NASHVILLE, Tenn. — Federal prosecutors sought a maximum prison sentence of nearly 20 years for the CEO of Pain MD, a company found to have given hundreds of thousands of questionable injections to patients, many reliant on opioids. It would have been among the longest sentences for a health care executive convicted of fraud in recent years.

Instead, he got 18 months.

Michael Kestner, 73, who was convicted of 13 fraud felonies last year, faced at least a decade behind bars based on federal sentencing guidelines. He was granted the substantially lightened sentence due to his age and health Wednesday during a federal court hearing in Nashville.

U.S. District Judge Aleta Trauger described Kestner as a “ruthless businessman” who funded a “lavish lifestyle” by turning medical professionals into “puppets” who pressured patients into injections that did not help their pain and sometimes made it worse.

“In the court’s eyes, he knew it was wrong, and he didn’t really care if it was doing anyone any good,” Trauger said.

But Trauger also said she was swayed by defense arguments that Kestner would struggle in federal prison due to his age and medical conditions, including the blood disorder hemochromatosis. Trauger said she had concerns about prison health care after considering about 200 requests for compassionate release in other court cases.

“The medical care at these facilities,” defense attorney Peter Strianse said, “has always been dodgy and suspect.”

Kestner did not speak at the court hearing, other than to detail his medical conditions. He did not respond to questions as he left the courthouse.

Pain MD ran as many as 20 clinics in Tennessee, Virginia, and North Carolina throughout much of the 2010s. While many doctors were scaling back their use of prescription painkillers due to the opioid crisis, Pain MD paired opioids with monthly injections into patients’ backs, claiming the shots could ease pain and potentially lessen reliance on pills, according to federal court documents.

During Kestner’s October trial, the Department of Justice proved that the injections were part of a decade-long scheme that defrauded Medicare and other insurance programs of millions of dollars by capitalizing on patients’ dependence on opioids.

The DOJ successfully argued at trial that Pain MD’s “unnecessary and expensive injections” were largely ineffective because they targeted the wrong body part, contained short-lived numbing medications but no steroids, and appeared to be based on test shots given to cadavers — people who felt neither pain nor relief because they were dead. During closing arguments, the DOJ argued Pain MD had turned some patients into “human pin cushions.”

“They were leaned over a table and repeatedly injected in their spine,” federal prosecutor Katherine Payerle said during the May 14 sentencing hearing. “Over and over, month after month, at the direction of Mr. Kestner.”

At last year’s trial, witnesses testified that Kestner was the driving force behind the injections, which amounted to roughly 700,000 shots over about eight years, with some patients receiving up to 24 at once.

Four former patients testified that they tolerated the shots out of fear that Pain MD otherwise would have cut off their painkiller prescriptions, without which they might have spiraled into withdrawal.

One of those patients, Michelle Shaw, told KFF Health News that the injections sometimes left her in so much pain she had to use a wheelchair. She was outraged by Kestner’s sentence.

“I’m disgusted that all they got was a slap on the wrist as far as I’m concerned,” Shaw said May 14. “I hope karma comes back to him. That he suffers to his last breath.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

Five years ago, the CEO of one of the largest pain clinic companies in the Southeast was sentenced to more than three years in prison after being convicted in a $4 million illegal kickback scheme.

But after just four months behind bars, John Estin Davis walked free. President Donald Trump commuted Davis’ sentence in the last days of his first term. In a statement explaining the decision, the White House said that “no one suffered financially” from Davis’ crime.

In court, however, the Trump administration was saying something very different. As the president let him go, the Department of Justice alleged in a civil lawsuit that Davis and his company defrauded taxpayers out of tens of millions of dollars with excessive urine drug testing. The DOJ alleged that Comprehensive Pain Specialists made such a “staggering” sum from cups of pee that employees had given the testing a profit-minded nickname: “liquid gold.”

Davis and the company denied all allegations in court filings and settled the DOJ’s fraud lawsuit without any determination of liability. Davis declined to comment for this article.

