By Mark Tosczak
Correction: An earlier version of this story incorrectly described Shephard Lee Spruill’s former employer and job title.
Pain clinics in Winston-Salem and Roanoke Rapids have come under new ownership as their Tennessee-based parent company has closed practices in multiple states and its former CEO faces Medicare fraud charges. Other clinics in North Carolina are also facing changes.
According to Kaiser Health News, Comprehensive Pain Solutions, which owned the locations, was once one of the largest pain management groups in the Southeast, treating as many as 48,000 patients a month in more than 50 clinics.
But in April, federal prosecutors charged former CPS CEO John Davis of Brentwood, Tenn., of conspiring to defraud Medicare and paying and receiving kickbacks. He was charged along with Brenda Montgomery of Camden, Tenn., owner and CEO of CCC Medical Inc., a medical devices company.
Prosecutors allege that Montgomery paid Davis $770,000 in bribes in exchange for him referring patients to her company, and that she fraudulently billed Medicare for more than $4.6 million. CPS also faces civil suits from contractors and two doctors, alleging the company failed to pay bills and otherwise didn’t live up to its obligations, Kaiser has reported.
In Roanoke Rapids, the Comprehensive Pain Solutions clinic has now changed hands to become one of a dozen pain-management clinics run by Greenville-based East Carolina Anesthesia Associates.
Christopher Gay, the clinic manager, said the physician there, Dr. Joey Thomas, had started negotiating an exit from CPS in February. “We’ve fully transitioned over,” he said.
The Winston-Salem CPS clinic has been purchased by High Point-based Bethany Medical Center, according to the Triad Business Journal. The fate of two other practices, in Kernersville and Elkin, is unclear, though the Business Journal reported that Bethany was negotiating to buy them, too.
Bethany CEO Dr. Lenny Peters couldn’t be reached Friday.
Davis and Montgomery, according to multiple media outlets, have both pleaded not guilty.
Pain management physicians are also coming under increased scrutiny from regulators, insurers and others because opioids are sometimes used to treat severe pain. North Carolina and other states are battling high rates of opioid overdoses.
The prosecutions come amid a flurry of high-profile cases executed over the past year by the U.S. Department of Justice that have swept up multiple North Carolina health care executives charged with financial misdeeds.
In May, Shephard Lee Spruill, the former president of Carolina Support Services, was sentenced to 8 years in prison and ordered to make restitution of almost $6 million in a Medicaid fraud case that involved other Pitt County mental health providers. Spruill had supplied names and identifying data to Terry Lamont Speller, who had another man, Donnie Lee Phillips, bill North Carolina’s Medicaid program for undelivered services. The three men then split their fraudulently acquired payments.
Speller and Phillips have also been given to prison sentences.
And at the end of June, federal justice officials announced two defendants in North Carolina’s middle district were charged with conspiracy to defraud the federally funded Medicare program out of more than $4 million as part of a multistate action against 601 individuals responsible for about $2 billion in health care fraud.
All this activity comes as large managed care companies and states themselves are also coming under increased scrutiny from federal regulators. In late June, the federal Centers for Medicare and Medicaid Services announced it would begin auditing how states are setting rates for and paying managed care companies that deliver Medicaid services to patients.