A group of South Carolina healthcare providers, laboratories, and testing facilities owned or managed by chiropractor Daniel McCollum will pay a total of $140 million to the U.S. government after failing to defend against charges of kickback schemes and unnecessary testing brought forth by a whistleblower complaint. According to the U.S. Department of Justice (DOJ) The companies, Oaktree Medical Centre P.C. (Oaktree), FirstChoice Healthcare P.C. (FirstChoice), Labsource LLC (Labsource), Pain Management Associates of the Carolinas LLC (PMA of the Carolinas) and Pain Management Associates of North Carolina P.C. (PMA of North Carolina), allegedly provided illegal financial incentives to providers who were considering using their services. The government also alleges that ProLab LLC (ProLab) and ProCare Counseling Center LLC (ProCare) billed federal medical programs for unnecessary urine drug tests.
The Stark Law and the Anti-Kickback Statute prohibit “offering or paying anything of value to induce the referral of items or services covered by federal health care programs, including laboratory testing services.” These laws are designed to make sure that any kind of testing or medical service provided to patients is medically necessary and not predicated on a preexisting financial or gift-giving relationship.
The five whistleblowers involved in the final settlement filed three separate qui tam cases against the organizations owned or managed by McCollum. Donna Rauch, Muriel Calhoun, Brandy Knight, Karen Mathewson and Tracy Hawkins will collectively receive a portion of 15 to 30% of the total $140 million amount, which will be split between the whistleblowers.
In its complaint, filed on May 31, 2019, the United States alleged that Oaktree, FirstChoice, Labsource, PMA of the Carolinas and PMA of North Carolina — all of which were owned or operated by chiropractor Daniel McCollum — provided 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 United States also alleged that ProCare, a substance abuse counseling clinic, and ProLab, a urine drug testing laboratory partially owned by McCollum, billed federal health care programs for unnecessary urine drug tests. McCollum answered the United States’ complaint and remains a party to the ongoing litigation.
Congress passed the Stark Law and the Anti-Kickback Statute to prevent financial incentives from improperly influencing medical decision-making, which can lead to excessive and unnecessary tests and services. Among other things, the Stark Law prohibits billing Medicare for laboratory testing services referred by a physician who has a financial relationship with the laboratory. The Anti‑Kickback Statute prohibits offering or paying anything of value to induce the referral of items or services covered by federal health care programs, including laboratory testing services.