Pain Management Associates accused of defrauding taxpayers

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A group of local pain management clinics is being sued by the United States government for fraudulent claims among other issues. 

In October, the FBI raided Pain Management Associates offices in Spartanburg, Easley, and Greenville. Newly unsealed court documents reveal the federal government has been investigating the practices, their parent company Oaktree Medical Centre and its owner, Dr. Daniel McCollum, for years. They’re accused of improperly billing federal programs, including Medicare and Medicaid. 

The investigation began after former Oaktree Medical Centre employees filed whistleblower lawsuits. Three former employees sued jointly in 2015. The fourth filed a lawsuit in 2017. The U.S. Department of Justice picked up parts of their cases to sue on behalf of U.S. taxpayers, according to court records. 

Pain Management Associates serves patients in Anderson, Easley, Greenville, and Spartanburg, as well as western North Carolina. 

Former employees allege in lawsuits that practices set up schemes to pad doctors’ pockets and bill the federal government for benefits that weren’t always necessary. 

“They primarily involve the prescriptions for opioid medications and urine drug testing that’s associated with those types of prescriptions,” said attorney David Rothstein, who represents the plaintiffs in one of the whistleblower lawsuits. 

Employment attorney John Reckenbeil told 7 News the federal government typically elects to intervene in whistleblower cases when they involve large sums of money. 

“In the medical field, you’re talking you know, in the tens of millions of dollars,” Reckenbeil said. 

The whistleblower lawsuit filed in 2017 claims the majority of patients treated by McCollum’s enterprise were on Medicare or Medicaid. The suit said about 20 doctors were employed by Pain Management Associates’ parent company, and each doctor had an average of about 75 visits per day, with the typical office visit billed for about $395. According to those numbers, the total billed per day would be more than $592,000. 

But according to the suit filed by Rothstein, that wasn’t even the medical group’s biggest money maker. 

“It got to the point where I think Oaktree Medical was making more money on the urine tests than it was, you know, in clinical billing for seeing patients,” Rothstein said.

So why does that matter? Pain practices often drug test patients to make sure they’re not selling their pills or mixing them with something dangerous. According to Rothstein’s suit, Oaktree owner Dr. Daniel McCollum also owned the lab that tested patients’ urine samples – LabSource. According to the suit, Oaktree’s doctors’ and physician assistants’ compensation depended on how many health services they referred, which included sending out urine tests.

Rothstein said that’s illegal. 

“One of the allegations we have raised is that the doctors in the practices were incentivized to put their patients on opioid medications rather than an over the counter pain reliever like a Tylenol,” Rothstein said.

LabSource declined to comment. Dr. McCollum did not return 7 News’ requests for comment.

The Justice Department also did not respond to requests for comment. 

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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