Acting US Attorney Mary Jane Stewart and Tennessee Attorney General Herbert H. Slatery III announced that they have entered into agreements with Anesthesia Services Associates, PLLC d/b/a Comprehensive Pain Specialists (“CPS”), its four majority owners, Dr. Peter B. Kroll, Dr. Steven R. Dickerson, Dr. Gilberto A. Carrero, and Dr. Richard J. Muench (collectively, the “Owners”), and Russell S. Smith, D.C. — a former CPS executive — whereby they agreed to pay a total of $4,121,663.94 to settle all claims by the United States and Tennessee involving allegations of wrongdoing at CPS. CPS, which was based in Brentwood, Tennessee, at one point operated over 40 pain clinics and had operations in 12 states, until it shut down in 2018. On July 22, 2019, the United States and Tennessee filed a Consolidated Complaint in Intervention in the United States District Court for the Middle District of Tennessee against CPS, its former CEO, John Davis, who was convicted in April 2019 of healthcare fraud, as well as three of the four principal Owners, Drs. Kroll, Dickerson, and Carrero, and, Dr. Smith, a former manager of certain CPS clinics in East Tennessee. The Complaint alleged, among other things, that the defendants submitted false claims for medically unnecessary and/or non-reimbursable testing and acupuncture. Dr. Muench, the only owner not a party to the lawsuit, agreed to settle with the United States and Tennessee prior to the filing of the Complaint.
The agreements with CPS and the Owners resolve the United States’ and Tennessee’s claims for violations of the False Claims Act and the Tennessee Medicaid False Claims Act that arose from the submission of false claims to federal healthcare programs and TennCare specifically for medically unnecessary and/or non-reimbursable urine drug, specimen validity, genetic and psychological testing, as well as claims for electro-auricular acupuncture during the period from May 2011 through when CPS ceased operating in 2018. The settlement also resolves claims relating to CPS’s submission of false claims under Dr. Kroll’s provider number for services he did not render and testing he did not order. In addition, the agreements resolve common law claims for fraud, payment by mistake, and unjust enrichment against CPS, the Owners and Dr. Smith. To resolve the Civil Action, CPS agreed to release $2,196,663.94 million in funds held by Medicare in a suspension account and will contribute an additional $750,000 in cash. The Owners will pay a total of $1.05 million to resolve claims against them. Dr. Smith also agreed to pay $125,000 to resolve potential liability for common law claims that could be brought against him by the United States and Tennessee. As part of the settlements, the United States and Tennessee agreed to dismiss the Civil Action, except for their claims against John Davis.