Since returning to the White House, Trump has said he will target fraud in Medicare, Medicaid, and Social Security, and his Republican allies in Congress have made combating fraud a key argument in their plans to slash spending on Medicaid, which provides health care for millions of low-income and disabled Americans. During an address to Congress last month, Trump said his administration had found “hundreds of billions of dollars of fraud” without citing any specific examples of fraud.

“Taken back a lot of that money,” Trump said. “We got it just in time.”

But Trump’s history of showing leniency to convicted fraudsters contrasts with his present-day crackdown. In his first and second terms, Trump has granted pardons or commutations to at least 68 people convicted of fraud crimes or of interfering with fraud investigations, according to a KFF Health News review of court and clemency records, DOJ press releases, and news reports. At least 13 of those fraudsters were convicted in cases involving more than $1.6 billion of fraudulent claims filed with Medicare and Medicaid, according to the Department of Justice.

And as one of the first actions of his second term, Trump fired 17 independent inspectors general responsible for rooting out fraud and waste in government.

“It sends a really bad message and really hurts DOJ efforts at creating deterrence,” said Jacob Elberg, a former assistant U.S. attorney and law professor at Seton Hall University in New Jersey. “In order to reduce health care fraud, you need people both to be afraid of getting in trouble, but also for people to believe in the legitimacy of the system.”

Elberg said considerable fraud in Medicare and Medicaid exists largely because the programs’ “pay-and-chase models” prioritize paying for patient care first and tracking down stolen dollars second. To prevent more fraud, the programs would likely need to be redesigned in ways that would be slower and more cumbersome for all patients, Elberg said.

Regardless, Elberg said the president’s claimed focus on fraud appears to be a pretext for slashing spending that has been legally appropriated by Congress. Trump has empowered the Elon Musk-led Department of Government Efficiency, which he established and named by executive order, to make deep cuts in federal budgets, halting some medical research and aid programs in addition to cutting spending on climate change, transgender health, and diversity, equity, and inclusion programs.

“What’s been the focal point to date of the administration is not what anybody has ever referred to as health care fraud,” Elberg said. “There is a real blurring — a seemingly intentional blurring — between what is actually fraud and what is just spending that they are not in favor of.”

Jerry Martin, who served as a U.S. attorney for the Middle District of Tennessee under President Barack Obama and now represents health care fraud whistleblowers, also said Trump’s focus on fraud appeared to be “just a platform to attack things that they don’t agree with” rather than “a genuine desire to root out and combat fraud.”

Even so, Martin said some of his whistleblower clients have been emboldened.

“I’ve had clients repeat back to me ‘President Trump says fraud is a priority,’” Martin said. “People are listening to it. But I don’t know that what he’s saying translates into what they believe.”

The White House did not respond to requests for comment for this article.

A Billion-Dollar Fraud Case and Needless Eye Injections

Presidents enjoy the unique authority to erase federal convictions and prison sentences with pardons and commutations. In theory, the power is intended to be a final bulwark against injustice or overly harsh punishment. But many presidents have been accused of using the pardon power to reward powerful allies and close associates as they leave the White House.

Trump issued about 190 pardons and commutations in the final two months of his first term, including for some health care fraudsters convicted of schemes with astonishing costs.

For example, Trump granted a commutation to Philip Esformes, a Florida health care executive convicted in 2019 of a $1.3 billion Medicare and Medicaid fraud scheme. After he was sentenced, DOJ announced in a press release that “the man behind one of the biggest health care frauds in history will be spending 20 years in prison.” Trump freed him 14 months later.

Trump also granted a commutation to Salomon Melgen, a Florida eye doctor who was serving a 17-year prison sentence for defrauding Medicare of $42 million. Melgen falsely diagnosed patients with eye diseases, then gave them unnecessary care, including laser treatments and painful eye injections, according to DOJ and court documents.

