Ouch! Pain Clinic Chain Loses Whistleblower Case

On April 25, a chain of 40 pain clinics in Virginia, Maryland, the District of Columbia, New Jersey, New York, and West Virginia treating 160,000 patients annually (2012 numbers) announced that they had agreed to pay $3.29 million to settle a federal whistleblower lawsuit filed by a former employee alleging that they defrauded Medicare, TRICARE, and the Federal Employees Health Benefits (FEHB) Program.

The pain treatment centers, Virginia-based Physical Medicine Associates, Ltd. (abbreviated to “Capitol Spine”), National Spine and Pain Centers, LLC (NSPC), and their parent company, are one of the largest non-surgical pain management clinic chains in the country.

The owner of the pain clinics, privately held Sentinel Capital Partners (which was alleged to be the key participant in the alleged schemes), owns 24 companies, including such well-known brands as TGI Fridays and the high-performance automotive brand Holley’s, as well as lesser-known companies, including one which blows up land mines for the safety of U.S. troops. It had total assets of $26 billion when the lawsuit was filed.

The defendants admitted no wrongdoing.

The lawsuit, United States of America ex rel. Michelle O’Connor v. National Spine and Pain Centers, LLC, et al., No. 3:15-cv-00551 (E.D. Va.), alleged a massive pattern of unlawful behaviors. The complaint is available here.

The Whistleblower’s Allegations

The lawsuit was a “qui tam” complaint, in which a private citizen, the “relator,” sues on behalf of the federal government, under the federal False Claims Act and, if successful, entitles the whistleblower to receive 15% to 25% of any resulting fines or other. Sometimes, the government stands aside and lets the relator’s attorney pursue the case. In this case, the federal government took the lead role from the start, said the co-lead plaintiff’s attorney, Jeanne Markey of Cohen Milstein Sellers & Toll PLLC.

The whistleblower is Michelle O’Connor, a physician’s assistant who worked under supervision of Douglas W. Wisor, M.D., one of the 16 named defendants. She worked at two Virginia offices of Capitol Spine from 2010 to 2012, then for the combined company until June 3, 2013, when Wisor terminated her. Her lawsuit alleges that she was fired “for complaining about the unlawful practices.”

In her complaint, she alleged that the NSPC entities committed, and required their providers to commit a number of fraudulent behaviors including:

• Routinely overcharging by mid-level providers by billing for services as though they are rendered by the patients’ physician;
• Requiring all opioid therapy patients visit the provider’s office every 30 days (rather than every 90 days) in order to increase billing for office visits and other services;
• Routinely overcharging for basic opioid therapy evaluation by mid-level providers during office visits;
• Automatically performing unnecessary drug tests on all opioid therapy patients during each office visit;
• Routinely performing and billing for unnecessary and worthless ultrasounds in connection with numerous types of pain injections;
• Routinely prescribing unnecessary and worthless orthopedic braces;
• Illegally dispensing narcotics from the Fredericksburg office;
• Performing unnecessary spinal cord stimulator trials;
• Performing unnecessary radiofrequency ablation procedures; and
• Performing unnecessary pain injections.