Comprehensive Pain Specialists, former senator settle fraud allegations for $4.1M

(Photo: Dickersonfors20, Facebook)
Sen. Steve Dickerson, center. (Photo: Dickersonfors20, Facebook)

Former Republican state Sen. Steve Dickerson was dropped from a lawsuit filed by the federal government alleging fraud by Comprehensive Pain Specialists, but Dickerson is named as a majority owner in an agreement to pay $4.1 million to settle all claims.

Dickerson, who was defeated by Democratic Sen. Heidi Campbell in 2020, has made overtures on Twitter about seeking election in three years.

“2024 is just around the corner, I think I’ll keep it on auto-renew,” he tweeted recently about votedickerson.com.

U.S. Attorney Mary Jane Stewart and Tennessee Attorney General Herbert Slatery announced Wednesday they reached agreements with Anesthesia Services Associates, doing business as Comprehensive Pain Specialists and its four majority owners, Dr. Dickerson, Dr. Peter Kroll, Dr. Gilberto Carrero and Dr. Richard Muench and Russell Smith, a former CPS executive, in which they agreed to pay $4.1 million to settle all claims by the federal government and state of Tennessee involving allegations of wrongdoing.

Dickerson could not be reached immediately for comment.

“Even though CPS ceased operations before the United States and Tennessee filed the civil action, the United States and Tennessee were still able to recover millions of dollars in damages through litigation and utilizing administrative remedies available through our partners at the Centers for Medicare & Medicaid Services,” Acting U.S. Attorney Mary Jane Stewart said in a statement.

Said Slatery in the release, “This type of purposeful, illegal conduct takes money from TennCare that otherwise would be used to pay legitimate claims of others. This settlement should send a message. If you do this, state and federal authorities are coming after you.”

Comprehensive Pain Specialists, formerly based in Brentwood, operated more than 40 pain clinics in 12 states until it closed in 2018. Federal and state prosecutors filed a complaint in U.S. District Court in July 2019 against the company, former CEO John Davis, who was convicted of healthcare fraud, and three of its four principal owners, including Dickerson.

The filing contended the defendants made false claims for medically unnecessary and/or non-reimbursable testing and acupuncture. Muench agreed to settle before the complaint was filed.

Dickerson has maintained he did nothing wrong, and according to reports, the state and federal lawsuit against him was dismissed. Dickerson, one of the founders of Comprehensive Pain Specialists, was accused of failing to intervene in excessive drug test charges. 

The lawsuit sought to recover $50 million in civil damages against Dickerson and Carrero as federal prosecutors claimed the company defrauded the government of some $25 million, according to reports.

The agreement reached by Comprehensive Pain Specialists and its owners resolves the allegations the feds and state made for violations of the False Claims Act and the Tennessee Medicaid False Claims Act, according to the release from the U.S. Attorney’s Office.

Those stem from false claims the company allegedly submitted to federal healthcare programs and TennCare for medically unnecessary and/or non-reimbursable urine drug, specimen validity, genetic and psychological testing, in addition to claims for electro-auricular acupuncture from May 2011 until CPS quit operating in 2018.

The settlement also resolves allegations the company submitted false claims using Kroll’s provider number for services and testing that wasn’t done, as well as allegations of fraud, mistaken payments and “unjust enrichment” against the company, its owners and Smith.

To reach the settlement, Comprehensive Pain Specialists agreed to release nearly $2.2 million in Medicare funds held in a suspension account and will contribute another $750,000 in cash. 

The owners will pay more than $1 million to resolve the claims against them, and Smith agreed to pay $125,000 to resolve potential liability for common law claims that could be filed against him by the federal and state government.