Five years in the past, the CEO of one of the largest pain clinic companies within the Southeast was sentenced to greater than three years in jail after being convicted in a $4 million unlawful kickback scheme.
But after simply 4 months behind bars, John Estin Davis walked free. President Donald Trump commuted Davis’ sentence within the final days of his first time period. In a press release explaining the choice, the White House said that “no one suffered financially” from Davis’ crime.
In courtroom, nevertheless, the Trump administration was saying one thing very completely different. As the president let him go, the Department of Justice alleged in a civil lawsuit that Davis and his firm defrauded taxpayers out of tens of thousands and thousands of {dollars} with extreme urine drug testing. The DOJ alleged that Comprehensive Pain Specialists made such a “staggering” sum from cups of pee that staff had given the testing a profit-minded nickname: “liquid gold.”
Davis and the corporate denied all allegations in courtroom filings and settled the DOJ’s fraud lawsuit with none willpower of legal responsibility. Davis declined to remark for this text.
John Estin Davis, former CEO of Comprehensive Pain Specialists, who was convicted of well being care fraud, was granted clemency by President Donald Trump in 2021. At the identical time, the Department of Justice was suing Davis for allegedly orchestrating a a lot bigger well being care fraud scheme. Davis and CPS later settled the lawsuit with none admission of wrongdoing.(Heidi de Marco/KFF Health News)
Since returning to the White House, Trump has stated he’ll goal fraud in Medicare, Medicaid, and Social Security, and his Republican allies in Congress have made combating fraud a key argument of their plans to slash spending on Medicaid, which supplies well being take care of thousands and thousands of low-income and disabled Americans. During an deal with to Congress final month, Trump stated his administration had discovered “hundreds of billions of dollars of fraud” with out citing any particular examples of fraud.
“Taken back a lot of that money,” Trump stated. “We got it just in time.”
But Trump’s historical past of displaying leniency to convicted fraudsters contrasts together with his present-day crackdown. In his first and second phrases, Trump has granted pardons or commutations to at the least 68 individuals convicted of fraud crimes or of interfering with fraud investigations, in keeping with a KFF Health News evaluate of courtroom and clemency records, DOJ press releases, and information experiences. At least 13 of these fraudsters have been convicted in circumstances involving greater than $1.6 billion of fraudulent claims filed with Medicare and Medicaid, in keeping with the Department of Justice.
And as one of many first actions of his second time period, Trump fired 17 independent inspectors general chargeable for rooting out fraud and waste in authorities.
“It sends a really bad message and really hurts DOJ efforts at creating deterrence,” stated Jacob Elberg, a former assistant U.S. lawyer and regulation professor at Seton Hall University in New Jersey. “In order to reduce health care fraud, you need people both to be afraid of getting in trouble, but also for people to believe in the legitimacy of the system.”
Elberg stated appreciable fraud in Medicare and Medicaid exists largely as a result of the applications’ “pay-and-chase models” prioritize paying for affected person care first and monitoring down stolen {dollars} second. To forestall extra fraud, the applications would doubtless have to be redesigned in ways in which can be slower and extra cumbersome for all sufferers, Elberg stated.
Regardless, Elberg stated the president’s claimed give attention to fraud seems to be a pretext for slashing spending that has been legally appropriated by Congress. Trump has empowered the Elon Musk-led Department of Government Efficiency, which he established and named by govt order, to make deep cuts in federal budgets, halting some medical analysis and help applications along with chopping spending on local weather change, transgender well being, and variety, fairness, and inclusion applications.
“What’s been the focal point to date of the administration is not what anybody has ever referred to as health care fraud,” Elberg stated. “There is a real blurring — a seemingly intentional blurring — between what is actually fraud and what is just spending that they are not in favor of.”
Jerry Martin, who served as a U.S. lawyer for the Middle District of Tennessee beneath President Barack Obama and now represents well being care fraud whistleblowers, additionally stated Trump’s give attention to fraud gave the impression to be “just a platform to attack things that they don’t agree with” somewhat than “a genuine desire to root out and combat fraud.”
Even so, Martin stated a few of his whistleblower purchasers have been emboldened.
“I’ve had clients repeat back to me ‘President Trump says fraud is a priority,’” Martin stated. “People are listening to it. But I don’t know that what he’s saying translates into what they believe.”
The White House didn’t reply to requests for remark for this text.
