Tennessee state senator among those charged in $25M fraud case

Gavel money handcuffs fraud
Three physicians, including a state senator from Tennessee, were charged Monday with healthcare fraud. (Getty Images/alfexe)

A Tennessee state senator and two other physicians who owned a now-closed pain clinic company were charged Monday with defrauding Medicare and Medicaid of more than $25 million.

The federal government and the state of Tennessee jointly filed a lawsuit against Comprehensive Pain Specialists and its three physician owners alleging they defrauded Medicare and TennCare of over $25 million while operating more than 60 pain clinics in 12 states, according to the U.S. Attorney’s Office for the Middle District of Tennessee.

Charged in the complaint were Steven R. Dickerson, M.D., a Republican state senator in Tennessee, Peter B. Kroll, M.D., and Gilberto A. Carrero, M.D., three of the principal owners of the company. The lawsuit alleges they submitted claims for a variety of unnecessary procedures and falsified documents.

Also, named as defendants were John Davis, the former CEO of the company, who was convicted by a jury in April of violating the Anti-Kickback Statute, and Russell S. Smith, a chiropractor.

The U.S. Attorney’s Office said beginning in 2011, Comprehensive Pain Specialists instituted policies to maximize profits through medically unnecessary and excessive testing. That included a standing order to automatically conduct drug testing, specimen validity testing, genetic blood testing and psychological testing on virtually all patients, without regard to individual risks or needs.

The company also began operating its own testing facility in July 2012 and required providers to send all urine specimens and blood work to its lab for testing, the complaint said. The reimbursement rate for lab testing was nearly five times the rate of on-site testing.

The U.S. Attorney’s Office said the three physician owners knew about these practices and personally engaged in the submission of false claims.

The complaint alleges that in one case Kroll submitted 2,500 claims to Medicare, for which CPS was paid almost $350,000 for procedures and testing for patients when he was out of the country on vacation. His billing privileges to Medicare were revoked as a result.

The lawsuit combines allegations from seven whistleblowers who filed complaints against the company.

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