“Salomon Melgen callously took advantage of patients who came to him fearing blindness,” said a DOJ news release after Melgen was sentenced in 2018. “They received medically unreasonable and unnecessary tests and procedures that victimized his patients and the American taxpayer.”

DOJ: $70 Million Spent on ‘Excessive’ Urine Testing

Despite the flurry of pardons and commutations at the end of Trump’s first term, the leniency he showed Davis was unique. Davis was the only convicted health care fraudster to receive clemency while the Trump administration was simultaneously accusing him of more fraud.

As CEO of Comprehensive Pain Specialists from 2011 to 2017, Davis oversaw a rapid expansion to more than 60 locations across 12 states, according to federal court documents.

He was indicted in 2018 for using his CEO position to refer Medicare patients in need of medical equipment to a conspirator in return for kickbacks paid through a shell company, according to court documents. He was convicted at trial in April 2019 of defrauding Medicare.

Three months later, the DOJ filed a fraud lawsuit against Davis and CPS that piggybacked on the claims of seven whistleblowers. The lawsuit alleged that CPS collected more than $70 million from federal insurance programs for urine drug testing, most of which was “excessive,” and that an audit of a sampling of the tests had found at least 93% “lacked medical necessity.”

Typically, government insurance programs pay for urine testing so pain clinics can verify that patients are taking their prescriptions properly and not abusing any other drugs, which could contribute to an overdose. Patients could be tested as little as once a year or as often as monthly depending on their level of risk, according to the DOJ lawsuit.

But Comprehensive Pain Specialists performed “myriad urine drug testing on virtually every CPS patient on virtually every visit” then conducted “at least 16 different types of tests” on each sample, and sometimes as many as 51, according to the lawsuit.

Trump commuted Davis’ sentence for his criminal conviction in January 2021 as the DOJ was finalizing a settlement in the civil lawsuit. The commutation was supported by country music star Luke Bryan, according to a White House statement.

Months later, with President Joe Biden in office, CPS and its owners agreed to repay $4.1 million — less than 10% of the damages sought in the suit — and the case was closed.

In the settlement, Davis agreed not to take any job where he would ever again bill Medicare or other federal health care programs. He was not required to personally repay anything.

Martin, who represented one of the whistleblowers who first raised allegations against Davis and CPS, said the leniency that Trump showed to him and other health care fraudsters may discourage DOJ employees from pursuing similar investigations during his second term.

“There are a lot of rank-and-file people who are operating at the lowest point in their professional careers, where they’ve seen a lot of their work essentially be water under the bridge,” Martin said. “That’s got to be really demoralizing.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF—an independent source of health policy research, polling, and journalism. Learn more about KFF.

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This article first appeared on KFF Health News and is republished here under a Creative Commons license.

McMINNVILLE, Tenn. — Each month, Michelle Shaw went to a pain clinic to get the shots that made her back feel worse — so she could get the pills that made her back feel better.

Shaw, 56, who has been dependent on opioid painkillers since she injured her back in a fall a decade ago, said in both an interview with KFF Health News and in sworn courtroom testimony that the Tennessee clinic would write the prescriptions only if she first agreed to receive three or four “very painful” injections of another medicine along her spine.

The clinic claimed the injections were steroids that would relieve her pain, Shaw said, but with each shot her agony would grow. Shaw said she eventually tried to decline the shots, then the clinic issued an ultimatum: Take the injections or get her painkillers somewhere else.

“I had nowhere else to go at the time,” Shaw testified, according to a federal court transcript. “I was stuck.”

Shaw was among thousands of patients of Pain MD, a multistate pain management company that was once among the nation’s most prolific users of what it referred to as “tendon origin injections,” which normally inject a single dose of steroids to relieve stiff or painful joints. As many doctors were scaling back their use of prescription painkillers due to the opioid crisis, Pain MD paired opioids with monthly injections into patients’ backs, claiming the shots could ease pain and potentially lessen reliance on painkillers, according to federal court documents.

