Former owners of local addiction clinics convicted of health care fraud

Published 8:00 am Tuesday, April 11, 2017

FRANKFORT — Five former owners of PremierTox, a clinical laboratory in Russell Springs, also with former connections to SelfRefind in Danville, were convicted of 17 counts each of health care fraud.

Doctors Brian Wood and Robin Peavler, former owners of SelfRefind, a chain of addiction treatment clinics based in Danville, were convicted along with their fellow PremierTox owners Brian Walters, James Wesley Bottom and Dr. Robert Bertram Jr., according to a release from the U.S. Attorney’s Office in the Eastern District of Kentucky.

The release explained patients from SelfRefind underwent urine drug testing. Beginning in Oct. 2010, the samples were frozen and sent to a PremierTox storage facility, under the direction of Wood and Peavler. They were maintained in the facility, “actually referred to as the ‘Pee Palace.’ As many as 10,000 frozen urine samples were stored in this facility.”

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The testing equipment was not installed until Jan. 2011, the release states, and testing did not begin until April 2011.

“The evidence established that the significant delay in testing rendered many of the confirmation urine tests useless in the treatment of the SelfRefind patients, and medically unnecessary.”

The release states once testing began, they were prioritized based on the eligibility for reimbursement from insurance companies — Medicaid and Medicare patients’ samples were tested first, while Anthem patients’ samples weren’t tested until Aug. 2011, when the company became enrolled as a health care provider with Anthem.

“Some of the Anthem patient samples were actually tested nine to eleven months after they had been collected, and long after they had any value in treating the patient.”

Those are the charges the five faced.

The jury reached a decision on March 31. According to records obtained online from the U.S. District Court, Eastern District of Kentucky, the attorney for Wood filed for a mistrial based on statements made by the prosecution during closing statements. The request was denied on April 7.

According to archives of The Advocate-Messenger from Feb. 11, 2014, Wood and Peavler settled in a case regarding allegations they violated the False Claims Act by submitting claims to Medicare and Kentucky’s Medicaid program for urine tests that were deemed medically unnecessary. The two agreed to pay $15.75 million plus interest.

Sentencing of the five defendants is scheduled for Aug. 9, 2017. 

Follow Kendra Peek on Twitter, @knpeek.