April 10, 2018

Tennessee Health Care Executives Charged in Kickback Scheme

By the C|C Whistleblower Lawyer Team

The DOJ charged two Tennessee health care executives, John Davis and Brenda Montgomery, for their alleged participation in a $4.6 million Medicare kickback scheme involving durable medical equipment.  Davis is the former CEO of pain management company Comprehensive Pain Specialists (CPS).  Montgomery is the owner of medical equipment company CCC Medical Inc.  See DOJ Press Release.

According to the government, from at least 2011 through 2017, Montgomery agreed to pay Davis illegal kickbacks in exchange for Medicare referrals for medical equipment from CCC. Specifically, the government claims Montgomery paid Davis 60 percent of Medicare proceeds collected on claims billed for equipment ordered by CPS providers and referred by Davis.  In addition, Davis and Montgomery allegedly acted to conceal their illegal agreement by making their illegal payments through a nominee, creating and filing false tax documents, and taking other steps to keep their arrangement hidden from Medicare and from CPS owners and employees.  Overall, the government claims that Montgomery, through CCC Medical, submitted roughly $4.6 million in fraudulent claims to Medicare stemming from roughly $770,000 in illegal kickbacks to Davis.

In announcing its charges against Davis and Montgomery, the government stressed its commitment to go after illegal kickbacks:

Kickbacks such as those alleged in the indictment distort markets and undermine public trust.  . . .  Our Medicare program is designed to help those who are most vulnerable and in need of medical services and equipment.  Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need.  We will be un-relenting in our efforts to bring to justice, those individuals and corporations who choose to profit at the expense of the health of those individuals with the greatest need.

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