South Carolina Healthcare Organizations To Pay $140 Million To Resolve Uncontested FCA Whistleblower Allegations


A group of South Carolina healthcare providers, laboratories, and testing facilities all owned or managed by chiropractor Daniel McCollum will pay a total of $140 million to the U.S. government after failing to defend against charges of kickback schemes and unnecessary testing brought forth by a whistleblower complaint. According to a September 3 U.S. Department of Justice (DOJ) press release, the companies, Oaktree Medical Centre P.C. (Oaktree), FirstChoice Healthcare P.C. (FirstChoice), Labsource LLC (Labsource), Pain Management Associates of the Carolinas LLC (PMA of the Carolinas) and Pain Management Associates of North Carolina P.C. (PMA of North Carolina), allegedly provided illegal financial incentives to providers who were considering using their services. The government also alleges that ProLab LLC (ProLab) and ProCare Counseling Center LLC (ProCare) billed federal medical programs for unnecessary urine drug tests.

The Stark Law and the Anti-Kickback Statute prohibit “offering or paying anything of value to induce the referral of items or services covered by federal health care programs, including laboratory testing services.” These laws are designed to make sure that any kind of testing or medical service provided to patients is medically necessary and not predicated on a preexisting financial or gift-giving relationship.

In a related default judgement dated July 20, 2021, courts ordered ProLab and ProCare to pay $4,269,084.78, which is a portion of the total $140 million for the unnecessary testing aspect of the judgement.

Kickback schemes in the medical profession are not victimless crimes. When organizations are allowed to successfully get away with schemes that wrongfully incentivize false billing, the entire medical system suffers as a result. Trust between doctors and patients is often irreparably damaged, and organizations are encouraged to expand fraudulent operations based on the success of the past schemes.

“Patients should not have to question whether their doctor recommended a test or procedure for personal gain,” said Acting U.S. Attorney M. Rhett DeHart for the District of South Carolina. “For years, these companies used improper financial incentives to generate health care provider referrals. This $140 million judgment is a cautionary tale of why health care fraud does not pay.”

The five whistleblowers involved in the final settlement filed three separate qui tam cases against the organizations owned or managed by McCollum. Donna Rauch, Muriel Calhoun, Brandy Knight, Karen Mathewson and Tracy Hawkins will collectively receive a portion of 15 to 30% of the total $140 million amount, which will be split between the whistleblowers. The amount of the reward has not yet been determined by the government. Bringing cases under the False Claims Act as a whistleblower has advantages for private citizens, and has been proven to effectively incentivize people to report fraud when they experience it. In just the last two weeks, WNN has reported on 3 separate medically related False Claims Act settlements, and more are being announced every week.

Read the DOJ’s press release here.

Read more False Claims Act/qui tam news on WNN.

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