United States Files Complaint Against South Carolina Chiropractor Under False Claims Act

by Andrew Murray | June 6th, 2019

On June 3, 2019, the Department of Justice announced the United States’ filing of a complaint against a South Carolina chiropractor, and the drug testing laboratories and pain management clinics that he managed or owned. alleging violations of the False Claims Act. The Greenville-based chiropractor, Daniel McCollum, and named defendants allegedly provided unnecessary medical items and services, and engaged in “illegal financial relationships.” The Press Release further states:

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The United States’ complaint alleges that from at least Jan. 1, 2011 through Dec. 31, 2018, McCollum and his pain management clinics paid bonuses to physicians and other health care providers that included amounts based directly on their referrals of urine drug testing to McCollum’s laboratories, in violation of the Stark Law and the Anti-Kickback Statute. The United States also alleges that McCollum and Labsource violated the Anti-Kickback Statute by entering into “direct bill” agreements with physicians and other providers around the country that entitled those providers, after paying Labsource a set fee to run the test panels they ordered, to bill private insurance companies directly for those tests – and generally for much more than they had paid Labsource. The United States contends in its complaint that McCollum and Labsource offered providers the opportunity to profit in this manner to induce them to refer their tests for Medicare, Medicaid, and TRICARE patients to Labsource.

Congress passed the Stark Law and Anti-Kickback Statute to prevent financial incentives from improperly influencing medical decision-making, which can lead to excessive and unnecessary tests and services, as well as patient harm. Among other things, the Stark Law prohibits billing Medicare for laboratory testing services referred by a physician who stands to profit directly from those referrals. The Anti‑Kickback Statute, in relevant part, prohibits offering or paying anything of value to encourage the referral of items or services covered by federal health care programs, including laboratory testing services.

The United States’ complaint also alleges that McCollum and the other defendants, including ProCare, directed or encouraged providers to use “standing orders” of laboratory tests across all or most of their patients without regard for individual patient need – which caused Medicare, Medicaid, and TRICARE to pay for medically unnecessary tests. Finally, the complaint alleges that McCollum and his pain management clinics caused these federal health care programs to pay for excessive and unnecessary steroid injections and unnecessary prescriptions for opioids and lidocaine ointment.

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