Center for Pain Management: The Lab Payments Behind Thousands of Orders

Center for Pain Management and its physician owner agreed to pay at least $1.35 million to resolve allegations of laboratory kickbacks involving medically unnecessary urine drug tests paid for by Medicare and Medicaid. The government alleged that the clinic and its owner knew the tests were unnecessary and ordered them anyway in return for payments from the laboratory. For someone working inside a pain practice, the case connects the clinical decision to order a test with the money coming back from the company performing it.

The Justice Department announced the settlement on May 1, 2020. Center for Pain Management operated clinics in the Milwaukee metropolitan area, where its sole owner provided pain-management services. A whistleblower complaint under the False Claims Act brought the arrangement to the government.

How Lab Kickbacks Paid the Clinic for Its Orders

The government alleged that Midwest Laboratory Sales & Consulting and its owner paid Center for Pain Management and its physician owner in exchange for ordering urine drug tests performed by Midwest. The government alleged violations of the Anti-Kickback Statute and the False Claims Act.

Over an arrangement lasting more than five years, the government alleged, the clinic and its owner ordered thousands of unnecessary tests and received over $1 million in illegal kickbacks. Medicare and Medicaid paid for the testing.

The ordering side matters because a laboratory’s business begins with someone else’s clinical decision. The reason for a test belongs in the treating practitioner’s medical record. In this case, the government alleged that the clinic and physician making that decision also received the referral payments. The patient supplied the urine, the public programs paid, and the alleged return payment went to the ordering side.

The laboratory side had its own resolution. The Justice Department said it had previously resolved claims against Midwest and its owner, who admitted violating the False Claims Act and the Anti-Kickback Statute.

Why Thousands of Urine Drug Tests Matter

The 2021 Journal of Family Practice guide, Urine Drug Screening: A Guide to Monitoring Tx With Controlled Substances, recommends risk-based testing frequency. The alleged payments in this case reached the person deciding which tests to order and how often. In its discussion of addiction treatment, it makes the concern about automatic testing plain:

For an insider, the useful detail is why testing continued: what changed in the patient’s treatment and what the practice expected another result to tell it. That knowledge gives an order a context that a paid claim alone cannot supply.

The same guide describes ongoing assessment using the patient’s account, toxicology results, behavior and prescription-monitoring information. Its discussion of financial incentives identifies large, expensive panels, excessive frequency and unnecessary confirmatory testing as ways testing can become a source of profit at the patient’s expense.

That gives the medical-necessity allegation its practical meaning. A payment arrangement can reward more orders while the patient’s treatment calls for a particular test for a particular reason. The government alleged that Center for Pain Management kept ordering despite knowing the tests were unnecessary. Patients underwent needless testing, and taxpayers paid for it, according to those allegations.

What the Settlement Required Beyond the Minimum Payment

Center for Pain Management and its owner also agreed to contingent payments for the next five years, with the amounts tied to specified financial criteria.

They separately entered into an Integrity Agreement with the Department of Health and Human Services’ Office of Inspector General. The agreement provided for monitoring ongoing compliance with Medicare and Medicaid rules.

What Evidence Is Needed to Prove Fraud?

For an arrangement like the one alleged here, the useful evidence connects the clinic’s urine-test orders and patient-specific reasons with payments from Midwest.

What a Laboratory Whistleblower Case Can Pay

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. In the Center for Pain Management case, the government said its lawsuit resulted from a whistleblower’s qui tam complaint and that the whistleblower would receive a share of the settlement.

You Know Why the Tests Kept Coming

If you saw laboratory payments influence urine-test orders, speak to one of our whistleblower experts about how the lab paid for those orders. We bring in laboratory fraud whistleblower lawyers who understand referral payments and medical necessity, and stay beside you throughout the case. Your knowledge of the practice is where we start building your strongest laboratory kickback whistleblower case.