The physician and office manager of a medical practice in Jackson, Kentucky, have agreed to pay $450,000 to resolve civil allegations that the physician unlawfully prescribed controlled substances, and that they both defrauded federal healthcare programs by soliciting kickbacks for laboratory referrals. Pablo Merced, MD owned and operated St. John Neumann’s Extended Hours Clinic, a medical practice in Jackson, Kentucky. His wife, Theresa Merced, worked as St. John Neumann’s office manager. In his practice, Dr. Merced referred laboratory testing to several laboratories, including Physicians’ Medical Center, BIOTAP Medical, and Bluewater Toxicology. Dr. Merced also prescribed controlled substances to his patients at his medical practice.
As set forth in the settlement agreement, the United States alleged that Dr. and Mrs. Merced solicited kickbacks from a lab sales representative, in exchange for Dr. Merced’s referrals of laboratory tests to Physicians’ Medical Center, BIOTAP Medical, and Bluewater Toxicology, from April 2016 to November 2021. The sales representative paid cash directly to the Merceds and to multiple laboratory specimen collectors who worked at St. John Neumann’s. The specimen collectors, who were supposed to only work for the labs, also performed office work at St. John Neumann’s. Medicare, Kentucky Medicaid, and TRICARE programs paid more than $9 million for laboratory tests referred by Dr. Merced. Submission of these tainted claims violated the False Claims Act, a federal law that prohibits knowingly submitting a false claim for reimbursement to federal programs.
