South Carolina Pain Clinics Face $140 Million in Judgments for Healthcare Fraud

A federal court in South Carolina has entered default judgments totaling $140 million against several pain management clinics and a substance abuse counseling center owned or operated by chiropractor Daniel McCollum.

The U.S. District Court for the District of South Carolina found that Oaktree Medical Centre P.C., FirstChoice Healthcare P.C., Labsource LLC, Pain Management Associates of the Carolinas LLC, and Pain Management Associates of North Carolina P.C. engaged in healthcare fraud by providing illegal financial incentives to providers to induce their referrals of urine drug tests in violation of the Stark Law and the Anti-Kickback Statute.

The court also found that ProCare Counseling Center LLC and ProLab LLC billed federal health care programs for unnecessary urine drug tests.

The judgments are the result of a complaint filed by the United States on May 31, 2019, alleging that the defendants engaged in healthcare fraud and false claims. The complaint was brought under the qui tam provisions of the False Claims Act by Donna Rauch, Muriel Calhoun, Brandy Knight, Karen Mathewson, and Tracy Hawkins, former employees of pain management clinics owned or operated by McCollum.

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of South Carolina, with assistance from the FBI, the Department of Health and Human Service’s Office of Inspector General, and the South Carolina Attorney General.

“Improper financial relationships between health care providers and laboratories can lead to overutilization and increase the cost of health care services paid for by the taxpayers,” said Acting Assistant Attorney General Brian M. Boynton. “We will continue to ensure that health care decisions are based on the needs of patients rather than the financial interests of providers.”

Defendant: Daniel McCollum, Oaktree Medical Centre P.C., FirstChoice Healthcare P.C., Labsource LLC, Pain Management Associates of the Carolinas LLC, Pain Management Associates of North Carolina P.C., ProCare Counseling Center LLC, ProLab LLC
Charges: Healthcare fraud, false claims, illegal financial incentives, Stark Law, Anti-Kickback Statute
City, State: Columbia, South Carolina
Exact Date: May 31, 2019
Sentence: $140 million in judgments
Dollar amounts: $136,025,077, $4,269,084.78

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