Preying on the Vulnerable: Tennessee Clinic Owner Coerced Patients to Have Unnecessary Back Injections, Overbilled $35 Million
Michael Kestner, owner of two pain management clinics in Franklin, Tenn., has been convicted of a healthcare scheme in which he overbilled medical programs more than $35 million and caused unnecessary pain and suffering to his patients.
Federal investigators found that Kestner’s clinics billed Medicare, TennCare and Tricare around $35 million for the procedures between 2010 and 2018, according to a Justice Department statement.
The jury convicted Kestner of one count of conspiracy to commit healthcare fraud and 12 counts of healthcare fraud. He is scheduled to be sentenced on Feb. 27, 2025, and faces a maximum penalty of 10 years in prison for each count, according to the statement.
Injections That Were Medically Unnecessary, Painful
The activities centered on Tendon Origin Insertion injections, which were billed under the pretense of treating tendon-related injuries, according to court documents. In reality, these injections served no medical purpose for the patients, many of whom did not have the conditions these injections were designed to treat. Investigators confirmed that the injections were often painful, entirely unnecessary and sometimes medically impossible to administer, given the available clinic equipment.
Prosecutors presented evidence that Kestner pressured nurse practitioners to coax opioid-addicted patients to undergo the injections. If they refused, they would lose their medical treatment and face drug withdrawals on their own.
Kestner directed physicians, nurse practitioners and physician assistants to “increase production” by administering the injections regardless of medical necessity, as revealed by internal emails, according to prosecutors. The emails ranked staff members’ performance based on the volume of injections they administered, underscoring the primary focus on revenue generation rather than patient care.
Fraudulent Claims Submitted to State and Federal Health Care Programs
An official investigation of Kestner’s wrongdoings began in 2017 when the Tennessee Attorney General’s Office filed a lawsuit against his clinics, citing fraudulent claims submitted to TennCare. In 2019, Kestner was indicted on charges of attempting to defraud taxpayers through $38 million in false medical claims, and by 2021, he faced a superseding indictment that implicated him and several others in a conspiracy to defraud Medicare, TennCare and Tricare.
In 2018, Kestner filed a complaint against the heads of the U.S. Department of Health and Human Services and the Centers for Medicare and Medicare Services, accusing them of misusing their authority by temporarily suspending Medicare payments to his Franklin-based pain management clinic companies.
Kestner also argued that this means his clinics will go under since more than half of his income came from these sources. One of his companies, MedManagement, published a statement about their claimed ordeal.
“While we cannot elaborate on full details of the accusations due to pending litigation, we can say that we vehemently deny the allegations and will vigorously defend our reputation and business practices in court,” said MedManagement’s statement. “We know that many patients have benefited from the excellent care that they have received and that the compassion shown by the physicians providing that care is unparalleled.”
Ignored Repeat Notices and Lawsuits About Improper Billing
Kestner ignored repeated notices, including a lawsuit, from insurance companies who tried to alert him that his clinics were billing these injections improperly, say federal prosecutors.
Along with the financial damages caused by Kestner’s practices an even more troubling part comes from the fact that Kestner’s scheme caused great suffering for patients and abused public healthcare resources meant to assist those in genuine need.
Medicare was the most affected, with Kestener overbilling them by $27 million, while he billed TennCare $8.5 million and Tricare $2.5 million.
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