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Press Release

United States and Tennessee File Suit Against Lenoir City Chiropractor and Manchester Physician

For Immediate Release
U.S. Attorney's Office, Middle District of Tennessee
Suit Alleges Defendants Defrauded Medicare and TennCare of Over $1 Million While Operating Four Pain Clinics

The United States and Tennessee filed suit in U.S. District Court in Nashville today, alleging that Matthew Anderson, a Chiropractor from Lenoir City, Tenn., and David Florence, a Doctor of Osteopathy from Manchester, Tenn., made fraudulent claims to Medicare and TennCare in violation of the False Claims Act and the Tennessee Medicaid False Claims Act, announced David Rivera, U.S. Attorney for the Middle District of Tennessee.  The suit also names the Cookeville Center for Pain Management; Preferred Pain Center of Grundy County; McMinnville Pain Relief Center; and PMC Management; and claims that the defendants have been unjustly enriched and caused Medicare and TennCare to pay out money through mistake of fact. 

“The U.S. Attorney’s Office will work with our federal and state partners and aggressively pursue those who seek to profit at the expense of taxpayers,” said U.S. Attorney David Rivera.  “It is imperative that those who profit from dispensing pain medication always consider the well-being of patients as well as the addiction epidemic facing this country.”

Anderson is a chiropractor who operated four pain clinics in Tennessee.  Although several of these clinics changed names at times, they were recently known as Cookeville Center for Pain Management; Spinal Pain Solutions in Harriman, Tenn; Preferred Pain Center of Grundy County in Gruetli Laager, Tenn; and McMinnville Pain Relief Center.  Anderson operated these clinics both on his own and later through his management company, PMC Management.  All of the clinics are now closed, except that the clinic in Harriman, Tenn. now operates under a new name with new owners.

According to the complaint, Anderson believed that medical clinics had to have a physician owner, so he recruited several physicians to serve as the sham owners of the four pain clinics, while Anderson, and later his company PMC, managed the clinics.  In fact, according to the complaint, Anderson was the true owner who controlled the pain clinics during the entire time they were in operation.

The complaint alleges that the four pain clinics engaged in the following fraud schemes:

  • Anderson operated Cookeville Center for Pain Management as a pill mill in which a nurse practitioner wrote prescriptions for controlled substances for Medicare and TennCare patients that had no legitimate medical purpose. Medicare and TennCare ultimately paid for those prescriptions, which were not allowable under Program rules.

  • Anderson instructed employees at the four pain clinics to upcode office visits, by assigning an inaccurate billing code to increase Medicare reimbursement.

  • Anderson continued to allow the pain clinics in Cookeville and Harriman to operate as pain management clinics and bill Medicare for services during a period in 2012 in which medical directors were not on site for the minimum time during operating hours as required by Tennessee law governing pain management clinics.As a result, according to the complaint, Medicare paid for non-reimbursable office visits, injections, and controlled substances prescriptions written by nurse practitioners at the clinics, without the required oversight of a medical director.

  • In addition, David Florence, a doctor of osteopathy in Manchester, Tenn., who was one of the sham physician owners, also ran a pill mill out of his Center for Advanced Medicine in Manchester.

According to the complaint, Anderson reaped over $5 million from the four pain clinics, and took over 90% of the pain clinics’ profits, while the sham physicians only earned a salary for their service as medical directors.  The government alleges that the scheme defrauded Medicare and TennCare of at least $1 million.  The United States and Tennessee are seeking to recover treble damages plus penalties pursuant to the False Claims Act.

"These defendants allegedly supplied narcotics to patients without regard to medical need," said Derrick L. Jackson, the Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General in Atlanta. "The result was an expansion of abuse and addiction to controlled substances which enriched the defendants at the expense of the taxpayers."

“Our office is dedicated to fighting Tennessee’s prescription drug crisis with every tool at our disposal,” said Tennessee Attorney General Herbert H. Slatery III. “Pursuing individuals who attempt to take advantage of the system serves as a deterrent and helps protect the integrity of our healthcare programs.”

“Like many states, Tennessee is battling a prescription drug epidemic,” said TBI Director Mark Gwyn. “We want to hold those accountable who unnecessarily provide prescription drugs with no regard for the taxpayer’s dime and ensure legal medications get in the hands of citizens who really need them.”

The allegations in today’s complaint were originally raised in a lawsuit filed by the former office manager in the Cookeville pain clinic.  She brought her claims under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of false claims to bring civil suits on behalf of the government and to share in any recovery. 

The case was investigated by the Department of Health and Human Services, Office of Inspector General, and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit.  Assistant U.S. Attorney Ellen Bowden McIntyre represents the United States, and Assistant Attorney General Philip Bangle represents Tennessee.

The case is docketed as United States ex rel. Norris v. Anderson, No. 3:12-cv-00035 (M.D. Tenn.).  The claims in the complaint are allegations only, and there has been no determination of liability.

Updated March 24, 2016

Health Care Fraud
Prescription Drugs