Skip to main content
Press Release

Three Indicted For Role In Suboxone, Laboratory Fraud Scheme

For Immediate Release
U.S. Attorney's Office, Western District of Virginia

ABINGDON, VIRGINIA – A Federal grand jury sitting in the United States District Court for the Western District of Virginia in Abingdon has indicted three individuals on healthcare fraud and kickback charges.

In an indictment returned today, the grand jury has charged Beth Palin, 46, of Bristol, Tenn., Joseph Webb, 52, of Bristol, Tenn., and Mary Curtiss, 59, of Bristol, Tenn., each with one count of healthcare fraud, one count of conspiracy to commit healthcare fraud and one count of offering or paying a kickback.

According to the indictment, Palin and Webb owned Bristol Laboratories and Mountain Empire Medical Care. Dr. Curtiss, an ear, nose and throat specialist, was the physician of record at Mountain Empire Medical Care. While working at Mountain Empire Medical Care, Curtiss purported to be running a substance abuse treatment program, prescribing Suboxone, Subutex and generic buprenorphine for the treatment of opiate addiction. Mountain Empire Medical Care operated on a cash-only basis and did not accept Medicare, Medicaid or insurance of any kind, charging cash patients as much as $250 per visit.

Mountain Empire Medical Care also required that every patient undergo a urine drug screen at every weekly appointment, which was sent exclusively to Bristol Labs, which did accept private insurance, Medicare and Medicaid. The urine drug screen was a precondition to getting a Suboxone prescription. Bristol Labs, Mountain Empire Medical Care, and CKK, a now-deceased doctor who operated a substance abuse clinic in the same manner as Mountain Empire Medical Care, and also exclusively used Bristol Labs for urine drug screens, treated insured patients with two different, expensive automated urine drug screens. Uninsured patients were treated using one, much cheaper non-automated test, referred to as a “point of care” or “quick cup” drug screen.

Medicaid, Medicare or a patient’s private insurance carrier were charged up to $2,000 for each urine drug screen for the in-house testing. Medicaid, Medicare or a patient’s private insurance carrier were additionally charged up to $1,125 for each urine drug screen confirmation sent to an outside laboratory. Insured patients paid nothing out of pocket for either test. Patients without insurance were charged between $10-$25 cash for the single “quick cup” drug screen.

While working as Mountain Empire Medical Care’s primary physician, Curtiss was paid $1,400 per day, no matter how much work she did or how many patients she saw. Curtiss’ salary was well above market value and was only possible due to the large income generated by her procedure of ordering each and every patient to undergo weekly drug screening at Bristol Labs. A Bristol Labs employee was also always working at Mountain Empire Medical Care, serving as office manager, urine drug screen “collector” and receptionist.

During the course of the scheme, Palin, Webb, Curtiss and CKW, caused fraudulent billing in the amount of $12,459,211 to be submitted to Virginia Medicaid, TennCare, Medicare and private insurance companies, and received over $1,203,000 to which they were not entitled.

If convicted each defendants faces up to 25 years in prison and fines of $750,000.

The investigation of the case was conducted by the Department of Health and Human Services, Office of Inspector General, the Virginia Office of the Attorney General, Medicaid Fraud Control Unit, the Tennessee Bureau of Investigation, the United States Attorney’s Office for the Eastern District of Tennessee, the Virginia State Police, the Bristol, Virginia Police Department, the Bristol, Tennessee Police Department, the Scott County Sheriff’s Office and the Internal Revenue Service, Criminal Investigations Division. Special Assistant United States Attorney Janine Myatt and Assistant United States Attorney Zachary Lee will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

Updated April 14, 2015