Two Tennessee healthcare execs charged in $4.6 million Medicare scheme

(MGN Online)

Two Tennessee health care executives are facing charges Monday for their roles in a $4.6 million Medicare kickback scheme involving durable medical equipment.

The U.S. Attorney's Office said John Davis, 40, of Brentwood and Brenda Montgomery, 69, of Camden were both arrested on Monday.

Davis is the former CEO of Comprehensive Pain Specialists, a large pain management company spanning multiple states. Montgomery is the owner, founder and CEO of CCC Medical Inc., a DME company with five locations in Tennessee and headquartered in Camden.

U.S. Attorney Don Cochran of the Middle District of Tennessee said the charges against Montgomery and Davis allege almost $750,000 in illegal healthcare kickbacks over $4.6 million false Medicare claims. Cochran's office said Montgomery and Davis used a nominee and filed false tax documents to disguise the kickbacks.

“Our Medicare program is designed to help those who are most vulnerable and in need of medical services and equipment,” said U.S. Attorney Cochran. “Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need. We will be un-relenting in our efforts to bring to justice, those individuals and corporations who choose to profit at the expense of the health of those individuals with the greatest need.”

Court documents say Montgomery paid Davis 60 percent of the Medicare proceeds in exchange for Davis directing his CPS employees and providers to send referrals to Montgomery's company from June 2011 to June 2017.

According to the unsealed indictment, Montgomery and Davis adjusted their agreement around May 2015 after Montgomery complained that her referrals from CPS had been lower than expected. Montgomery agreed to pay Davis $150,000 for the sham purchase of a shell entity known as ProMed Solutions LLC. The U.S. Attorney's Office said this was to induce Davis to continue driving CPS referrals to CCC Medical.

The indictment says Montgomery submitted over $4.6 million in fraudulent claims to Medicare through CCC Medical, and that Medicare paid a total of $2.6 million on those claims. Montgomery paid more than $770,000 in illegal kickbacks to Davis, according to the indictment.

Montgomery and Davis were each charged with one count of conspiracy to defraud the United States and to pay and receive health care kickbacks, and seven counts of paying and receiving health care kickbacks.

This case was investigated by HHS-OIG, DCIS and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit. Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee and Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and are prosecuting the case.

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