NASHVILLE, Tenn. (AP) - State and federal authorities announced Wednesday that they have reached a $4.1 million settlement in a civil case that made claims of Medicaid and Medicare fraud against a now-shuttered pain clinic company and several of its owners, including a former state senator.
The deal settles claims by the state and federal governments against formerly Brentwood-based Comprehensive Pain Specialists, four of its owners - former Republican Sen. Steve Dickerson, Peter Kroll, Gilberto Carrero and Richard Muench - and former company executive Russell Smith. The cases against Dickerson and Carrero were dismissed in June 2020.
The settlement revolves around a July 2019 lawsuit by federal and state authorities that alleges that officials at the company defrauded Medicare and Medicaid of more than $25 million from 2013 to 2018 by submitting claims for unnecessary tests and services and falsified documents.
Government authorities had been seeking more than $50 million in damages in the case, which stemmed from whistleblower complaints.
To resolve the claims against them, Comprehensive Pain Specialists will release $2.2 million held by Medicare in a suspension account and contribute $750,000 in cash. The four owners, meanwhile, will pay more than $1 million combined, with Smith agreeing to pay $125,000, Acting U.S. Attorney Mary Jane Stewart and Tennessee Attorney General Herbert Slatery said in a news release.
The whistleblowers will receive $610,700 under the settlement. The settlement doesn’t determine any of the parties were liable for the allegations against them, the U.S. attorney’s office said.
“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,” Stewart, the acting U.S. attorney, said in the release.
Authorities said the settlement dismisses the governments’ lawsuit against everyone but John Davis, the former company CEO.
Davis was convicted by a jury in April 2019 of charges of running a kickback scheme for referring durable medical equipment prescriptions to another medical facility. He was handed a three-and-a-half-year prison sentence last summer, but then-President Donald Trump commuted his sentence before leaving office this January.
The White House said at the time that “no one suffered financially as a result of his crime,” although taxpayers were on the hook for the improper reimbursements.
At the time of the lawsuit, attorneys for Dickerson said he provided pain treatment to patients that he believed was medically necessary and clinically appropriate and relied on corporate compliance personnel and counsel about claims submission and other compliance issues.
Dickerson is a Nashville anesthesiologist who co-owned the Tennessee-based company, which once operated dozens of clinics in 12 states and employed about 250 health care providers. He lost his reelection bid last year to Democratic Sen. Heidi Campbell.
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