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Is Your Practice or Company Under Investigation for Providing Amniotic Injections?

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Federal authorities are currently targeting healthcare providers and other companies in relation to amniotic injections. While amniotic injections have received approval from the Centers for Medicare and Medicaid Services (CMS) for some purposes, at present they are not approved specifically for pain management.

This distinction appears to be causing issues for many providers as well as for companies that assist with promoting these injections. We are currently aware of multiple federal investigations targeting amniotic injections, and it appears that this could be one of the next new waves in healthcare fraud enforcement at the federal level.

Civil Investigative Demands (CIDs) for Amniotic Injection Fraud

The investigations we have seen in this area have been initiated through civil investigative demands (CIDs). A civil investigative demand is a type of administrative subpoena that agencies including the U.S. Department of Justice (DOJ) can issue without judicial approval.

Crucially, however, while CIDs do not require judicial approval, they are subject to judicial enforcement. This means that healthcare providers, companies, and individuals can face steep penalties if they fail to comply. These penalties, of course, are in addition to any penalties that those targeted in the government’s investigation may face as a result of the underlying allegations of amniotic injection fraud.

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Dr. Nick Oberheiden
Dr. Nick Oberheiden

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John W. Sellers
John W. Sellers

Former Senior Trial Attorney
U.S. Department of Justice

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Joanne Fine DeLena
Joanne Fine DeLena

Former Assistant U.S. Attorney

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Joe Brown
Joe Brown

Former U.S. Attorney & Former District Attorney

Local Trial & Defense Counsel

Amanda Marshall
Amanda Marshall

Former U.S. Attorney

Local Counsel

Aaron L. Wiley
Aaron L. Wiley

Former Federal Prosecutor

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Roger Bach
Roger Bach

Former Special Agent (OIG)

Michael Koslow
Michael Koslow

Former Supervisory Special Agent (FBI)

Chris Quick
Chris Quick

Former Special Agent (FBI & IRS-CI)

Kevin M. Sheridan
Kevin M. Sheridan

Former Special Agent (FBI)

Ray Yuen
Ray Yuen

Former Supervisory Special Agent (FBI)

Dennis A. Wichern
Dennis A. Wichern

Former Special Agent-in-Charge (DEA)

Understanding the Fraud Allegations Related to Amniotic Injections

Federal authorities seem to be targeting a number of different fraud allegations related to the promotion and administration of amniotic injections. These allegations appear to largely, though not exclusively, pertain to the promotion and administration of amniotic injections for pain management. As noted above, administration of amniotic injections for pain management is not approved for Medicare billing at this time.

Specifically, federal authorities appear to be targeting the following types of allegations:

1. Unlawful Kickbacks

The Anti-Kickback Statute, Eliminating Kickbacks in Recovery act (EKRA), and Stark Law all prohibit healthcare providers and other entities from paying compensation for patient referrals out of Medicare-reimbursed funds. However, these statutes’ prohibitions also extend much farther, and they apply to all entities and individuals involved in both proposed and consummated unauthorized transactions. Thus, healthcare providers, marketing agencies, telemedicine companies, and others can all potentially face prosecution for offering, soliciting, paying, and accepting unlawful remuneration in relation to the promotion of amniotic injections.

Crucially, the prohibitions in all three of these statutes are subject to a number of safe harbors and exceptions. As a result, entities and individuals targeted for alleged unlawful kickbacks will often have strong defenses available. For example, personal service arrangements and referral services will often fall outside of the statutes’ prohibitions—as long as the parties’ financial relationship is structured appropriately.

2. False Claims Act Violations Due to Lack of Medical Necessity

Federal investigations targeting healthcare providers that administer amniotic injections also appear to be focusing on the issue of medical necessity. Even if a particular service is authorized for Medicare billing generally, a provider cannot bill for that service unless it meets Medicare’s definition of medical necessity. Pain management services frequently raise issues regarding medical necessity, and novel treatment methods routinely face necessity-related scrutiny as well. Billing Medicare for services that do not qualify as medically necessary is a violation of the False Claims Act—and providers that violate the False Claims Act can potentially face civil or criminal penalties.

In order to qualify as “medically necessary” for Medicare billing purposes, a service must be, “needed to diagnose or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.” CMS advises that healthcare providers should maintain documentation of medical necessity for all billed services, “include[ing] clinical evaluations, physician evaluations, consultations, progress notes, physician’s office records, hospital records, nursing home records, home health agency records, records from other healthcare professionals and test reports.” When facing a federal investigation, lacking documentation of medical necessity can be just as high-risk as lacking medical necessity itself.

