USE Department of Justice USE

The office of the United States District Attorney for the Middle District of Tennessee announced a settlement agreement of more than $4 million with a former Brentwood-based pain clinic that was accused of widespread fraud.

The announcement was made on Wednesday in a DOJ news release, detailing that the $4,121,663.94 payment will settle all claims by the United States and the state of Tennessee involving allegations of wrongdoing at Comprehensive Pain Specialists.

The agreement includes the following parties: CPS, and its four majority owners, Dr. Peter B. Kroll, Dr. Steven R. Dickerson, Dr. Gilberto A. Carrero, and Dr. Richard J. Muench, as well as former CPS executive Dr. Russell S. Smith, and Anesthesia Services Associates, PLLC.

The Brentwood-based company operated more than 40 pain clinics across 12 states before it shut down in 2018.

According to the news release, in July 2019, federal and state prosecutors filed a consolidated complaint in intervention in district court against CPS and its former CEO John Davis.

In April 2019 Davis was convicted of health care fraud, along with three of the four principal owners, Drs. Kroll, Dickerson and Carrero, as well as Dr. Smith. 

The complaint alleged in part that the defendants submitted false claims for medically unnecessary and/or non-reimbursable testing and acupuncture, and the agreements announced on Wednesday resolves all criminal claims and violations of federal and state acts that occurred between May 2011 and the close of operations in 2018.

“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 Mary Jane 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.”

The news release added that Dr. Muench, the only co-owner of CPS who was not named as a party in the lawsuit, agreed to settle with the federal and state government prior to the filing of the complaint.

CPS also agreed to release $2,196,663.94 million in funds held by Medicare in a suspension account and will pay an additional $750,000 in cash to resolve civil lawsuits. 

“When physicians and health care companies engage in questionable business practices and unnecessary services, it compromises patient care and the integrity of HHS programs,” Derrick L. Jackson, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services said. “Our agency will continue to investigate and hold accountable providers that put profits before patients.”

The three named owners will also pay a total of $1.05 million to resolve claims against them, while Dr. Smith also agreed to pay $125,000 to resolve potential liability for common law claims that could be brought against him by federal and state prosecutors. 

As part of the settlements, federal and sate prosecutors agreed to dismiss the civil action, except for their legal claims against John Davis.

“This type of purposeful, illegal conduct takes money from TennCare that otherwise would be used to pay legitimate claims of others,” Tennessee Attorney General Herbert H. Slatery III said. “This settlement should send a message.  If you do this, State and federal authorities are coming after you.”

The allegations that were resolved by this settlement were originally raised in lawsuits based on information provided by whistleblowers.

According to the news release, whistleblowers are able to bring civil suits on behalf of the government and share in any recovery, with the unidentified whistleblowers receiving a payout of $610,684.62.

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