A doctor who once ran a chain of pain management clinics in California has agreed to pay approximately $11.4 million to settle Medicare and Medicaid fraud allegations. Most of the physician’s 30 pain management clinics were located in California’s Central Coast and Central Valley areas. All of the clinics were closed in May 2021 on the same day that California’s Medicaid program suspended reimbursements to the chain. The federal Medicare program suspended reimbursements to the doctor’s clinics in California and Oregon in June 2020.
Painful and unnecessary procedures
Federal officials launched an investigation into the doctor’s clinics after a whistleblower stepped forward in 2018. Assisted by investigators from California and Oregon, federal officials discovered what they described as “brazen” fraud. Investigators claim the doctor defrauded state and federal health care programs by subjecting his patients to thousands of unnecessary and sometimes painful procedures each year. Between March 2016 and August 2021, the doctor’s clinics performed more than 22,000 biopsies and ordered approximately 60,000 urine tests. Investigators say the doctor reacted angrily when patients or workers complained. Patients who questioned the doctor say he threatened to reduce their pain medications, and reluctant caregivers say they were told to quit.
Billing dispute
The terms of the settlement do not require the doctor to admit any liability, and he continues to deny the government’s claims. In a statement released shortly after state and federal officials announced the settlement, the doctor referred to his legal issues as a “long-standing billing dispute.” The agreement requires the doctor to pay $8.5 million to the federal government, $2.7 million to California and $130,000 to Oregon, and it also bars him from receiving Medicare and Medicaid reimbursements for five years.
Whistleblowers
The outcome of this case reveals how important whistleblowers can be to Medicare and Medicaid fraud investigations. A credible whistleblower will usually trigger an investigation, but highly unusual billing practices should raise red flags even if nobody steps forward. This investigation uncovered widespread fraud, and it may have also made the authorities aware of flaws in the reimbursement system that must be addressed.