As a novel form of treatment that may be used for pain management, amniotic injections are a prime target for medical necessity examinations. Even if a doctor provides amniotic injections for wound care, the administration of the injection could still trigger scrutiny. If this happens, it will be absolutely essential for the doctor to have documentation of medical necessity—without it, there is a very good chance that federal authorities will classify the treatment as non-medically-necessary and all associated billings will be deemed in violation of the False Claims Act.

3. Medicare Billing Fraud

Due to the fact that many amniotic injections are not eligible for Medicare reimbursement, federal authorities are likely to closely scrutinize the Medicare billing records of any healthcare providers that provide these injections. When examining providers’ billing records, agents and investigators will be looking for any evidence to suggest that providers may have submitted fraudulent billings in violation of the False Claims Act. This includes potential forms of Medicare billing fraud such as:

  • Falsely claiming that amniotic injections were provided for wound care when in fact they were provided for pain management; and,
  • Billing amniotic injections as other covered services.

In order to defend against allegations of Medicare billing fraud under the False Claims act, healthcare providers must have comprehensive documentation of compliance. This includes not only substantiating documentation for the billings in question, but also compliance policies and procedures that specifically address the risks of intentional and unintentional billing mistakes. Similar to medical necessity documentation, if healthcare providers cannot provide Medicare billing compliance documentation, this alone can be enough to lead to unfavorable consequences in the event of an amniotic injection fraud investigation.

What Should You Do if You Have Received a CID Related to Amniotic Injections?

Given these concerns, what should you do if you have received a CID related to amniotic injections? When facing any type of federal investigation involving allegations of kickbacks or billing fraud, healthcare providers and other entities should engage experienced healthcare fraud defense counsel right away. There are several critical steps involved in responding to a CID, and targets of federal investigations must be extremely careful to avoid mistakes that can lead to unnecessary exposure.

Generally speaking, the steps involved in responding to a CID include:

  • Institute a Legal Hold – Upon receiving a CID, the recipient should institute what is known as a “legal hold”. This is a formal, structured, and documented effort to preserve any and all records that may potentially be relevant to the government’s investigation. Failing to preserve relevant records can not only make a CID recipient look guilty (regardless of the true facts at hand), but it can also potentially have adverse consequences of its own.
  • Conduct an Internal Audit – When facing a federal investigation, it is imperative to know what (if anything) agents and investigators are going to find. This means conducting an internal audit focused specifically on the allegations underlying the investigation (i.e. allegations of Anti-Kickback Statute and/or False Claims Act violations related to amniotic injections). All entities should examine their third-party relationships for potential anti-kickback concerns, and those that bill Medicare will need to thoroughly examine their compliance practices and billing documentation as well.
  • Evaluate Response Strategies – While it is highly unlikely that a CID recipient will be able to have the CID quashed in its entirety, it is possible to limit the scope of a CID in many cases. It is important to assess these options early on, and to build a response strategy based on the options that are available.
  • Compile Responsive Documents – In anticipation of needing to fully comply with the CID, a CID recipient should begin working immediately to compile responsive documents. This also needs to follow a structured and documented approach, as the recipient will need to be able to affirmatively demonstrate compliance with the government’s demands.
  • Defend Against the Investigation – While responding to a CID is an intensive and time-consuming process, it is important not to lose sight of the fact that the CID is just one part of a broader (and ongoing) federal law enforcement investigation. In addition to dealing with the CID, a CID recipient must also undertake a parallel track of building a comprehensive defense to the substantive allegations at hand.

When taking each of the steps listed above, healthcare providers and others targeted in federal investigations must work in lockstep with their legal counsel, and they must ensure that all communications and work product are protected by the attorney-client privilege. When necessary, targets should assert their constitutional privilege against self-incrimination as well. Facing a federal investigation of any type is a high-risk scenario; and, when the investigation involves an issue of particular interest to federal authorities (i.e. amniotic injection fraud), it can be particularly important to focus on resolving the investigation before charges get filed.

Is your healthcare practice or business facing investigation under the Anti-Kickback Statute or False Claims Act for amniotic injection fraud? Or, do you have concerns about your practice’s or business’s promotion or administration of amniotic injections? If so, you should consult with experienced federal healthcare fraud defense counsel promptly. Our former federal healthcare fraud prosecutors and investigative agents are available 24/7, and we can get to work defending your practice or business immediately if necessary.

Speak with a Senior Healthcare Fraud Defense Lawyer at Oberheiden P.C.

If you need to know more about the federal government’s efforts to target amniotic injection fraud, we encourage you to contact us promptly for a complimentary consultation. To speak with a senior healthcare fraud defense lawyer at Oberheiden P.C. in confidence, call 888-680-1745 or contact us online now.

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