Center City Doctor Admits To Illegal Opioid Distribution

Philadelphia PA

29 September, 2021

8:27 AM

Description

PHILADELPHIA — A doctor who practiced in Center City Philadelphia admitted to illegally distributing controlled substances and filing false tax returns to a federal judge. Stephen Padnes, M.D., 79, of Glenside, a physician formerly licensed in Pennsylvania, pleaded guilty to criminal charges of illegally distributing controlled substances and filing false tax returns. Padnes has agreed to pay $2 million to settle a civil lawsuit brought by the United States seeking penalties and damages against him. The settlement resolves allegations that Padnes prescribed opioids without a legitimate medical purpose in violation of the Controlled Substances Act and False Claims Act. The resolution of the suit also excludes Padnes from participating in the Medicare program for at least 10 years. Padnes has also entered into a settlement agreement with the United States in which he has agreed to the civil forfeiture of over $1.8 million in cash seized from his home as proceeds of unlawful prescribing. The Drug Enforcement Agency has also rescinded Padnes's licenses to prescribe controlled substances. Padnes pleaded guilty to the criminal indictment, which charged him with illegally prescribing Schedule II controlled substances, oxycodone and methadone, on seven occasions between December 21, 2015 and June 29, 2016, without any medical necessity and outside the usual course of medical practice. It also charged that Padnes underreported the income earned by his medical practice, the Psychosomatic Medicine and Pain Rehabilitation Center, Inc., to the Internal Revenue Service by more than $700,000 for calendar years 2012, 2013, and 2014. He faces a maximum possible sentence of 149 years' imprisonment and has agreed to pay $301,219 in restitution to the IRS. In the lawsuit, Padnes has agreed to pay an additional $2 million to settle the government's allegations against him, brought pursuant to the Controlled Substances Act and the False Claims Act. He has also agreed to be excluded from participating as a provider in the Medicare program for at least 10 years. The suit alleges that Padnes violated the Controlled Substances Act by issuing prescriptions on hundreds of occasions for Schedule II opioids in 2014, 2015, and 2016 without a legitimate medical purpose. The government alleges numerous instances where Padnes accepted cash payments, hundreds of dollars each, in exchange for prescriptions for high doses of opioids without maintaining medical records in the normal course of medical practice, physical exams, reevaluations, and/or monitoring of the effectiveness of the opioids he prescribed. The government alleges numerous examples where Padnes regularly prescribed the equivalent of over 1,000 milligrams of morphine per day to certain purported patients in exchange for cash. In one example, Padnes is alleged to have issued prescriptions for so many opioids to a patient that the patient would have needed to consume nearly 70 pills, the equivalent of 4,000 milligrams of morphine, every day. It's also alleged that Padnes violated the False Claims Act because Medicare and Medicaid paid to fill thousands of prescriptions that Padnes issued without a legitimate medical purpose, causing a loss to these programs exceeding $1 million. On August 12, 2019, authorities filed a civil forfeiture complaint seeking the forfeiture of $1,864,545 cash seized from the defendant's home during the execution of a search warrant in 2016. The government alleges that cash was the proceeds from Padnes's unlawful medical practice from at least 2010 to 2016. During that time, the vast majority of the defendant's "patients" paid up to about $500 in cash for prescriptions for controlled substances, including Schedule II opioids such as oxycodone and methadone, that he wrote outside the usual course of medical practice and without a legitimate medical purpose, according to the government. The cash was discovered in suitcases and a dresser located in a bedroom in Padnes's home.