One of the largest pain management groups in the Southeast is closing multiple clinics amid worsening financial troubles and a federal criminal investigation that targeted its former chief executive.
Based in the Nashville area, CPS opened in 2005 and quickly grew into a powerhouse, which has treated as many as 48,000 pain patients a month, at more than 50 clinics in Tennessee and other states.
CPS did not respond to numerous requests for comment.
The doctor-owned company has endured a series of recent setbacks, including earlier clinic closures, pending lawsuits over alleged debts and the criminal case against former CEO John Davis.
In April, a federal grand jury in Tennessee indicted Davis on criminal kickback charges. He has pleaded not guilty. CPS also has faced nearly a dozen civil lawsuits from contractors alleging unpaid debts, including suits brought by two of its former doctors. A Justice Department official said the closure was not related to the criminal case against Davis.
The shutdown of the clinics comes amid growing backlash against the use of opioids for treating chronic pain. The opioid crisis has cost the U.S. economy more than $1 trillion since 2001, estimates Altarum, an economic research firm. Since 1999, at least 200,000 people have died nationwide from overdoses, according to the Centers for Disease Control and Prevention.
According to the company’s website, CPS now operates 40 clinics in eight states: Arkansas, Illinois, Indiana, Kentucky, Mississippi, North Carolina, Ohio and Tennessee. Half are in Tennessee. The Tennessean reported Tuesday that all 21 clinics in the state would be closing by the end of the month.
CPS was the subject of a November 2017 investigation by Kaiser Health News that scrutinized its Medicare billings for urine drug testing. Medicare paid the company at least $11 million for urine screenings and related tests in 2014, when five of CPS’ medical professionals stood among the nation’s top such Medicare billers. One nurse practitioner at a CPS clinic in Cleveland, Tenn., generated $1.1 million in urine-test billing that year, according to Medicare records analyzed by KHN.
Peter Kroll, an anesthesiologist and one of CPS’ founders, said at the time that the tests were justified to monitor patients against risks of addiction or reduce chances the pills might be sold on the black market. Kroll, who is the company’s current CEO and medical director, billed Medicare $1.8 million for urine tests in 2015, agency records showed.
Kroll took charge of the business when Davis left the company abruptly last summer. He could not be reached for comment Tuesday.
Federal prosecutors charged Davis with accepting more than $750,000 in illegal bribes and kickbacks in a scheme that billed Medicare $4.6 million for durable medical equipment.
“As CEO, Davis oversaw the substantial expansion of CPS, recruiting new physicians and clinics to join CPS, as well as directing various aspects of the company’s overall treatment of patients,” prosecutors wrote in a May court filing.
Davis has pleaded not guilty. The U.S. attorney’s office has said in court filings that CPS and its employees are “victims” in the case.
The company also has been hit with civil suits. Anesthesiologist Donald E. Jones sued the company in May 2017, alleging that it failed to honor his employment contracts.
Jones said he joined the firm in 2012 to staff three Tennessee clinics at a salary of $30,000 a month plus a percentage of fees from laboratory and other services. Jones argued that he generated collections in excess of $9 million. In 2016, the clinics served 41,364 patients, the busiest of all the clinics, according to the suit.
But in April 2016, according to the suit, CPS quit paying him and in February 2017 the company began transferring his patients to other clinics and “making disparaging remarks” about him to patients.
CPS countered that Jones failed to deliver “safe and effective medical care, which CPS in court filings attributed to an “ongoing compensation dispute.” The suit is pending.
Pain specialist William Wagner also is suing the company. He said he relocated from New Mexico to open a CPS clinic in Anderson, S.C., lured by the promise of $30,000 a month in salary and a share of the profits from urine tests and other services.
Instead, according to Wagner, CPS failed to collect bills for services he rendered and then closed the clinic. CPS denies Wagner’s claims and says it fulfilled its obligations under the contract. In a counterclaim, CPS argues that Wagner owes it $190,000. The case is pending.
Several contractors, including companies that leased office space and medical software, also have taken CPS to court alleging unpaid bills and leases, according to court filings. The cases are pending.
Kroll told KHN last year that he and fellow anesthesiologist Steve Dickerson came up with the idea for CPS in August 2005, over a cup of coffee at a Nashville Starbucks. At the time, Tennessee was confronting an emerging opioid epidemic.
Kroll, raised in North Carolina, had moved to Nashville to launch a career in anesthesiology, a specialty he chose after watching his older brother die from an agonizing disease with little help from pain specialists.
Joined by two other doctors, Kroll and Dickerson opened with a single storefront in suburban Hendersonville. Dickerson, who was elected to the Tennessee Senate in 2012, remains at CPS, according to its website. Calls to Dickerson’s office were not returned.
KHN’s coverage related to aging and improving care of older adults is supported in part by The John A. Hartford Foundation.