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Pain clinic owner agrees to pay $9M after admitting to billing fraud

The owner of pain management clinics, laboratories and a pharmacy in three states admitted to billing for unnecessary medical services and paying illegal kickbacks.

Daniel McCollum agreed to pay a $9 million judgment Nov. 8 to resolve whistleblower claims brought by former employees, according to a Nov. 22 statement from the Justice Department. He owned and operated facilities in South Carolina, North Carolina and Tennessee.

The U.S. filed a civil complaint against Mr. McCullum in May 2019, alleging he submitted false claims to federal healthcare programs because he paid kickbacks for urine drug-testing referrals and submitted claims for pain creams that weren't medically necessary, according to the statement. Mr. McCullum admitted to allowing referring providers to earn generated revenue from their commercially insured urine drug-testing referrals to encourage them to use his lab.

The U.S. government previously received judgments of $140 million to resolve fraud charges against pain management facilities Mr. McCollum owned: Oaktree Medical Centre, FirstChoice Healthcare, Labsource, Pain Management Associates of the Carolinas and Pain Management Associates of North Carolina.

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