Pain clinic operator pays more than $1.45-million to settle False Claims Act violations

January 30, 2018

A whistleblower helped the government save lives and protect taxpayers’ money in Tennessee last week. U.S. Attorney General Jeff Sessions and U.S. Attorney Don Cochran of the Middle District of Tennessee announced that a chiropractor operating pain clinics from Lenior City, Tennessee has paid $1.45 million, plus interest, to resolve False Claims Act violations. Under the same settlement, a pain clinic nurse in Cookeville, Tennessee is to pay $32,000 and surrender her DEA registration to settle allegations that she violated the Controlled Substances Act.

“More Americans are dying because of drugs today than ever before—a trend that is being driven by opioids,” said Attorney General Jeff Sessions. “If we’re going to end this unprecedented drug crisis, which is claiming the lives of 64,000 Americans each year, doctors must stop over-prescribing opioids and law enforcement must aggressively pursue those medical professionals who act in their own financial interests, at the expense of their patients’ best interests. “

Vowing to fight opioid abuse “on all fronts,” U.S. Attorney Cochran recognized the help in this case of a whistleblower. The United States and Tennessee began to investigate in March 2016 after a former office manager for the Cookeville Center for Pain Management filed a qui tam lawsuit against Matthew Anderson and his management company, PMC LLC.

The qui tam, or whistleblower, provisions of the False Claims Act allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery with the use of a whistleblower law firm.  In this more than $1.45 million settlement, the whistleblower will get $246,500 and other amounts under the settlements with Scott and the three pain clinics. Whistleblowers stand to receive significant awards under the False Claims Act which could be up to 30% of the amount recovered for the taxpayers.

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Anderson and PMC LLC operated four pain clinics in Tennessee, most recently known as Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman; Preferred Pain Center of Grundy County in Gruetli Laager; and McMinnville Pain Relief Center.   All these clinics have now closed. Anderson allegedly reaped over $5 million from the four pain clinics, and took over 90 percent of the pain clinics’ profits.

Anderson and PMC resolved in the settlement the governments’ claims that from 2011 through 2014, they caused pharmacies to request for Medicare and TennCare payments for painkillers, including opioids, without valid medical purpose.

It also resolved allegations about Anderson’s too high reimbursements for office visits, and the PMC’s claims on Medicare for nurse services in 2011 and 2012 that failed to abide by the Tennessee law.

The case was handled by the United States Attorney’s Office for the Middle District of Tennessee and the Tennessee Attorney General’s Office and investigated by the Department of Health and Human Services – Office of Inspector General and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Assistant U.S. Attorney Ellen Bowden McIntyre represented the United States, and Assistant Attorney General Philip Bangle represented the State of Tennessee.

There is a prioritization of opioid litigation as the crisis has reached epidemic proportions. Opioid Qui Tam litigation has become increasingly prevalent to combat the crisis. Oftentimes, these doctors or clinics are called “pill pushers” or “Dr. Feelgoods” and although one could conceivably blow the whistle as an opioid user, the False Claims Act (FCA) contemplates recovery for mainly insiders with specific information of fraud against the government.  Victims of opioid addiction who have had their lives ruined by the drugs may have other avenues to bring litigation against the drug manufacturers and the opioid prescribers.

The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.). The settlement resolved the case but Anderson or PMC had not admitted any liability.