Tennessee Business Owner Convicted in $35M Health Care Fraud Scheme

A Tennessee business owner, Michael Kestner, 72, of Nashville, was convicted by a federal jury on charges of defrauding federal health care programs of approximately $35 million.

Over nearly eight years, Kestner directed medically unnecessary injections at his network of pain clinics, Pain MD, targeting opioid-dependent patients.

According to evidence presented at trial, Kestner owned, operated, and managed Pain MD clinics across Tennessee, North Carolina, and Virginia.

Although Kestner is not a licensed physician, he pressured nurse practitioners and physician assistants at Pain MD clinics to administer frequent back injections to patients who sought opioid treatment. Testimony revealed that patients who refused injections risked being denied care and experiencing withdrawal symptoms from their opioid medications.

The trial evidence further showed that these injections were consistently billed as Tendon Origin Insertion injections (TOIs), despite almost none of the patients being diagnosed with tendon pain.

Many of the injections billed as TOIs would have been medically impossible to administer with the equipment available at the clinics. Kestner pressured providers at Pain MD to continue these practices to maximize billings, even sending emails ranking practitioners’ “production” and criticizing those with “below average” injection counts.

Despite repeated warnings from insurance companies about improper billing, including a lawsuit, Kestner continued these practices. As a result, Pain MD became Medicare’s highest biller of TOI procedures nationwide, with an eightfold billing rate compared to the second-highest biller.

Kestner was convicted of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. His sentencing is scheduled for February 27, 2025, where he faces up to 10 years in prison for each count. A federal district court judge will determine the final sentence after reviewing the U.S. Sentencing Guidelines and other statutory factors.

This article, "Tennessee Business Owner Convicted in $35M Health Care Fraud Scheme" was first published on Small Business Trends