Azon AnSiStim: A Nonsurgical Device Billed as an Implanted Stimulator

Azon Medical LLC agreed to pay $1,019,307 in its AnSiStim implanted stimulator settlement to resolve allegations that it caused improper Medicare billing for a nonsurgical electro-acupuncture device. The government said its customers applied adhesive and needles to a patient’s ear. The company allegedly sold that treatment as reimbursable under a code for a surgically implanted neurostimulator. The difference was visible to anyone who knew how the device was used.

The Justice Department announced the settlement on September 19, 2024. Azon was the distributor. According to the government, its customers applied the devices and received Medicare payments. The government’s case followed the reimbursement advice from the seller to the provider’s bill.

What AnSiStim Was

AnSiStim, the P-Stim brand Azon distributed, was a single-use, battery-powered electro-acupuncture device. The manufacturer’s instructions called for attaching it behind the patient’s ear with adhesive. Needles went into the ear and were secured with another adhesive. Once activated, the device delivered intermittent electrical pulses.

The patient wore it for several days, until the battery ran out. Then the device went in the trash.

The Justice Department also identified Stivax, NeuroStim, E-Pulse and NSS-2 Bridge as other brand names of this device. Its announcement described these acupuncture devices as nonreimbursable by Medicare. For someone who sold or billed a different brand, the Azon case raises a familiar comparison: how the device was applied and how its use was described to Medicare.

The implanted neurostimulator category described in the government’s announcement involved a different procedure. Those devices are surgically implanted into the central nervous system or targeted peripheral nerves, typically by a surgeon in an operating room. According to the government, Azon’s customers applied AnSiStim without surgery, anesthesia, a surgeon or an operating room.

That physical distinction carries the case. The code Azon allegedly recommended represented a surgical implant. The government described customers using ear needles and adhesive instead. Someone familiar with the product instructions could see the mismatch without having to know every rule in Medicare’s payment system.

How Reimbursement Advice Became a Medicare Claim

The government alleged that Azon marketed and sold AnSiStim as reimbursable under an implantable-neurostimulator code from approximately September 1 through October 26, 2016.

The alleged pitch joined the sale of a physical product to advice about getting Medicare to pay for its use. That is why the distributor’s communications mattered alongside the provider’s bill. The department said AnSiStim was a nonreimbursable acupuncture device, while Azon allegedly promoted reimbursement through a surgical category.

A healthcare fraud analysis in the Journal of Forensic and Investigative Accounting explains why that distinction matters. Its 2020 paper, A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud, reports that historically most healthcare False Claims Act cases involved requests for payment for more expensive categories of care than were provided, or services never provided. The paper also examines whether a false statement induced a wrongful payment.

That gives the Azon allegation a concrete focus: what the reimbursement advice caused a provider to bill. The treatment described in the instructions and the surgery represented by the code were different services. The alleged connection ran from the distributor’s representation, through the customer’s use of that code, to Medicare’s payment.

The U.S. Attorney said Medicare paid Azon’s customers hundreds of thousands of dollars for improperly billed acupuncture devices. In the government’s account, taxpayers paid for care described through a surgical billing category, while the treatment involved a disposable device applied at the ear.

What the Government Said Azon Knew

The government said Azon received notice through coverage advisories from Medicare contractors and communications from medical providers that it was promoting AnSiStim with false reimbursement advice.

For a distributor insider, the important connection is between the information reaching the company and the reimbursement advice going out to customers. Coverage communications can show what the seller had been told. Sales and billing advice can show what it told providers.

The Department of Health and Human Services’ Office of Inspector General investigated the matter. The resulting civil settlement addressed Azon’s alleged role in causing the improper billing, putting the distributor’s conduct at the center of a case about claims its customers submitted.

The Same Device in Separate Provider Cases

Separate provider settlements show how the same physical mismatch could appear at the billing end of the transaction. In its June 11, 2021 announcement about two Pennsylvania practices, the Justice Department described allegations that Discover Optimal Healthcare and Yucha Medical Pain Management & Chiropractic Rehabilitation billed nonsurgical AnSiStim applications as implanted neurostimulation.

The announced provider total was $805,978, including amounts already repaid. The government also alleged that Discover Optimal promoted the billing approach to Yucha in return for a share of the profits. That allegation adds a financial incentive beyond payment for the treatment itself: one practice stood to benefit from another practice’s use of the same billing approach.

The provider cases show how reimbursement advice could move between practices as well as from a distributor to a customer. Together, the accounts show why an inquiry into device billing can reach both the business supplying the product and the practice seeking payment for using it. A salesperson and a practice’s billing employee may see different parts of that connection.

What Evidence Is Needed to Prove Fraud?

We build a device billing case by connecting the device instructions, the distributor’s reimbursement advice, the treatment actually provided and the Medicare claim. The government’s notice allegation adds another question: what did the seller know when it gave that advice?

We compare the product’s application instructions with the procedure represented in the billing. We connect the seller’s reimbursement communications to the provider’s use of the code, then examine the coverage advisories and provider messages that reached the seller. That is how product knowledge, sales knowledge and billing knowledge can become an account of the same transaction.

If your work put you on one side of that exchange, our whistleblower experts work with you to turn that knowledge into a qui tam case. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Customer Was Told

If you saw a nonsurgical device sold with surgical billing advice, speak to one of our Whistleblower Experts about the instructions behind the claims. We build the case with you, bring in medical device fraud whistleblower lawyers who understand how a distributor’s advice becomes a Medicare claim, and stay beside you through the pursuit of a recovery.