case.

Another of the whistleblowers, former CPS anesthesiologist Cynthia Niendorff, alleged that the company billed Medicare about $754 for each additional urine test, even though earlier results had come back negative. She said CPS grossed approximately $6 million per month from the urine-testing lab and said about 20% of this amount was suspect, according to the suit.

Mary Butner, a former insurance specialist for CPS in Gallatin, Tenn., alleged that CPS charged some patients $1,500 for a drug test to measure blood levels of medication and $400 for a drug test designed to detect illegal drugs — charges that the suit called “grossly inflated and disproportional to the actual costs.” She also alleged that CPS would fill prescriptions for patients whose drug tests detected the presence of illegal drugs, or showed that they were not taking their medication as directed.

Butner also accused medical director Kroll of approving prescriptions for back braces when it was “clearly medically unnecessary,” including some people who had injuries to a knee or elbow.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.