Improper billing for electro-acupuncture using a “P-Stim” device (or peri-auricular stimulation device) has been the subject of two False Claims Act (FCA) settlements already in 2021, following a trend of such enforcement actions within the past year.

Each of the recent settlements, detailed further below, involve providers billing federal healthcare programs for acupuncture using P-Stim devices under HCPCS Code L8649. Unlike P-Stim devices, though, which are attached to the ears of a patient using needles and adhesives without surgery or anesthesia, HCPSCS Code L8649 applies to a product that is surgically implanted into a patient using anesthesia. Medicare, TRICARE and the Federal Employees Health Benefit Program (FEHBP) do not reimburse for acupuncture devices like P-Stim, nor do they reimburse for P-Stim as a neurostimulator or an implantation of neurostimulator electrodes. In addition to P-Stim, the brand names for these devices include ANSiStim, E-pulse, Stivax and NeuroStim.

Notably, none of these enforcement actions originated from qui tam whistleblowers but rather were the product of affirmative government investigations by the U.S. Department of Justice, U.S. Attorneys’ Offices, the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), and CMS’s Center for Program Integrity. These settlements—coming from different jurisdictions and concerning different types of providers and practices—demonstrate the government’s ongoing, nationwide effort to investigate the improper billing of electro-acupuncture devices:

  • On January 12, 2021, the U.S. Attorney’s Office for the Eastern District of Texas announced that a spinal decompression clinic had agreed to pay $330,898 to settle FCA allegations that it improperly billed Medicare for the implantation of 41 neuro-stimulators and was reimbursed over $177,000, when in fact the clinic had applied P-Stim devices in an office setting.
  • On January 4, 2021, the U.S. Attorney’s Office for the Middle District of Tennessee announced a settlement totaling $1.72 million with three healthcare providers and owners of medical practices to resolve FCA allegations that they billed Medicare and TennCare for acupuncture using P-Stim devices under the HCPCS Code L8649. One of the individual provider-owners, James P. Anderson, M.D., agreed to pay $1 million over five years to settle the allegations and enter into an Integrity Agreement with HHS-OIG that requires regular monitoring of billing practices for three years.
  • On September 21, 2020, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced a settlement totaling more than $1 million with a neurosurgery practice, neurosurgeon, and practice director to resolve, in part, allegations that the practice billed Medicare, TRICARE, and the FEHBP over 19months for the surgical implantation of neuro-stimulators, when instead a physician assistant had applied P-Stim and Stivax devices. According to the government’s press release, the neurosurgeon has since sued the marketers who allegedly pushed him to bill federal healthcare programs for the use of these devices.
  • On August 25, 2020, the U.S. Attorney’s Office for the Southern District of Texas announced that a pain management physician had agreed to pay $530,000 to settle FCA allegations that he improperly billed for the application of electro-acupuncture devices over five months. Qlarant, the Unified Program Integrity Contractor for Medicare, assisted HHS-OIG and CMS in their investigation of this matter.
  • On August 21, 2020, the U.S. Attorney’s Office for the Southern District of Georgia announced that a medical practice had been ordered to pay more than $4.3 million, and the practice’s owner and chiropractor ordered to pay $700,000, to resolve FCA allegations that the practice billed Medicare for surgical implantation of hundreds of neurostimulators and was reimbursed more than $1.4 million when it actually used P-Stim devices.
  • On June 30, 2020, the U.S. Attorney’s Office for the Southern District of Texas announced that an anesthesiologist had agreed to pay $100,000 to resolve FCA allegations that he falsely billed Medicare for the application of electro-acupuncture devices over five months. Qlarant also assisted HHS-OIG and CMS in their investigation of these allegations.