Ex-CEO Convicted in Medicare Kickback Scheme involving DME claims

NASHVILLE, Tenn. (April 9, 2019) —The former CEO of a pain management company was found guilty by a federal jury for his role in an illegal kickback scheme involving more than $4 million in tainted durable medical equipment (DME) claims to Medicare.

John Davis was the CEO of Comprehensive Pain Specialists (CPS) in Gallatin, Tenn., when he arranged for referrals of Medicare DME orders to his co-conspirator, Brenda Montgomery, and her company, CCC Medical of Camden, Tenn. Davis’ conviction came April 4 after a seven-day trial and was announced by the United States Department of Justice (DOJ). Sentencing has been scheduled for later this year.

Montgomery pleaded guilty in January and is scheduled to be sentenced May 3.

According to the DOJ news release, Davis was convicted of one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute and seven counts of violating the Anti-Kickback Statute.

The department said that Davis operated a shell company called ProMed Solutions, which he had registered in the name of his wife. Despite having no involvement with ProMed and performing no work, Davis’ wife and ProMed received over $770,000 in illegal kickbacks. Together, Davis and Montgomery pocketed over $2.4 million dollars in improper reimbursement from Medicare.

Davis used company funds from CPS to pay bonuses to CPS providers who ordered DME for Medicare beneficiaries and referred those orders to CCC Medical. Davis would receive 60 percent of the Medicare profit from those referrals, while the company he ran footed the bill.

CPS had as many as 40,000 patients across eight states before it abruptly closed its doors last year, according to The Tennessean.

The case was brought as part of the Medicare Fraud Strike Force, which maintains 14 strike forces operating in 23 districts. Since its inception in March 2007, the force has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.