Nashville, TN (WorkersCompensation.com) – A long awaited case involving a pain clinic based in Middle Tennessee has settled. Anesthesia Services Associates, PLLC doing business as Comprehensive Pain Specialists (CPS), and its owners agreed to pay out a $4.1 million settlement to resolve allegations of healthcare fraud resulting from a whistleblower lawsuit in which the informants will receive over $600,000.
CPS, whose headquarters were located in Brentwood, closed its doors in 2018. Prior to the closure however, the company had offices in more than 12 states, with over 60 pain clinics. In July 2019, a Consolidated Complaint in Intervention was filed against principal owners, Drs. Kroll, Dickerson, and Carrero, as well as the CEO, and chiropractor Russell S. Smith who managed the CPS clinics in east Tennessee. Only one of the owners, Dr. Richard J. Muench, was not a party to the lawsuit and agreed to settle prior to the filing of the complaint.
Former CPS CEO, John Davis, was sentenced last year to 42 months of prison after being convicted, through trial, of one count of conspiracy to commit fraud and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute. According to evidence from the trial, Davis operated a front durable medical equipment company that was registered under his spouse’s name. Davis used funds from CPS to pay referral bonuses to the physicians who ordered the durable medical equipment, and then also received a bonus himself of 60 percent of the Medicare payments for the referrals.
In addition to the durable medical kickbacks, the lawsuit alleged that the group billed federal and state programs for medically unnecessary and non-covered charges for urine and drug tests, genetic and psychological testing, and electro-auricular acupuncture. Allegedly, CPS also had a standing policy that providers were required to send all labs to them, increasing the revenue as much as five times the normal reimbursement, even though the offices were capable of onsite testing.
The lawsuit also alleged separately that Dr. Peter Kroll submitted claims as the rendering provider when in fact he was out of the country on vacation. The total claim impact was said to be 2,500 claims totaling over $350,000 in reimbursements, resulting in revocation of Kroll’s Medicare privileges.
To resolve the allegations, CPS agreed to release $2,196,663.94 in suspended Medicare payments, and pay an additional $750,000 in cash. To resolve claims against them, the owners will pay out $1.05 million. Smith has agreed to pay $125,000 in liability for common law claims that could be brought against him. As part of the settlement, with the exception of Smith, Federal and State authorities agreed to dismiss Civil Action.