Medicare Audits and Fraud Investigations for Amniotic Fluid Injection Billings and How to Respond
What are Amniotic Fluid Injections?
Amniotic fluid injections are amniotic cells that are injected into damaged tissues to help them recover and regrow. Their purpose is to reduce inflammation of the damaged tissue, cut down the individual’s recovery time, and regenerate tissue. These injections are prescribed for patients suffering from arthritis, tendon damage, spinal injury, ligament issues, or other injured tissues.
Medicare’s Non-Reimbursement of Amniotic Injections
Companies that sell amniotic fluid injections have traditionally billed these products as stem cell treatment therapies. However, evidence differs on the effectiveness of these injections. Further, CMS considers their benefits to be unproven and therefore extremely limits their eligibility for coverage.
Further, Medicare does not cover nor reimburse companies for amniotic injections. There are only a few limited circumstances where amniotic injections can be reimbursed by Medicare. Most billings are non-reimbursable. Therefore, healthcare providers that attempt to bill Medicare for these injections are at high risk for being investigated for improper billing and Medicare fraud. They are also at risk of several compliance issues if these providers work with suppliers to provide them with amniotic injections.
CMS and DOJ Investigative Processes
The Centers for Medicare and Medicaid Services (“CMS”) and Department of Justice (“DOJ”) have stirred a massive wave of Medicare audits and fraud investigations for the improper billing of amniotic fluid injections. To carry out its investigative duties, the DOJ has been issuing civil investigative demands (“CIDs”) to healthcare entities allegedly involved in improper billing practices regarding amniotic injections. CIDs are powerful discovery tools—similar to a subpoena—used by the DOJ and other federal agencies to gather evidence relevant to a federal agency investigation.
Recent DOJ Investigation
At the beginning of February 2021, a federal grand jury indicted an elected Missouri state representative for making false claims about an alleged stem cell treatment that she marketed through her clinics and for illegally providing prescription drugs to clients. Defendant had intentionally provided false information and made false statements about the medical treatment she was providing. The investigation started after she made false statements to a television station regarding the use of stem cells to treat COVID-19.
The federal indictment charges Defendant with wire fraud involving five individuals who lost almost $200,000. As Defendant obtained the amniotic fluid, she marketed her clinic as a “Leader in . . . Regenerative Medicine,” which included stem cells. Her marketing strategy extended to seminars, media interviews, and social media content. At a seminar, Defendant had told her audience that the amniotic fluid was a “stem cell shot,” which was false because the shot did not contain any cells including stem cells. These shots were administered to patients suffering from tissue damage, kidney disease, COPD, and other ailments under the impression that the shots contained stem cells. Defendant also wrote in a Facebook post that the shot “stands to provide a potential cure for COVID-19 patients that is safe and natural.” Defendant’s patients paid her $191,815 for amniotic fluid injections that did not contain any stem cells.
The indictment also charges Defendant with distributing Oxycodone and Adderall without valid prescriptions. She had failed to conduct in-person medical evaluations and instead wrote electronic prescriptions for these drugs for patients and sent them to pharmacies over the Internet. Defendant was further charged with making false statements to federal agents regarding the treatment of the amniotic fluid in her practice. Lastly, because Defendant is only licensed as an assistant physician, she violated Missouri law that required her to work collaboratively with a licensed physician.
How We Can Help You Respond to Federal Authorities and Mitigate Your Liability Exposure
An attorney experienced in federal healthcare defense can help you respond to a federal investigation or indictment, negotiate with the federal agency on your behalf, and work vigorously to reduce your liability exposure. Below we outline key ways we can help you through a federal investigation for fraud involving amniotic fluid injections:
- Compliance assistance by providing and implementing amniotic fluid injection-specific policies: Amniotic injections are tricky to deal with when submitting billing because there are so few exceptions. Therefore, providers that offer these injections to patients to treat or heal damaged tissue can use the assistance of an attorney to develop amniotic injection-specific policies that definitely establish when and under what unique conditions Medicare can be billed. These policies should also establish regular internal audit procedures for the provider’s operations and internal controls.
- Financial interest connection review that verifies whether providers have any financial relationship with their amniotic injection suppliers: If some kind of financial relationship is present—such as circumstances where a provider receives compensation for buying, recommending, referring the supplier’s product—then the parties need to determine whether such relationship is a violation of the Anti-Kickback Statute or the Eliminating Kickbacks in Recovery Act including illegal kickbacks. Counsel can help you determine this.
- Evaluate the possibility that the specific use of amniotic fluid injection is eligible for Medicare reimbursement if billed: Sometimes suppliers will not be honest about whether their products are eligible for Medicare reimbursement because they want providers to buy/recommend their products. Therefore, it is critical that providers protect themselves by retaining an attorney to make an independent evaluation and conclusion as to whether such products used by the provider are eligible to be reimbursed from Medicare.
- Verify that the healthcare provider has ongoing and substantial documentation policies regarding all transactions/procedures as a part of a comprehensive and robust compliance policy: Documentation is a critical component of a provider’s compliance policy and is an important defense shall allegations for Medicare billing fraud occur under the False Claims Act. As an attorney will discuss, the compliance policy should address what the provider will do when billing errors are identified, how the provider will respond to internal violations, and corrective action plans. Specific documentation that should be included are substantiation for medical necessity—which is especially important during an audit or fraud investigation regarding the provider’s use and billing of amniotic fluid injections.
- Review and analyze the provider’s history of billing Medicare for amniotic fluid injections to assess compliance and immediately correct mistakes: An attorney should be retained to review when and why the provider has billed Medicare in the past in order to determine whether such billings were compliant. If there are instances of noncompliance, the attorney can quickly work with you and all relevant parties to rectify the error to reduce your liability exposure.
- Tackle the CID that the provider received and evaluate next steps in the best interests of the supplier: It may sometimes be appropriate to limit the scope and extent of the CID if too burdensome and oppressive. An attorney can argue this on your behalf. In any event, your attorney will help you immediately start to compile responsive documents to satisfy the requests outlined in the CID. Not only does this demonstrate cooperation with a federal agency investigation but it also shows compliance.
- Establish and implement internal audit procedures: Internal audits are useful because they evaluate compliance at a specific point in time as well as identify whether there is anything pressing that the federal agents will find during an investigation. Your attorney will structure the internal audit so that it focuses on matters critical to the business or to the already-pending investigation—whether this includes false billing allegations, illegal kickback concerns, financial relationship issues with suppliers, noncompliance instances, etc.
- Provide vigorous and personalized defense strategies: Your attorney is there to help you fight a federal investigation involving amniotic fluid injections at every step of the investigative process—whether at the initial stages when responding to the CID or the final stages during litigation and appeal.
Dr. Nick Oberheiden, founder of Oberheiden P.C., focuses his litigation practice on white-collar criminal defense, government investigations, SEC & FCPA enforcement, and commercial litigation.