United States and Tennessee File Suit Against Comprehensive Pain Specialists And Principal Physician Owners

NASHVILLE, Tenn. – July 22, 2019 - The United States and Tennessee today filed a consolidated complaint in intervention alleging violations of the False Claims Act and the Tennessee Medicaid False Claims Act by Anesthesia Services Associates, PLLC, d/b/a Comprehensive Pain Specialists (CPS), announced U.S. Attorney Don Cochran for the Middle District of Tennessee and Tennessee Attorney General Herbert Slatery III.  The complaint also names as defendants Dr. Peter B. Kroll, of Goodlettsville, Tennessee; Dr. Steven R. Dickerson, of Nashville; and Dr. Gilberto A. Carrero, of Nashville, three of the principal owners of CPS, as well as John Davis, of Franklin, Tennessee, the former CEO, who was convicted by a jury in April of this year of violating the Anti-Kickback Statute; and Russell S. Smith, a chiropractor from Cleveland, Tennessee.  The complaint also states claims for violation of the Federal Priority Statute and common law claims, including unjust enrichment and fraud.

As set forth in detail in the complaint, beginning in 2011 under the direction of John Davis, CPS instituted policies to maximize profits through medically unnecessary and excessive testing, including a standing order to automatically conduct quantitative drug testing, specimen validity testing, genetic blood testing and psychological testing on virtually all patients, without regard to individual patient risks or need.  In July 2012, CPS began operating its own testing facility in Franklin, Tennessee.  To ensure more revenue was generated, CPS required providers to send all urine specimens and blood work to its lab for testing.  The reimbursement rate for lab testing is nearly five times the rate of on-site testing. 

In addition, John Davis was aware that CPS had submitted false claims and received over $130,000 for non-reimbursable acupuncture, including for services rendered by the physician owner defendants.  Yet, Davis made the decision not to refund the overpayment to Medicare. 

The physician owners, Drs. Dickerson, Kroll, and Carrero, knew about each of these unlawful practices, as they personally engaged in the submission of false claims relating to this conduct. 

John Davis also engaged in a practice of upcoding, altering the claims submitted by providers to maximize the amount of reimbursement from the government.

The complaint also alleges separately that Dr. Peter Kroll was responsible for submitting claims to the United States falsely indicating that he was the Rendering Provider.  In one particularly egregious example of this fraudulent conduct, Dr. Kroll caused over 2,500 claims to be submitted to Medicare, for which CPS was paid almost $350,000 for procedures and testing on patients during a period of time when Dr. Kroll was out of the country on vacation.  As a result of this conduct, Medicare has revoked Dr. Kroll’s billing privileges. 

Despite the governments’ investigation, CPS continued to submit false claims until 2018, when it began the process of dissolution.  The governments allege that the scheme defrauded Medicare and TennCare of at least $25 million, and the United States and Tennessee are seeking to recover treble damages, plus penalties for the thousands of false claims submitted, pursuant to the False Claims Act and the Tennessee Medicaid False Claims Act.

The governments began investigating the wrongdoing alleged in today’s complaint in response to lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act and the Tennessee Medicaid False Claims Act, 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 matter was 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 represents the United States, and Assistant Attorney General Philip Bangle represents Tennessee.

The claims alleged by the United States and Tennessee are allegations only, and there has been no determination of liability. The lawsuit is captioned United States and the State of Tennessee ex. Rel. Suzanne Alt, et al. v. Anesthesia Services Associates, PLLC, et al., Case No. 3:16-cv-00549 (M.D. Tenn.).           

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