On October 1, 2020, the United States Department of Justice (DOJ) announced a settlement with Advanced Pain Management Holdings, Inc. (APMH) and several of its subsidiaries – APM Wisconsin MSO (APM MSO), Advanced Pain Management LLC (APM LLC), and Advanced Pain Management S.C. (APMSC) – collectively “APM Entities,” agreed to pay $885,452 to settle claims that they violated the False Claims Act.
The case, initially brought by a whistleblower, alleged that the APM Entities performed confirmatory urine drug tests that were medically unnecessary. Certain situations even involved providers allegedly failing to customize orders for confirmatory urine drug tests based on each patient’s individualized risk assessment and circumstances, which resulted in a higher level of testing than was supported by their medical record.
The United States also alleged that APMH improperly gifted shares of incentive stock to non-employee APMSC physicians who performed pain management procedures at APMH’s ambulatory surgical centers. The incentive stock was to be redeemed upon a sale of APMH and was dependent upon APMH’s profitability, which was determined largely by referrals from the non-employee physicians. The incentive stock was allegedly given as a reward for past and anticipated referrals to APMH’s ambulatory service centers.
Further allegations included that APMH paid non-employee APMSC physicians to serve as medical directors in a manner that was tied to the volume of procedures at the ambulatory surgery centers. There were no written agreements documenting the services the medical directors were to provide, nor were the medical directors required to record or report any medical director functions.
“The financial arrangements pursued by APMH wrongly gave physicians an incentive to make medical decisions based on their own financial interests, rather than their patients’ interests,” said U.S. Attorney Matthew D. Krueger for the Eastern District of Wisconsin. “Medicare and Medicaid only pay for procedures and tests that are medically necessary and untainted by kickbacks. This settlement reflects our office’s continuing efforts to combat violations of the False Claims Act and improper arrangements under the Anti-Kickback Statute.”
As is typical in qui tam actions, the whistleblower will receive $142,152 as her share of the federal recovery.
The settlement amount took into consideration the company’s ability to pay, and is part of a broader settlement that resolves other various state law claims.