Feds: CRNA Group Offered Free Drugs to ASCs for Exclusive Contracts

The group denies any wrongdoing, calling the pay-to-play claims “meritless” and the product of a “disgruntled” ex-employee.

Did an anesthesia group give its ASCs free propofol in exchange for lucrative contracts?

An anesthesia group that allegedly offered free medications to ambulatory surgery centers in exchange for the facilities granting the group exclusive contracts has agreed to pay more than $1 million as part of a settlement with the federal government.

The Sweet Dreams Nurse Anesthesia (SDNA) group, which provides CRNA services in Michigan and Georgia, will pay the settlement to resolve a whistleblower case that claimed that the group ran several schemes to illegally pay healthcare providers kickbacks for referrals of Medicare and Medicaid patients. The government says it investigated the group for nearly 2 years after a whistleblower came forward with concerns about potentially fraudulent activities.

In a news release, the U.S. Attorney’s Officeclaims that SDNA provided free medications to ambulatory surgical centers in return for exclusive contracts for their anesthesia services. The government also alleges that the group made an agreement to fund the construction of an ASC in Marietta, Ga., in exchange for the center contracting exclusively with the group. The agreement allegedly stipulated that other podiatry-based centers affiliated with this new ASC would also grant exclusive contracts with SDNA.

SDNA “vigorously denies any wrongdoing,” says the group’s attorney, Abby Pendleton. She says the group entered into the settlement agreement simply “as a business decision” so it could avoid litigation costs and return its focus to its clients. Ms. Pendleton says that the allegations arose when a “disgruntled ex-affiliate” filed the “numerous, meritless claims” after his relationship with the group ended.

Ms. Pendleton says there were 2 main issues at the core of the case. The first concerned a program where SDNA would purchase propofol for use in ASCs, and then bill applicable third-party payers. She says the allegations arose from “a short period of time where SDNA, due to administrative glitches, did not invoice the ASCs for the minimal propofol costs for the use in surgery on Medicare patients.”

The second issue — involving the funding of a new ASC for exclusive contracts — was simply a “failed joint venture,” she says.

“Unfortunately, SDNA’s joint venture partner failed to uphold their end of the bargain,” says Ms. Pendleton. “The government alleged that the joint venture partner’s failure was a kickback. Note that SDNA is currently in active litigation with the joint venture partner.”

As part of the settlement, SDNA agreed to pay the U.S. government $1,034,416, and the state of Georgia $12,078.79. Adam Nauss, CRNA, the whistleblower in the case will also receive a portion of the settlement payment, as per federal guidelines.

“It takes a lot of courage for someone in an organization to stand up and report fraud committed against the government,” says Brandon Peak, an attorney representing Mr. Nauss. “My client had that courage and I am proud to represent him. We are pleased that the case has been resolved and appreciate the government’s assistance in bringing this case to a close. We hope this case serves as a reminder that there is no substitute for doing things the right way.”