Tennessee Business Owner Convicted of $35M Healthcare Fraud Scheme

A federal jury convicted a Tennessee business owner for fraudulently billing federal healthcare programs approximately $35 million for medically unnecessary injections, which were administered over the course of approximately eight years to a population of opioid-dependent patients. According to court documents and evidence presented at trial, Michael Kestner, 72, of Nashville, at various times owned, operated, and managed pain clinics in Tennessee, North Carolina, and Virginia, which were ultimately branded under the name Pain MD. The trial evidence proved that Kestner, who is not a physician, pressured nurse practitioners and physician assistants employed by clinics in the Pain MD network to provide multiple back injections to many, if not most, patients who came to Pain MD seeking opioid treatment. Witnesses testified that patients who refused to accept regular injections risked being turned away from Pain MD and suffering withdrawals from their opioid medication.

The evidence further demonstrated that the injections were uniformly billed as Tendon Origin Insertion injections (TOIs), even though almost none of these patients were diagnosed with pain in their tendons, and in many cases, it would have been medically impossible to administer TOIs with the equipment available to the practitioners. Nevertheless, Kestner relentlessly pressured the providers at his clinics to administer and bill for injections. The evidence also demonstrated that, to keep billings up, Kestner sent regular emails ranking the practitioners’ “production” against one another, criticizing providers for “below average” performance, and otherwise making providers feel they would lose their jobs or let down their clinic staff if they did not perform an increasing number of injections. He ignored repeated notices — including a lawsuit — from insurance companies alerting him that his clinics were billing these injections improperly. Through these practices, Pain MD became Medicare’s single highest biller of TOI procedures in the country, outranking the next highest biller by approximately eightfold.

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