Federal Suit Alleges 'Staggering' Urine Drug Testing Fraud At Tennessee Pain Clinics


The Justice Department on Monday accused a defunct chain of Tennessee-based pain clinics of cheating Medicare along with other taxpayer-funded health insurers from a minimum of $25 million in needless urine drug tests and dna testing.

The civil lawsuit names Comprehensive Pain Specialists, also referred to as Anesthesia Services Associates PLLC; four of its physician owners; and a former top executive. The doctors include Tennessee Republican State Sen. Steven Dickerson and Peter Kroll, both anesthesiologists.

At its peak, CPS ran 60 pain clinics in a dozen states and treated some 48,000 patients per month, based on the suit. It turn off abruptly last summer, leaving many chronic pain patients scrambling to find a new source of narcotic medicines.

The Justice Department fraud case centers largely on the company's lucrative urine-testing lab in Brentwood, Tenn., which CPS financed having a $1.5 million loan. The suit also alleges overbilling from acupuncture and other services provided to patients.

CPS was the subject of a November 2021 investigation by Kaiser Health News that scrutinized Medicare billings for urine drug tests.

Medicare and other federal programs paid over $70 million from 2011 to 2021 for CPS-ordered urine tests, a sum the lawsuit called “staggering.” TennCare, the state's Medicaid program, paid a lot more than $9 million more during that time.

“For this reason, CPS considered [urine tests] to be 'liquid gold' – with revenues of millions of dollars for what was largely unnecessary medical testing,” based on the suit.

The chain's owners and then-CEO John Davis “viewed every CPS patient as an chance to make money, without regard to the individualized need for treatment,” the suit alleges. Davis was convicted last year in Nashville on federal criminal health care fraud charges. He's since filed a motion for a new trial.

Dan Martin, a lawyer representing Kroll, said within an emailed statement: “We are aware of the allegations and very acquainted with the particular facts. Dr. Kroll didn't participate in any wrongdoing whatsoever, and that we anticipate correcting the government’s misunderstanding from the facts.”

Dickerson's attorney, Ed Yarbrough, also issued a statement that read: “Dr. Dickerson is an honest man. We'll prove that in the court.”

In its investigation, KHN, with assistance from researchers at the Mayo Clinic, found that paying for urine screens and related genetic tests quadrupled from 2011 to 2021 for an estimated $8.5 billion a year – a lot more than the entire budget of the Epa. The federal government paid medical providers more to conduct urine drug tests in 2021 than it allocated to the 4 recommended cancer screenings combined.

CPS was among the nation's most aggressive testers. KHN discovered that in 2021 five of its doctors stood one of the nation's top billers. Anita Bayles, a nurse practitioner working in a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billings that year, based on Medicare records analyzed by KHN.

The Justice Department suit says that CPS believed Bayles ordered a lot of urine tests and overprescribed opioids and in September 2021 chose to fire her. But the decision was reversed by CEO Davis “because of her ability to generate revenues,” based on the suit. Bayles couldn't be reached for comment.

Though CPS ran six or even more urine tests a year on many patients receiving narcotics, its doctors often didn't review the results to make certain patients did not abuse them, according to the suit.

Kroll, who also served as CPS' medical director, told KHN in 2021 that the high volume of tests was justified to keep patients safe and to reduce chances of underground community sales of pills. Kroll billed Medicare $1.8 million for urine tests in 2021, the KHN analysis of Medicare billing records found.

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Kroll said inside a 2021 interview he and Dickerson came up with the idea to open a high-quality pain practice on the mug of coffee at a Nashville Starbucks in 2005.

But the Justice Department alleges that CPS expanded rapidly through bilking the federal government, conduct that it is top executives and founders “failed to consider any action to stop,” based on the suit.

In what is called a “particularly egregious illustration of this fraudulent conduct,” the Justice Department alleged that Kroll caused over 2,500 claims to be listed in Medicare, that CPS was paid almost $350,000, during a 10-day period in May 2021 when Kroll was on vacation in Italy.

“Because of these fraudulent claims, Kroll's billing privileges with Medicare happen to be revoked,” based on the suit.

The lawsuit states that Medicare officials began investigating overcharging for urine testing at CPS in 2021 and finally directed the company to settle the government $27.4 million within an extrapolated penalty. But CPS aggressively appealed the choice and managed to get it overturned and stay running a business.

Once one of the largest pain management groups within the Southeast, CPS crumbled amid financial woes that included nearly a dozen civil suits alleging unpaid debts, as well as the criminal case against Davis. Inside a court filing in December, the organization asserted it had terminated all of its employees which its debts “greatly exceed its assets.”

In total, Medicare paid CPS over $150 million from 2011 to 2021, most of which was associated with urine testing, while TennCare paid CPS over $32.5 million, based on the suit.

The Justice Department complaint consolidates several whistleblower cases filed from the company by doctors and other former employees. Federal whistleblower cases seek recovery of cash paid improperly and can include treble damages, or 3 times the quantity of the original overpayment.

One of the whistleblowers said he toured the lab with CPS executives and observed an “overpowering and unpleasant smell of urine.” In reaction, a CPS executive said, “To me, it smells like money,” based on the whistleblower's suit.