Now, years later, Pain MD’s injections have been proved in court to be part of a decade-long fraud scheme that made millions by capitalizing on patients’ dependence on opioids. The Department of Justice has successfully argued at trial that Pain MD’s “unnecessary and expensive injections” were largely ineffective because they targeted the wrong body part, contained short-lived numbing medications but no steroids, and appeared to be based on test shots given to cadavers — people who felt neither pain nor relief because they were dead.

Four Pain MD employees have pleaded guilty or been convicted of health care fraud, including company president Michael Kestner, who was found guilty of 13 felonies at an October trial in Nashville, Tennessee. According to a transcript from Kestner’s trial that became public in December, witnesses testified that the company documented giving patients about 700,000 total injections over about eight years and said some patients got as many as 24 shots at once.

“The defendant, Michael Kestner, found out about an injection that could be billed a lot and paid well,” said federal prosecutor James V. Hayes as the trial began, according to the transcript. “And they turned some patients into human pin cushions.”

The Department of Justice declined to comment for this article. Kestner’s attorneys either declined to comment or did not respond to requests for an interview. At trial, Kestner’s attorneys argued that he was a well-intentioned businessman who wanted to run pain clinics that offered more than just pills. He is scheduled to be sentenced on April 21 in a federal court in Nashville.

According to the transcript of Kestner’s trial, Shaw and three other former patients testified that Pain MD’s injections did not ease their pain and sometimes made it worse. The patients said they tolerated the shots only so Pain MD wouldn’t cut off their prescriptions, without which they might have spiraled into withdrawal.

“They told me that if I didn’t take the shots — because I said they didn’t help — I would not get my medication,” testified Patricia McNeil, a former patient in Tennessee, according to the trial transcript. “I took the shots to get my medication.”

In her interview with KFF Health News, Shaw said that often she would arrive at the Pain MD clinic walking with a cane but would leave in a wheelchair because the injections left her in too much pain to walk.

“That was the pain clinic that was supposed to be helping me,” Shaw said in her interview. “I would come home crying. It just felt like they were using me.”

‘Not Actually Injections Into Tendons at All’

Pain MD, which sometimes operated under the name Mid-South Pain Management, ran as many as 20 clinics in Tennessee, Virginia, and North Carolina throughout much of the 2010s. Some clinics averaged more than 12 injections per patient each month, and at least two patients each received more than 500 shots in total, according to federal court documents.

All those injections added up. According to Medicare data filed in federal court, Pain MD and Mid-South Pain Management billed Medicare for more than 290,000 “tendon origin injections” from January 2010 to May 2018, which is about seven times that of any other Medicare biller in the U.S. over the same period.

Tens of thousands of additional injections were billed to Medicaid and Tricare during those same years, according to federal court documents. Pain MD billed these government programs for about $111 per injection and collected more than $5 million from the government for the shots, according to the court documents.

More injections were billed to private insurance too. Christy Wallace, an audit manager for BlueCross BlueShield of Tennessee, testified that Pain MD billed the insurance company about $40 million for more than 380,000 injections from January 2010 to March 2013. BlueCross paid out about $7 million before it cut off Pain MD, Wallace said.

These kinds of enormous billing allegations are not uncommon in health care fraud cases, in which fraudsters sometimes find a legitimate treatment that insurance will pay for and then overuse it to the point of absurdity, said Don Cochran, a former U.S. attorney for the Middle District of Tennessee.

Tennessee alone has seen fraud allegations for unnecessary billing of urine testing, skin creams, and other injections in just the past decade. Federal authorities have also investigated an alleged fraud scheme involving a Tennessee company and hundreds of thousands of catheters billed to Medicare, according to The Washington Post, citing anonymous sources.

Cochran said the Pain MD case felt especially “nefarious” because it used opioids to make patients play along.

“A scheme where you get Medicare or Medicaid money to provide a medically unnecessary treatment is always going to be out there,” Cochran said. “The opioid piece just gives you a universe of compliant people who are not going to question what you are doing.”

“It was only opioids that made those folks come back,” he said.

