Center City doctor agrees to pay $2 million for illegally prescribing opioids

A doctor who practiced in Philadelphia pleaded guilty to criminal charges of illegally distributing opioids and filing false tax returns Tuesday, according to the U.S. Department of Justice.

Dr. Stephen Padnes, 79, of Glenside, Montgomery County, also agreed to pay $2 million to settle a civil lawsuit alleging he prescribed oxycodone and methadone without a legitimate medical purpose, a violation of the Controlled Substances Act and False Claims Act. 

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Padnes, who practiced in Center City, also agreed to a civil forfeiture of more than $1.8 million in cash seized from his house. That cash, found in suitcases and a dresser at his home, was the proceeds of the illegal prescriptions he doled out from at least 2010 to 2016, prosecutors allege. 

Padnes' alleged actions came as the opioid epidemic continued to escalate in Philadelphia and across the United States. In 2010, there were 297 overdose deaths at least partially attributed to opioids, according to city statistics. By 2016, that number had jumped to 752. And it's only escalated. 

Philadelphia reported 1,214 overdose deaths in 2020 — the second highest in city history, according to the Department of Public Health. More than 85% of them involved opioids. 

"Our community continues to cope with the tragic and deadly consequences of the opioid epidemic," said acting U.S. Attorney Jennifer Arbittier Williams. "A small number of corrupt doctors put greed before their oath, abused their positions of trust, and fanned the flames of the epidemic by pumping untold millions of illicit opioid pills onto our streets without a legitimate medical purpose simply to enrich themselves."

Padnes pleaded guilty to a criminal indictment charging him with illegally prescribing opioids seven times between Dec. 21 2015 and June 29, 2016. It also accused him of underreporting the income from his medical practice by more than $700,000 in 2012, 2013 and 2014.

He faces a maximum prison sentence of 149 years and has agreed to pay $301,219 in restitution to the Internal Revenue Service.

The lawsuit alleged Padnes accepted cash payments of hundreds of dollars in exchange for prescriptions for high doses of opioids on numerous occasions.

In one case, he allegedly prescribed the equivalent of daily morphine dose of 4,000 milligrams, or 70 pills. The CDC says morphine prescriptions should not exceed 90 milligrams per day.

The suit also alleged Padnes violated the False Claims Act by causing the Medicare and Medicaid programs to pay more than $1 million to fill thousands of prescriptions he issued without a legitimate medical purpose.

His settlement restricts Padnes from participating as a provider in the Medicare program for at least 10 years. It also rescinds his license to prescribe controlled substances.

Authorities filed a civil forfeiture complaint in August 2019, seeking more than $1.8 million in cash seized from Padnes' house during a search warrant enacted in 2016. The government alleged the cash came from illegal prescriptions Padnes made from 2010 to 2016. The cash was found in suitcases and a dresser in his home.

Opioids are prescribed for pain relief, but they are highly addictive and account for the majority of drug-related deaths in the United States, according to the Centers for Disease Control and Prevention.

National opioid overdose deaths surged to a record 93,000 in 2020, up 30% from 2019's numbers. In Pennsylvania, more than 5,000 people died from opioid-related overdoses.

Earlier this year, Pennsylvania and New Jersey were among 15 states that reached a $4.5 billion settlement with Purdue Pharma, maker of oxycodone brand Oxycontin.