Prosecutors Ready to Target Pain Management

OVER THE PAST DECADE, many lab executives and pathologists have become aware of the abusive activities in the field of drugs of abuse testing and pain management testing. The frustration for those who understood the true scale of the fraud and abuse in this sector of healthcare was that no federal or state prosecutor seemed to be willing to tackle these problems and take enforcement actions against the guilty.

That is, with the exception of Martha Coakley, Attorney General for the state of Massachusetts. Clients of THE DARK REPORT have regularly read about her successful prosecutions of numerous drugs of abuse and pain management testing lab companies over the past six years. The question is this: If Coakley could bring these actions and win guilty pleas and sizeable settlements, what prevents other state attorneys general and the Department of Justice from doing the same with other labs—and physicians—doing pain management testing and engaged in illegal inducement or kickback arrangements?

Yes, there was the $16 million settlement of the federal whistleblower law-suit against AmeriTox, one of the earliest labs to move from drugs of abuse testing into pain management services. Back in 2010, AmeriTox agreed to settle the case for $16 million. But the buzz on the street is that, following this settlement, multiple labs in this sector continue to offer illegal inducements and kickbacks. Florida even passed a law to more objectively define illegal behavior. (See TDR, June 4, 2012.) However, THE DARK REPORT is unaware that Florida authorities have used this law to initiate enforcement actions against any lab organizations operating in the state.

Thus, events in California may mark a turning point in how regulators view the drugs of abuse and pain management sectors. Earlier this month, California officials singled out at least 29 rehab clinics for fraudulent activities. It was an exposé by CNN that triggered this action. Further, both the New York Times and The Wall Street Journal are reporting that the drug screening market is now $2 billion per year in the United States. (See this article.)

Evidently, public and private payers can no longer ignore the multi-billion dollar cost of drug screening and its rapid growth. We can only hope that those fly-by-night lab operators who entered the drug screening business in recent years are about to face enforcement action because of their illegal activities.