The allegations against Pain MD became public in 2018 when Cochran and the Department of Justice filed a civil lawsuit against the company, Kestner, and several associated clinics, alleging that Pain MD defrauded taxpayers and government insurance programs by billing for “tendon origin injections” that were “not actually injections into tendons at all.”

Kestner, Pain MD, and several associated clinics have each denied all allegations in that lawsuit, which is ongoing.Scott Kreiner, an expert on spine care and pain medicine who testified at Kestner’s criminal trial, said that true tendon origin injections (or TOIs) typically are used to treat inflamed joints, like the condition known as “tennis elbow,” by injecting steroids or platelet-rich plasma into a tendon. Kreiner said most patients need only one shot at a time, according to the transcript.

But Pain MD made repeated injections into patients’ backs that contained only lidocaine or Marcaine, which are anesthetic medications that cause numbness for mere hours, Kreiner testified. Pain MD also used needles that were often too short to reach back tendons, Kreiner said, and there was no imaging technology used to aim the needle anyway. Kreiner said he didn’t find any injections in Pain MD’s records that appeared medically necessary, and even if they had been, no one could need so many.

“I simply cannot fathom a scenario where the sheer quantity of TOIs that I observed in the patient records would ever be medically necessary,” Kreiner said, according to the trial transcript. “This is not even a close call.”

Jonathan White, a physician assistant who administered injections at Pain MD and trained other employees to do so, then later testified against Kestner as part of a plea deal, said at trial that he believed Pain MD’s injection technique was based on a “cadaveric investigation.”

According to the trial transcript, White said that while working at Pain MD he realized he could find no medical research that supported performing tendon origin injections on patients’ backs instead of their joints. When he asked if Pain MD had any such research, White said, an employee responded with a two-paragraph letter from a Tennessee anatomy professor — not a medical doctor — that said it was possible to reach the region of back tendons in a cadaver by injecting “within two fingerbreadths” of the spine. This process was “exactly the procedure” that was taught at Pain MD, White said.

During his own testimony, Kreiner said it was “potentially dangerous” to inject a patient as described in the letter, which should not have been used to justify medical care.

“This was done on a dead person,” Kreiner said, according to the trial transcript. “So the letter says nothing about how effective the treatment is.”

Over-Injecting ‘Killed My Hand’

Pain MD collapsed into bankruptcy in 2019, leaving some patients unable to get new prescriptions because their medical records were stuck in locked storage units, according to federal court records.

At the time, Pain MD defended the injections and its practice of discharging patients who declined the shots. When a former patient publicly accused the company of treating his back “like a dartboard,” Pain MD filed a defamation lawsuit, then dropped the suit about a month later.

“These are interventional clinics, so that’s what they offer,” Jay Bowen, a then-attorney for Pain MD, told The Tennessean newspaper in 2019. “If you don’t want to consider acupuncture, don’t go to an acupuncture clinic. If you don’t want to buy shoes, don’t go to a shoe store.”

Kestner’s trial told another story. According to the trial transcript, eight former Pain MD medical providers testified that the driving force behind Pain MD’s injections was Kestner himself, who is not a medical professional and yet regularly pressured employees to give more shots.

One nurse practitioner testified that she received emails “every single workday” pushing for more injections. Others said Kestner openly ranked employees by their injection rates, and implied that those who ranked low might be fired.

“He told me that if I had to feed my family based on my productivity, that they would starve,” testified Amanda Fryer, a nurse practitioner who was not charged with any crime.

Brian Richey, a former Pain MD nurse practitioner who at times led the company’s injection rankings, and has since taken a plea deal that required him to testify in court, said at the trial that he “performed so many injections” that his hand became chronically inflamed and required surgery.

“‘Over injecting killed my hand,’” Richey said on the witness stand, reading a text message he sent to another Pain MD employee in 2017, according to the trial transcript. “‘I was in so much pain Injecting people that didnt want it but took it to stay a patient.’”

“Why would they want to stay there?” a prosecutor asked.

