Greenville chiropractor Daniel McCollum pled guilty earlier this month to engaging in conspiracy to pay illegal kickbacks and defrauding health care programs by billing for unnecessary medical services. The plea was entered in U.S. District Court, according to a news release.
The maximum criminal penalty McCollum could face is five years in prison and a fine of $250,000 following the U.S. District Court for the District of South Carolina’s $9 million civil consent judgement against the chiropractor.
McCollum owned and operated pain management clinics, laboratories and a pharmacy throughout Greenville, Spartanburg, Anderson, Easley, North Carolina and Tennessee.
These operations included Oaktree Medical Center, First Choice Healthcare, Labsource, Pain Management Associates of the Carolinas, Pain Management Associates of North Carolina and ProLab, ProCare Counseling Center, according to court documents.
Under the whistleblower provisions of the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the recovery.
In 2019, five former employees of McCollum’s clinics, Donna Raunch, Muriel Calhoun, Brandy Knight, Karen Mathewson and Tracy Hawkins, filed an action on behalf of the United States alleging that McCollum’s clinics and laboratories provided illegal financial incentives to doctors and mid-level providers to induce the referrals of urinary drug tests.
The claim also accused him of billing federal health care programs for unnecessary urinary drug testing and billed or caused to be billed false claims for steroid injections, opioid prescriptions and lidocaine ointment prescriptions that were medically unnecessary or lacked a legitimate medical purpose — often without the knowledge or approval of the patients’ health care providers.
“Improper financial relationships between health care providers and laboratories can lead to overutilization and increase the cost of health care services paid for by the taxpayers,” Acting Assistant Attorney General Brian M. Boynton from the Justice Department’s civil division, said in the news release. “The provision of medical services and prescriptions should be based on a patient’s medical needs rather than the financial interests of providers.”
For two years, the clinics and labs under McCollum’s management or ownership, however, failed to defend against allegations, resulting in a $136 million judgement on Sept. 2, the release said.
Eventually, on Oct. 29, McCollum agreed to resolve the government’s allegations. He pled guilty to violating the anti-kickback statute that prohibits offering or paying anything of value to induce the referral of items or services covered by federal health care programs.
He acknowledged that Labsource gave referring providers an opportunity to earn revenue generated from their commercially insured UDT referrals as an inducement for those providers to refer all of their federally insured UDT patients to his testing lab.
His prescription of unnecessary treatments constituted misrepresentations, fraudulent omissions and deceptive conduct with an intent to make the United States to pay false or fraudulent federal health care program claims, he said in the plea agreement.
“The Tricare Program is vital to the health and readiness of our active duty service members, retirees and their families,” Christopher Dillard, special agent in charge for the Defense Department’s Office of Inspector General’s Defense Criminal Investigative Service, said in a release. “Today’s announcement should leave no doubt that DCIS and its law enforcement partners remain committed to rooting out fraud, holding bad actors accountable and protecting the integrity of the Department of Defense.”
A sentencing date for McCollum has not been set, according to the release.
The civil judgment and criminal plea were the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of South Carolina, with assistance from the FBI, HHS-OIG, the South Carolina Attorney General’s Office and the Department of Defense Office Inspector General’s Defense Criminal Investigative Service.
The litigation was handled by attorneys Yolonda Campbell, Michael Kass, Christopher Terranova and David Wiseman and Assistant U.S. Attorneys Beth Warren and Bill Watkins for the District of South Carolina.
“This office will use all tools necessary to ensure justice, deterrence and prevention of health care fraud,” M. Rhett DeHart, acting U.S. attorney for the District of South Carolina, said in the release. “The criminal guilty plea and the civil consent judgment entered against the defendant in this case demonstrates that effort.”