Tennessee Entrepreneur Convicted in $35 Million Health Care Fraud Scheme.
A federal jury has convicted Michael Kestner, a 72-year-old entrepreneur from Nashville, for orchestrating a staggering $35 million fraud scheme that exploited federal health care programs over nearly eight years. The jury found Kestner guilty of fraudulently billing for unnecessary medical injections, primarily targeting opioid-dependent patients at his network of clinics operating under the name Pain MD.
Court proceedings revealed a troubling pattern of abuse within Kestner's pain clinics, which spanned Tennessee, North Carolina, and Virginia. Despite lacking a medical license, Kestner wielded significant influence over nurse practitioners and physician assistants, pressuring them to administer multiple back injections to patients seeking opioid treatment.
Testimonies highlighted a coercive environment where patients who refused these invasive procedures risked being turned away from Pain MD, facing withdrawal symptoms from their opioid medications.
The injections in question were predominantly billed as Tendon Origin Insertion injections (TOIs). However, evidence demonstrated that very few patients suffered from actual tendon pain, and many of the procedures were medically questionable given the clinic's available equipment. Kestner’s relentless pursuit of profits led him to regularly berate practitioners through emails, comparing their "production" and instilling a culture of fear that suggested job loss for those who fell short of his injection quotas.
Notably, Kestner ignored multiple warnings from insurance companies regarding his clinics’ improper billing practices, including a formal lawsuit. His actions propelled Pain MD to become the nation’s leading biller for TOI procedures under Medicare, surpassing the next highest biller by an alarming margin.
The jury ultimately found Kestner guilty of one count of conspiracy to commit health care fraud and 12 counts of health care fraud. He is scheduled for sentencing on February 27, 2025, where he could face up to 10 years in prison for each count. A federal district court judge will determine the final sentence, considering the U.S. Sentencing Guidelines and additional relevant factors.
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