“To keep getting their narcotics,” Richey responded, according to the trial transcript.

Throughout the trial, defense attorney Peter Strianse argued that Pain MD’s focus on injections was a result of Kestner’s “obsession” with ensuring that the company “would never be called a pill mill.”

Strianse said that Kestner “stayed up at night worrying” about patients coming to clinics only to get opioid prescriptions, so he pushed his employees to administer injections, too.

“Employers motivating employees is not a crime,” Strianse said at closing arguments, according to the court transcript. “We get pushed every day to perform. It’s not fraud; it’s a fact of life.”

Prosecutors insisted that this defense rang hollow. During the trial, former employees had testified that most patients’ opioid dosages remained steady or increased while at Pain MD, and that the clinics did not taper off the painkillers no matter how many injections were given.

“Giving them injections does not fix the pill mill problem,” federal prosecutor Katherine Payerle said during closing arguments, according to the trial transcript. “The way to fix being a pill mill is to stop giving the drugs or taper the drugs.”

This article first appeared on KFF Health News and is republished here under a Creative Commons license.

KINGSPORT, Tenn. — Jerry Qualls had a heart attack in 2022 and was rushed by ambulance to Holston Valley Medical Center, where he was hospitalized for a week and kept alive by a ventilator and blood pump, according to his medical records.

His wife, Katherine Qualls, said his doctors offered little hope. In an interview and a written complaint to the Tennessee government, she said doctors at Holston Valley told her that her husband would not qualify for a heart transplant and shouldn’t be expected to recover.

Defiant, she insisted he be transferred hours away to a hospital in Nashville. Within days of leaving Holston Valley, Jerry Qualls was awake and sitting upright, his wife said, and he ultimately received a lifesaving heart transplant.

“How many families don’t know how to get a transfer and their loved one dies?” Katherine Qualls wrote in her complaint to the state. “My husband would have been dead within a few days if I didn’t get him out when I did.”

Holston Valley Medical Center is a flagship of Ballad Health, a 20-hospital system in northeastern Tennessee and southwestern Virginia that is the only option for hospital care in a large swath of Appalachia. Ballad formed six years ago when lawmakers in both states, in an effort to prevent hospital closures, waived federal antitrust laws so two rival health systems could merge. The merger created the largest state-sanctioned hospital monopoly in the nation.

Since then, Ballad has largely kept those hospitals open. But the monopoly has also fallen short of about three-fourths of the quality-of-care goals set by the states over the last three fiscal years, including failing to meet state benchmarks on infections, mortality, emergency room speed, and patient satisfaction, according to annual reports from the Tennessee Department of Health and Ballad itself.

Some local residents have become wary, afraid, or unwilling to seek care at Ballad hospitals and must drive over an hour to reach other options, according to written complaints to the Tennessee government and state lawmakers, public hearing testimony, and KFF Health News interviews conducted over the past year with patients, family members, local leaders, and some officials who once publicly supported the monopoly, including a former government consultant and one state lawmaker. Many of those who submitted complaints or were interviewed allege that paper-thin staffing at Ballad hospitals and ERs is the root cause of the monopoly’s quality-of-care woes.

In a two-hour interview vigorously defending the company, Ballad Health CEO Alan Levine said the hospitals are rapidly recovering from a quality-of-care slump caused by covid-19 and a subsequent rise in nursing turnover and staff shortages. These issues affected hospitals nationwide, Levine said, and were not related to the Ballad merger or the monopoly it created.

Levine declined to discuss specific complaints from patients. But he said that each of the complaints referenced in this article took issue with medical decisions made by doctors in Ballad hospitals — not “any policy or practice at Ballad.”

“I can understand if the patients, if the wife, was upset about the medical decisions they made if it turned out to be wrong,” Levine said. “But that has nothing to do with the merger, OK? That’s a completely different issue, and it happens in hospitals all over the country.”

