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Advanced Pain Management Holdings Inc. and its affiliates have agreed to pay $885,452 to settle claims that the organization and its affiliates violated the False Claims Act by paying kickbacks and performing medically unnecessary laboratory tests, the U.S. Department of Justice said Friday. The settlement resolves a case filed in federal court in 2013 stemming from allegations brought in a lawsuit by a whistleblower. It comes on the heels of the announcement that Advanced Pain Management and APM Wisconsin MSO, which provides administrative services for its ambulatory surgical centers, have filed for receivership, an alternative to bankruptcy under state law. According to the DOJ, APMH improperly gifted shares of incentive stock to non-employee physicians who performed pain management procedures at its ambulatory surgical centers. The incentive stock was to be redeemed upon a sale of APMH and was dependent on the profitability of APMH, which was determined largely by referrals from the non-employee physicians, the DOJ said. The incentive stock was allegedly given as a reward for referrals to its ambulatory service centers. APMH also allegedly paid non-employee physicians to serve as medical directors in a manner that was tied to the volume of procedures at its ambulatory surgery centers. There were no written agreements documenting the services the medical directors were to provide, and they were not required to record or report any medical director functions, according to the DOJ. Advanced Pain Management entities also allegedly performed confirmatory urine drug tests that were medically unnecessary, the DOJ said. For certain claims, providers allegedly failed to customize orders for confirmatory urine drug tests based on a patient’s individualized risk assessment and circumstances, which led to a higher level of testing. The APM entities disclosed these improper urine drug test claims to the Department of Health and Human Services, DOJ said. The claims settled by the agreement are allegations only, and there has been no determination of liability, DOJ said. “The financial arrangements pursued by APMH wrongly gave physicians an incentive to make medical decisions based on their own financial interests, rather than their patients’ interests,” said U.S. Attorney Matthew Krueger for the Eastern District of Wisconsin. “Medicare and Medicaid only pay for procedures and tests that are medically necessary and untainted by kickbacks. This settlement reflects our office’s continuing efforts to combat violations of the False Claims Act and improper arrangements under the Anti-Kickback Statute.” Advanced Pain Management Holdings Inc. and its wholly-owned subsidiaries, APM Wisconsin MSO, Advanced Pain Management LLC and Advanced Pain Management S.C. have agreed to pay the settlement. Representatives with Advanced Pain Management could not immediately be reached for comment.