$2 Million Resolves Kickback Allegations Relating to Denver Neuromonitoring Company

DENVER — The U.S. Attorney’s Office for the District of Colorado announced today that Denver-based Assure Holdings Corp. and its subsidiary Assure Neuromonitoring LLC (together “Assure”), Assure’s founder Preston Parsons, Denver-based neurosurgeon Dr. Brent Kimball, and California businessman James Mathew McAlpin have entered into settlements totaling more than $2 million to resolve allegations that they violated the False Claims Act by arranging kickbacks for neuromonitoring services.

The Anti-Kickback Statute prohibits knowingly offering, paying, soliciting, or receiving remuneration to induce referrals or orders for items or services covered by Medicare, Medicaid, TRICARE and other federally funded healthcare programs.  The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients. Claims to federally funded healthcare programs that include items or services resulting from a violation of the Anti-Kickback Statute also violate the False Claims Act, which prohibits submitting false or fraudulent claims for payment to the federal government.

The civil settlements announced today resolve allegations relating to intraoperative neuromonitoring services. Intraoperative neuromonitoring uses electrodes to monitor a patient’s nervous system during surgery. Typically, a technician present in the surgical suite places the electrodes before surgery, and then an oversight physician located elsewhere remotely monitors the data output while the surgeon is operating on the patient.

The United States alleges that Assure paid illegal remuneration to surgeons through joint venture companies to induce those surgeons to order intraoperative neuromonitoring services from Assure.  In Dr. Kimball’s case, the alleged kickbacks were routed to Dr. Kimball through a complex web of transfers.  At Dr. Kimball’s request, Mr. McAlpin, a friend of Dr. Kimball, formed a company that entered into a joint venture with Assure’s founder, Mr. Parsons.  That joint venture was known as Englewood Professional Reading LLC.  Through a series of transactions, a portion of the payments received by Englewood Professional Reading for oversight physician claims were routed to Dr. Kimball.

The United States alleges that these kickbacks resulted in claims paid for by federally funded healthcare programs.  When Dr. Kimball ordered interoperative neuromonitoring services through Assure, Assure caused claims to be submitted by a third-party billing company on Englewood Professional Reading’s behalf to the patient’s insurer for payment of the oversight physician’s monitoring services.  Sometimes, these claims for payment were submitted to Medicare Advantage Organizations responsible for providing coverage for Medicare beneficiaries.  Other times, oversight physicians arranged by Assure submitted their own claims directly to Medicare or Colorado Medicaid for services provided to Medicare and Medicaid beneficiaries.

As part of the civil settlements, Assure has agreed to pay $1.008 million; Dr. Kimball has agreed to pay $650,000; Mr. Parsons has agreed to pay $225,000; and Mr. McAlpin has paid $125,000.  Mr. Parsons’ settlement amount is based on his financial condition and limited ability to pay.

“Doctors’ decisions about which services to use when providing care to patients should never be tainted by how much money the doctor can make from kickbacks,” said Acting U.S. Attorney Matt Kirsch for the District of Colorado.  “We will continue to use the False Claims Act and other enforcement tools to maintain integrity in healthcare.”

“Ensuring that health care professionals and entities are held accountable for kickback violations is essential for preserving public trust and safeguarding the integrity of federal health care programs,” said Special Agent in Charge Linda T. Hanley of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).  “HHS-OIG will continue to work with our federal and state law enforcement partners to identify and investigate alleged kickback schemes.”

The settlements also resolve claims brought under the qui tam provisions of the False Claims Act. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of the recovery.  The qui tam case is captioned United States ex rel. Mathis v. Kimball, et al., No. 21-cv-01352-STV (D. Colo.).  Mr. Mathis will receive 18% of the proceeds from the settlements.

The resolutions obtained in this matter were a result of a coordinated effort between the U.S. Attorney’s Office for the District of Colorado and the Medicaid Fraud Control Unit of the Colorado Attorney General’s Office, with assistance from HHS-OIG.  Assistant United States Attorney Jasand Mock investigated the matter.

The claims resolved by the settlements are allegations only.  There has been no determination of liability.