In the interview with KFF Health News and in the days that followed, Levine flexed considerable connections to officials in the Tennessee government. As Levine spoke in a boardroom at Ballad’s hilltop headquarters, he was flanked by three local mayors who voiced support for the hospitals and said complaints came from a vocal minority of their constituents. Days later, Levine got two Tennessee state agency directors and a former state health commissioner to provide emails or text messages supporting statements he made during the interview.

Logan Grant, executive director of the Tennessee Health Facilities Commission, which processes complaints against hospitals for the state, said in a statement prompted by Levine that Ballad hospitals are “not an outlier in terms of substantiated survey findings.”

Joe Grandy, the mayor of Tennessee’s Washington County, where Ballad is headquartered, said most residents consider the quality of care in the area “about as good as it gets.”

Brenda Getaz certainly doesn’t.

Getaz, 76, who spent three decades as a hospital official specializing in quality standards before retiring to Washington County, said she plans to move to Atlanta if state governments do not take action to fix Ballad in the coming year. Getaz said local medical professionals she trusts have urged her to move away so she does not have to rely on Ballad for care.

“I’m frightened to be taken to a Ballad facility,” she said.

Glimpses of Government Concern

The Tennessee Department of Health, which has the most direct oversight over Ballad Health, over the past year has declined multiple interview requests to discuss the hospital monopoly. Department emails reviewed by KFF Health News, some of which were obtained through public record requests, offer glimpses of concern inside the agency.

Emails show the health department has attempted to hold Ballad more accountable for its quality of care in closed-door negotiations and is investigating Holston Valley’s treatment of a recent heart patient after receiving detailed complaints from his family. In a 2023 email, Tennessee Health Commissioner Ralph Alvarado reacted to a news story about low job satisfaction among Ballad nurses by writing: “Ouch. … What are they doing to address this?”

In another email from the same year, Alvarado praised an informal report submitted at a public hearing that concluded Ballad’s monopoly had caused more harm than good. The report was written by Wally Hankwitz, a retired health care executive who once led a physician management company in Kingsport. The report levied pages of criticism against Ballad’s “sub-par” performance and called for the monopoly to end.

“THIS communication from the COPA hearing is particularly good,” the health commissioner wrote to some of his staff. “Totally based on data. I would almost like to hear Ballad’s response to this.”

When asked to respond to the Hankwitz report, Levine said it was “full of errors” and that “no credible institution would pay attention to it.”

Despite concerns, Tennessee and Virginia have each year determined that the benefits of the Ballad monopoly outweigh any negative impacts, issuing stamps of approval that allow the monopoly to continue. This has occurred, at least in part, because both states grade Ballad against scoring rubrics that do not prioritize quality of care.

Larry Fitzgerald, a retired Tennessee consultant who monitored the monopoly for the state for more than five years and always gave Ballad high marks, said in an interview that his hands were tied by the state’s lenient grading system, which allowed Ballad to succeed on paper even when it failed to meet the state’s quality-of-care goals.

Fitzgerald said he is unconvinced that the state-sanctioned monopoly had prevented any hospital closures and said the merger had “probably not” benefited local residents overall.

When asked where he would get medical attention if he lived in northeastern Tennessee or southwestern Virginia, Fitzgerald immediately responded, “I’m not going to a Ballad hospital.”

In his interview, Levine alleged Fitzgerald had “basically defrauded the state” by not raising these criticisms of Ballad in his public reports on the monopoly and said it was “irresponsible” and “obscene” to express his concerns about quality of care after retiring.

‘Horror Stories’ From Ballad Patients

Tennessee House member Bud Hulsey, a Republican from Kingsport, wrote in a 2023 letter to the state health department that he “was an avid supporter of the merger” that created Ballad but since then had become “concerned” and “saddened” by the state of the local hospitals.

In a recent interview, Hulsey said that while his family has received excellent care from Ballad, his constituents have told him “horror stories” for years.

“I had people call me from the waiting room after they’ve sat there for 12 or 14 hours,” Hulsey said. “The scales have far more complaints on them than accolades.”