A Billion-Dollar Fraud Case and Needless Eye Injections
Presidents benefit from the distinctive authority to erase federal convictions and jail sentences with pardons and commutations. In principle, the ability is meant to be a last bulwark in opposition to injustice or overly harsh punishment. But many presidents have been accused of utilizing the pardon energy to reward highly effective allies and shut associates as they go away the White House.
Trump issued about 190 pardons and commutations within the last two months of his first time period, together with for some well being care fraudsters convicted of schemes with astonishing prices.
For instance, Trump granted a commutation to Philip Esformes, a Florida well being care govt convicted in 2019 of a $1.3 billion Medicare and Medicaid fraud scheme. After he was sentenced, DOJ introduced in a press launch that “the man behind one of the biggest health care frauds in history will be spending 20 years in prison.” Trump freed him 14 months later.
Trump additionally granted a commutation to Salomon Melgen, a Florida eye physician who was serving a 17-year jail sentence for defrauding Medicare of $42 million. Melgen falsely identified sufferers with eye ailments, then gave them pointless care, together with laser remedies and painful eye injections, in keeping with DOJ and courtroom paperwork.
“Salomon Melgen callously took advantage of patients who came to him fearing blindness,” stated a DOJ news release after Melgen was sentenced in 2018. “They received medically unreasonable and unnecessary tests and procedures that victimized his patients and the American taxpayer.”
DOJ: $70 Million Spent on ‘Excessive’ Urine Testing
Despite the flurry of pardons and commutations on the finish of Trump’s first time period, the leniency he confirmed Davis was distinctive. Davis was the one convicted well being care fraudster to obtain clemency whereas the Trump administration was concurrently accusing him of extra fraud.
As CEO of Comprehensive Pain Specialists from 2011 to 2017, Davis oversaw a fast enlargement to greater than 60 areas throughout 12 states, in keeping with federal court documents.
He was indicted in 2018 for utilizing his CEO place to refer Medicare sufferers in want of medical tools to a conspirator in return for kickbacks paid via a shell firm, in keeping with courtroom paperwork. He was convicted at trial in April 2019 of defrauding Medicare.
Three months later, the DOJ filed a fraud lawsuit in opposition to Davis and CPS that piggybacked on the claims of seven whistleblowers. The lawsuit alleged that CPS collected greater than $70 million from federal insurance coverage applications for urine drug testing, most of which was “excessive,” and that an audit of a sampling of the exams had discovered at the least 93% “lacked medical necessity.”
A urine pattern is displayed on the Comprehensive Pain Specialists laboratory in 2017. The Department of Justice has alleged in a fraud lawsuit that samples like this one have been examined excessively, generally as much as 51 instances. CPS denied all allegations and settled the lawsuit with out admitting any legal responsibility.(Heidi de Marco/KFF Health News)
Typically, authorities insurance coverage applications pay for urine testing so ache clinics can confirm that sufferers are taking their prescriptions correctly and never abusing some other medicine, which might contribute to an overdose. Patients may very well be examined as little as every year or as typically as month-to-month relying on their degree of threat, in keeping with the DOJ lawsuit.
But Comprehensive Pain Specialists carried out “myriad urine drug testing on virtually every CPS patient on virtually every visit” then carried out “at least 16 different types of tests” on every pattern, and generally as many as 51, in keeping with the lawsuit.
Trump commuted Davis’ sentence for his felony conviction in January 2021 because the DOJ was finalizing a settlement within the civil lawsuit. The commutation was supported by nation music star Luke Bryan, in keeping with a White House assertion.
Months later, with President Joe Biden in workplace, CPS and its homeowners agreed to repay $4.1 million — lower than 10% of the damages sought within the go well with — and the case was closed.
In the settlement, Davis agreed to not take any job the place he would ever once more invoice Medicare or different federal well being care applications. He was not required to personally repay something.
Martin, who represented one of many whistleblowers who first raised allegations in opposition to Davis and CPS, stated the leniency that Trump confirmed to him and different well being care fraudsters might discourage DOJ staff from pursuing comparable investigations throughout his second time period.
“There are a lot of rank-and-file people who are operating at the lowest point in their professional careers, where they’ve seen a lot of their work essentially be water under the bridge,” Martin stated. “That’s got to be really demoralizing.”
Brett Kelman:
bkelman@kff.org,
@BrettKelman
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