Pain Management Network Shells Out $1 Million to Settle Lab Testing Kickback Charges

Case: The DOJ accused a collection of companies owned by Wisconsin-based Advanced Pain Management Holdings, Inc. (APMH) of paying kickbacks in the form of shares of company stock to non-employee physicians who performed pain management procedures at its ambulatory surgical centers. The idea was for the incentive stock to be redeemed upon the sale of AMPH based on the company’s profitability, which was calculated on the basis of referrals from those same non-employee physicians. The company shares also represented a reward for previous referrals. To make matters worse, APMH also paid non-employee physicians to serve as medical directors using a formula tied to the volume of procedures performed at the ambulatory surgery centers. APMH agreed to settle the claims for $1 million.   Significance: In addition to the kickback abuses, which came to light as a result of a whistleblower lawsuit, one of APMH’s subsidiary labs self-disclosed to HHS that it routinely performed confirmatory urine drug tests without relying on an individualized risk assessment to determine whether confirmatory testing was medically necessary for the particular patient.