On October 27, the Department of Justice announced Kenneth Barngrover, M.D., and his practice, Southeast Regional Pain Center (SRPC), in Columbus, Georgia, will pay $1,000,000 in civil penalties. Barngrover operated a worker’s compensation pharmacy out of SRPC offices and was authorized to dispense controlled substances from that pharmacy. The $1,000,000 penalty is part of a settlement agreement to resolve allegations that the pain medicine practice violated both the Controlled Substances Act and the False Claims Act. 

The False Claims Act is a federal law that imposes civil liability on any persons or entities who submit false claims for payment on the federal government or its contractors. The liability under the statute is treble damages (three times the loss caused by the false claims) and a civil penalty between $12,537 to $25,076 per false claim. 

Barngrover and SRCP were accused of violating the act by billing Medicare and Tricare for medically unnecessary evaluation and management services, billing for evaluation and management services that were up-coded, and billing for psychological testing services that were inappropriately rendered.

Barngrover who was registered with the DEA as required, also allegedly violated the Controlled Substance Act. The Controlled Substance Act subjects registered handlers of controlled substances to strict requirements regarding the inventory control and recordkeeping of controlled substances. These requirements exist to ensure DEA registrants account for controlled substances from the time that they are purchased until the time that they are either delivered to other registrants, dispensed to patients, or discarded. 

At issue in the settlement were allegations that in the operation of his worker’s compensation pharmacy, Barngrover violated the Controlled Substance Act by failing to maintain a biennial inventory, failing to maintain a current, complete, and accurate record of controlled substances, and collecting medications without DEA authority or documentation of receipt. 

The claims resolved by this settlement are allegations only, and there has been no determination or admission of liability. The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations and false claims allegations.  If you need assistance with such a matter, please contact us today.