Hospital Chain Will Pay Over $260 Million To Resolve False Billing And Kickback Allegations; One Subsidiary Agrees To Plead Guilty
MACON, Ga. – Kenneth Barngrover, M.D., and his practice, Southeast Regional Pain Center (SRPC), in Columbus, Georgia, has agreed to a $1,000,000 civil penalty to resolve allegations that the pain medicine practice violated both the Controlled Substances Act (CSA) and the False Claims Act (FCA). In addition to a monetary payment, Dr. Barngrover and SRPC entered into a Memorandum of Agreement (MOA) with the Drug Enforcement Administration (DEA) that will be in effect for the next three years.
Barngrover was registered with the DEA as required and operated a worker’s compensation pharmacy out of SRPC offices from which he was authorized to dispense controlled substances. At issue in the settlement were allegations that in the operation of his worker’s compensation pharmacy, Barngrover failed to comply with certain recordkeeping requirements. Those alleged violations included failing to maintain a biennial inventory; failing to maintain a current, complete and accurate record of controlled substances; and collecting medications without DEA authority or documentation of receipt.
In addition to the alleged violations of the CSA, the settlement also resolves allegations that Dr. Barngrover and SRCP violated the False Claims Act by billing Medicare and Tricare for medically unnecessary evaluation and management services, evaluation and management services that were up-coded and psychological testing services that were not appropriately rendered.
“If providers wish to operate like a pharmacy and dispense drugs to their patients, they must act like a pharmacy and maintain accurate records of highly addictive and dangerous drugs,” said U.S. Attorney Peter D. Leary. “Moreover, our federal health care system requires services rendered to patients be medically necessary and appropriate. Providers must abide by federal guidelines put in place for the protection of our citizens.”
“The abuse and misuse of prescription drugs is a major contributor to our nation’s opioid epidemic,” said Robert J. Murphy, the Special Agent in Charge of the DEA Atlanta Field Division. “DEA registered entities are required to maintain current and accurate records of their drug dispensing; DEA investigators will pursue violations of federal mandates put in place to prevent the diversion of these highly addictive drugs away from legitimate medical use.”
“Providers who undermine the integrity of the Department of Defense health care system for their own selfish gain will be held accountable for their actions,” said Special Agent in Charge Cynthia A. Bruce, DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS and our investigative partners will aggressively pursue those who divert funds intended for military families.”
“Providers who submit false claims to Medicare undermine the integrity of federal health care programs," said Tamala E. Miles, Special Agent in Charge with the U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG). "HHS-OIG is proud to work alongside our law enforcement partners to ensure that all health care providers who misuse their medical professional status for financial gain are held accountable."
The CSA subjects all registered handlers of controlled substances to strict requirements regarding the inventory control and recordkeeping of controlled substances. These requirements ensure that DEA registrants account for controlled substances from the time that they are purchased until the time that they are delivered to other registrants, dispensed to patients, or discarded. The CSA’s recordkeeping requirements play a vital role in ensuring the appropriate handling, accounting and distribution of controlled substances.
The FCA is a federal law that imposes civil liability on any persons or entities who submit, or cause to be submitted, false claims for payment on the federal government or its contractors. The liability that can be imposed under the statute is treble damages (that is, three times the loss caused by the false claims) and a civil penalty between $12,537 to $25,076 per false claim. The FCA is the primary authority used by the U.S. Attorney’s Office’s Civil Division to redress fraud, waste and abuse within federal programs, including, but not limited to, Medicare, Medicaid and TRICARE.
The claims resolved by this settlement are allegations only, and there has been no determination or admission of liability.
This case was investigated by Diversion Investigator Chris Crutchfield of DEA-Atlanta District Office, Special Agent Kevin White of the U.S. Department of Health and Human Services-Office of the Inspector General (HHS OIG) and Bryan Cofer of the U.S. Department of Defense-Defense Criminal Investigative Service. (DOD DCIS).
Assistant U.S. Attorneys Todd P. Swanson and W. Taylor McNeill represented the United States in the settlement agreement.