Providers across the country have been billing more frequently for neurostimulator implantation, a surgical procedure for patients with chronic pain. The problem is, they may not actually be doing it.
Within the last 2 years, the Department of Justice has prosecuted more than a dozen cases involving fraudulent billing of P-Stim, a type of auricular electroacupuncture device used to treat chronic and acute pain.
P-Stim devices -- which are vastly different from implantable neurostimulators -- are small, battery-operated instruments that providers attach behind a patient's ear. Small needles are inserted inside the ear, and the device transmits recurrent electric pulses to the patient for approximately 4 days until it's removed.
Auricular electroacupuncture devices have been on the U.S. market for years. But these devices have never been approved by the FDA, and hard evidence doesn't yet exist as to whether they're effective for patients with chronic pain.
Despite uncertainty about the benefits of auricular electroacupuncture, providers across the country are still using it -- and have allegedly defrauded the federal government out of millions of dollars. Some investigators say the false claims cases around P-Stim devices are an example of a scheme to profit off of expensive therapies and exploit federal healthcare programs.
'A Universe of Schemes'
The federal government has litigated at least 15 false claims cases involving auricular electroacupuncture devices within the last few years, across states including Pennsylvania, Texas, Tennessee, and Georgia. Eight of the cases have been resolved in the Eastern District of Pennsylvania, according to the DOJ.
Many of the cases that have been resolved are similar: providers applied P-Stim devices, which can be quickly adhered behind a patient's ear in an office setting, and then billed federal healthcare programs for more invasive -- and expensive -- procedures.
But the DOJ alleges that many of these providers were counseled by companies and promoters to bill for P-Stim devices this way. According to the Assistant U.S. Attorneys in this district, at least four of the cases resolved in Eastern Pennsylvania involve the same provider -- Timothy Warren, DC, a chiropractor based in Kansas.
Warren promoted himself as a medical billing consultant, according to the DOJ complaint, which was filed last month. He worked with providers -- mainly those who worked in integrated chiropractic practices -- to advise them on how to code for auricular electroacupuncture devices, including brands like P-Stim, ANSiStim, and Stivax. The DOJ stated that Warren was aware that CMS did not reimburse for P-Stim devices.
Warren allegedly advised providers to bill HCPCS code L8679 -- a code typically used for implantable neurostimulators -- for P-Stim. According to the complaint, Warren instructed providers to bill this incorrect code twice during each course of treatment, for a reimbursement totaling $16,000.
The chiropractor also advised physicians and other providers to bill CPT code 63650 for P-Stim procedures, which describes a percutaneously implanted neurostimulator. Warren allegedly told providers to bill this code up to five times per treatment, for a reimbursement of nearly $7,000 a patient.
Overall, providers who worked with Warren inappropriately billed federal healthcare programs (including Medicare and TRICARE) for more than $20 million, the complaint alleged.
Cases around the country look relatively similar. According to the DOJ, the Spinal Decompression Clinic in Texas falsely billed the federal government for 41 neurostimulator implantations, receiving total reimbursement of $177,000. In Tennessee, a neurologist and two chiropractors agreed to pay the federal government $1.7 million after allegedly billing inappropriately for P-Stim devices for 2 years.
"I believe there is a universe of schemes where companies market products as receiving substantial Medicare reimbursement, when in fact they are not properly billable at all," Gregory David, chief of the civil division at the U.S. Attorney's Office for the Eastern District of Pennsylvania, said in an interview with MedPage Today. "Those who peddle such schemes and the providers who bill these products are causing harm to federal fiscal health."
"As alleged in the Warren complaint, P-Stim is an example of one where millions and millions went out the door," David said.
Billing Code Rejected
The FDA has never approved any auricular electroacupuncture device, and Medicare does not reimburse for electroacupuncture. But several electroacupuncture devices have received premarket notification from the FDA.
In a statement to MedPage Today, an FDA spokesperson said that the agency "has cleared the P-Stim, the Stivax system, ANSiStim, and several other devices intended for use in the practice of acupuncture by qualified practitioners of acupuncture as determined by the states." These devices are for prescription use only.
Premarket notification, also known as 510(k) clearance, is a faster pathway to approval for devices that are "substantially equivalent" to a device that's already on the market. This is typically granted to certain low- and moderate-risk devices, but does not require the same level of scientific evidence as a fully approved device.
The auricular electroacupuncture devices in the DOJ cases have all entered the market within the last 8 years. P-Stim, which is manufactured by Austrian company Biegler GmbH, received premarket notification clearance from the FDA in June 2014.
Shortly after Biegler began distributing its devices, one of its distributors, DyAnsys, applied for a billing code that would specifically describe P-Stim. But when CMS rejected this application, DyAnsys manufactured its own auricular electroacupuncture device, which the company named ANSiStim. ANSiStim received 510(k) clearance in 2015, with the company stating it was "substantially equivalent" to P-Stim.
Then in 2016, Biegler received 510(k) clearance for Stivax, a second device that it promoted as a later-generation P-Stim device. Other devices that have been mentioned in false billing cases include E-Pulse, NeuroStim, and NSS-2 Bridge.
Research Remains Inconclusive
There are few U.S.-based studies on the effectiveness of P-Stim to treat chronic pain, and the current international literature is not conclusive.
Auricular electroacupuncture is most commonly used to treat acute and chronic pain, but has also been used as a complementary therapy for addiction and obesity. Insurance companies have justified not covering these devices, stating that there is not enough evidence to support their use and many are still investigational.
Research shows some benefits of P-Stim devices in reducing pain. A German study analyzed patients with rheumatoid arthritis who had better pain scores after auricular electroacupuncture than those in the control group, but not after 3 months. Additionally, in a randomized controlled trial of 61 patients conducted in 2004, Austrian researchers found that patients with chronic lower back pain who received auricular electroacupuncture experienced less pain than the control group at 18 weeks.
But another Austrian study conducted in 2011 came to the opposite conclusion. These researchers conducted a double-blinded study analyzing 40 women who underwent gynecologic laparoscopic surgery, finding that P-Stim devices did not improve postoperative pain, nor did it reduce the need for opioid use after surgery.
"Despite some encouraging data, the efficacy of acupuncture remains controversial," those researchers wrote. "Our study shows no reduction in pain and no opioid-sparing effects of auricular acupuncture in women undergoing laparoscopic procedures."
Studies to date are small, and do not provide overwhelming evidence for or against the use of P-Stim devices. While some providers who practice acupuncture will continue to use these devices to treat pain, federal investigators urge them to be critical -- specifically of how they are reimbursed.
"When a provider sees a scheme that seems too good to be true, it probably is," said Deborah Frey, Assistant U.S. Attorney for the Eastern District of Pennsylvania. "This is one of those schemes."