Missouri Physicians and Pain Management Practices Agree to Pay Over $650,000 to Settle Kickback Allegations Involving Laboratory Testing

Gregory Stynowick, M.D. and his pain management practice, Pain Management Medical Center LLC, of Florissant, Missouri, and Chad Shelton, M.D., Michael Boedefeld, M.D., and their pain management practice, Pro Pain LLC, of St. Louis, have agreed to pay a total of $653,796 to resolve False Claims Act allegations that they received illegal kickbacks in violation of the Anti-Kickback Statute in return for referring patients for laboratory testing. The parties also have agreed to cooperate with the Justice Department’s investigations of, and litigation against, other participants in the alleged schemes.

“Kickbacks are designed to improperly influence healthcare providers’ medical decisions,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Patients should not have to wonder if their doctors’ medical decisions are being driven by unlawful inducements.”

The Anti-Kickback Statute prohibits offering, paying, soliciting or receiving remuneration to induce referrals of items or services covered by Medicare, Medicaid, and other federally funded healthcare programs. The Anti-Kickback Statute is intended to ensure that medical providers’ judgments are not compromised by improper financial incentives and are instead based on the best interests of their patients.

The settlements announced today resolve allegations that Drs. Stynowick, Shelton and Boedefeld, and their medical practices received kickbacks in violation of the Anti-Kickback Statute in return for making referrals to laboratories in Texas, California, and Florida.

• Stynowick and Pain Management Medical Center. Dr. Stynowick and his pain management practice, Pain Management Medical Center, have agreed to pay $257,436 to resolve two allegations. First, from May 2017 to July 2018, Pain Management Medical Center allegedly received thousands of dollars in payments from a purported management service organization (MSO) named Beachwood Services LLC (Beachwood) in return for Dr. Stynowick ordering laboratory tests from Landmark Diagnostics LLC (Landmark), a clinical laboratory in Houston, Texas, and Sprint Diagnostics LLC (Sprint), a clinical laboratory in Santa Ana, California. Second, from August 2018 to January 2020, Pain Management Medical Center allegedly received thousands of dollars in payments from a purported MSO named Alari Group LLC (Alari) in return for Dr. Stynowick ordering laboratory tests from Genesis Reference Laboratories LLC (Genesis), a clinical laboratory in Orlando, Florida, and InHealth Diagnostic LLC (InHealth), a clinical laboratory in Dallas, Texas.
• Shelton, Dr. Boedefeld, and Pro Pain. Dr. Shelton, Dr. Boedefeld, and their pain management practice, Pro Pain, have agreed to pay $396,360 to resolve two allegations. First, from February 2017 to September 2018, Pro Pain allegedly received thousands of dollars in MSO payments from Beachwood in return for Dr. Shelton and Dr. Boedefeld ordering laboratory tests from Landmark and Sprint. Second, from July 2018 to October 2020, Pro Pain allegedly received thousands of dollars in MSO payments from Alari in return for Dr. Shelton and Dr. Boedefeld ordering laboratory tests from Genesis, InHealth and American Institute of Toxicology Inc. (AIT), a clinical laboratory in Denton, Texas.

“Kickbacks can compromise medical practitioners’ judgment by creating financial incentives for certain medical decisions,” said U.S. Attorney Philip Sellinger for the District of New Jersey. “Doctors and clinical laboratories are on notice that kickback-for-test schemes like those alleged here can violate the Anti-Kickback Statute. We will continue to use all appropriate tools to safeguard the integrity of the federal healthcare systems.”

“Individuals and entities that participate in the federal healthcare system are required to obey the laws meant to preserve the integrity of program funds and the provision of appropriate, quality services to patients,” said Special Agent in Charge Naomi Gruchacz of the Department of Health and Human Services Office of Inspector General (HHS-OIG). “Certain violations of the Anti-Kickback Statute can induce medically unnecessary testing and inappropriately steer medical tests to providers who may not return timely or quality results.”

The settlements were the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of New Jersey, with assistance from HHS-OIG.

The settlements announced today were handled by Senior Trial Counsel Christopher Terranova of the Civil Division’s Commercial Litigation Branch (Fraud Section) and Assistant U.S. Attorney Kruti Dharia for the District of New Jersey.

The United States has recovered over $34 million relating to conduct involving MSO kickbacks to healthcare providers, including False Claims Act settlements with 39 physicians.

The government’s pursuit of these matters illustrates the government’s emphasis on combating healthcare fraud. One of the most powerful tools in this effort is the False Claims Act. Tips and complaints from all sources about potential fraud, waste, abuse, and mismanagement can be reported to the Department of Health and Human Services, at 1-800-HHS-TIPS (800-447-8477).

The claims resolved by the settlements are allegations only, and there has been no determination of liability.