Others have soured on the monopoly, too. Joe Macione, who for years was on the board of Wellmont Health System, one of the rival companies that became Ballad, once publicly advocated for the merger.

In an interview, Macione said state leaders should have admitted years ago that the monopoly was a mistake.

“It has not worked,” said Macione, 87. “All my family knows that, if I have the time, I want to go to a highly graded hospital, either in Asheville or Knoxville.”

Ballad Health was created in 2018 after Tennessee and Virginia officials waived federal anti-monopoly laws and approved the nation’s biggest hospital merger, based on what’s called a Certificate of Public Advantage, or COPA, agreement. Ballad is now the only option for hospital care for most of the approximately 1.1 million people in a 29-county region at the nexus of Tennessee, Virginia, Kentucky, and North Carolina.

In the years since, there have been multiple signs of discontent with and within Ballad hospitals. In 2019, protesters gathered daily for eight months outside Holston Valley to oppose the closure of the neonatal intensive care unit and the downgrading of a trauma center. (Ballad has said the NICU closure was necessary and benefited patients, and a study published this year said the trauma changes saved lives.)

In 2020, Bristol Regional Medical Center CEO Greg Neal resigned after it was discovered he made the initial incision in a heart surgery despite not being a doctor, according to Tennessee state records. (Levine said in his interview that the resignation shows Ballad is holding employees accountable.)

In 2022, 14 cardiologists signed a letter warning of “severe limitations” in the Bristol Regional cardiac catheterization lab that were affecting patient safety and delaying procedures for weeks or months. (Ballad said in a letter to the Tennessee government that it worked with the cardiologists, who it said were partly to blame, to make the lab more efficient.)

In 2023, Ballad Health was ranked last among 200 large health care organizations in an analysis of nurse satisfaction published by an MIT business magazine. (Levine dismissed this analysis as unscientific.) This year, the Federal Trade Commission cited Ballad as a cautionary tale while opposing a similar hospital merger under consideration in Indiana, and a longtime Kingsport doctor took a parting shot at Ballad in his obituary. (Ballad declined to comment on either topic.)

And in August, the widow of a Tennessee sheriff filed a lawsuit alleging that Ballad caused her husband’s death and intentionally understaffed hospitals “to save money.” Brenda Tester, the wife of Johnson County Sheriff Eddie Tester, alleged in that lawsuit that Ballad put her husband on blood thinners and then gave him an unnecessary liver biopsy, causing “life ending internal blood loss” that led to “his cardiac arrest and ultimately his sudden death.”

Ballad has yet to respond to the Tester lawsuit in court. Levine said in his interview that the doctors who treated the sheriff were not employed by Ballad but merely contracted to work in its hospitals.

Some of Ballad’s most determined critics are family members of Anton Maki Jr., a former Holston Valley doctor who returned to the hospital as a patient in February. The family has filed complaints with multiple Tennessee agencies and the federal government and provided emails to KFF Health News showing that Tennessee is investigating Maki’s case.

In an interview and in those complaints, Maki’s family members allege Holston Valley gave Maki improper treatment, even though his symptoms and lab tests made it obvious that he was having a serious heart attack that required urgent attention.

The improper care did “permanent damage” to Maki’s heart, the family’s complaints allege. That damage required him to have a permanent mechanical heart pump surgically implanted at a non-Ballad hospital, said one of his daughters, Alexandra Maki, who is a surgeon in Kentucky. She said her father died after a fall three months later while still in a weakened state.

Alexandra Maki said that her father had been alarmed by the Ballad monopoly for years but that she didn’t fully appreciate his warnings until she witnessed his care at Holston Valley firsthand.

“I filed these complaints because it is my duty as a doctor to report what I saw,” Alexandra Maki said. “That was not care. It is a facade of a hospital. It is a well-oiled death machine.”

KFF Health News reporter Samantha Liss contributed to this article.

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This article first appeared on KFF Health News and is republished here under a Creative Commons license.