Discover Optimal Healthcare: An Adhesive Device Billed as Surgery

The Discover Optimal and Yucha Medical ANSiStim settlement covered $805,978 in new payments and earlier Medicare repayments over allegations that the practices billed a nonsurgical electro-acupuncture treatment as surgically implanted neurostimulation. The government also alleged that Discover Optimal promoted the approach to the other practice and received a share of its profits.

The Justice Department announced the settlements on June 11, 2021. Discover Optimal Healthcare operated in Brookhaven, Pennsylvania. The other practice, Yucha Medical Pain Management & Chiropractic Rehabilitation, LLC, operated in Pottstown. The settlements also covered the practices’ owners.

Discover Optimal’s settling group had already repaid $306,342 to Medicare and agreed to pay an additional $356,150. Yucha Medical’s settling group had already repaid $94,089 to Medicare and agreed to pay an additional $49,397. The headline amount included money already returned.

How the ANSiStim Billing Allegation Worked

ANSiStim billing allegedly turned an adhesive-and-needle application into a claim for surgical implantation. According to the government’s account of the treatment, a contractor physician who was not a surgeon applied the devices without surgery, anesthesia or an operating room. The practices nevertheless billed for implantation of neurostimulators, a surgical procedure that usually requires an operating room.

The alleged billing ran from approximately September 2016 through February 2017. Both practices billed Medicare. Discover Optimal also billed the Federal Employees Health Benefit Program.

The contractor’s role helps explain how the claims reached those programs. Chiropractors are generally limited in the services they can bill to federal healthcare programs. Integrative chiropractic practices can, in certain circumstances, bill additional services through affiliated medical providers. Here, the government described a medical doctor working as a contractor. The alleged mismatch lay between the nonsurgical treatment that physician performed and the surgical procedure the practices billed.

ANSiStim was a brand of the P-Stim electro-acupuncture device. The announcement also identified NeuroStim, Stivax, E-Pulse and NSS-2 Bridge as P-Stim brand names. The product name could change while the physical distinction stayed the same: adhesive and a limited number of needles, with no surgical implantation. A device held on with adhesive allegedly became an operation on the bill.

How Does Reimbursement Work for Medical Devices?

Medicare pays for covered procedures, often including the implanted device’s cost in the procedure or hospital payment. In the ANSiStim case, the government alleged that the practices billed a covered surgical procedure after performing a nonsurgical treatment that federal programs did not cover.

A reimbursement pitch can make the procedure’s payment part of the device’s appeal to a practice. The Food and Drug Administration decides whether a device may be marketed. Medicare makes its own coverage and payment decisions. The allegation here concerned a pitch that treated application of the device as surgical implantation.

In this case, the Justice Department said federal health care programs did not reimburse ANSiStim, whether described as electro-acupuncture or as an implantable neurostimulator. The practices allegedly sought payment by billing the nonsurgical application as implantation. On that account, the claim described surgery that the patient never underwent. Taxpayers were being asked to pay for a different procedure from the one performed.

The Alleged Profit Share With Yucha Medical

Discover Optimal allegedly promoted the billing approach to Yucha Medical and received a portion of Yucha Medical’s profits. The practice promoting the approach allegedly earned money when another practice used it. In the announcement, the U.S. Attorney’s Office also singled out marketers who improperly pushed surgical billing codes for P-Stim applications.

Someone involved in the treatment may recognize the adhesive application. Someone handling claims may recognize the surgical billing. Someone involved in the commercial arrangement may know how the promotion and profit payments connected them. We work with insiders to bring those views together into a medical device fraud case.

What Evidence Is Needed to Prove Fraud?

Treatment records, claims, device records and the profit-sharing arrangement connect what happened to the patient with what the practice billed. Our whistleblower experts examine that connection with you, including who promoted the approach and how it reached the claims.

In this case, the government described a real device application and an alleged claim for a surgical procedure that did not happen. An insider who saw the treatment can explain the gap between those accounts. Someone who heard the reimbursement pitch can explain how the practice came to bill it that way.

The billed procedure alone cannot identify the particular device that was used. Product and treatment records supply that connection. Someone who knows the equipment applied to the patient may therefore explain a discrepancy that the payment data alone cannot.

The Same P-Stim Pattern Reached Distributors and Providers

P-Stim enforcement also reached businesses selling the reimbursement story to providers. In a separate case, Azon Medical settled allegations that it sold ANSiStim as reimbursable under surgically implanted neurostimulator codes, despite its application with adhesive and needles without surgery. That parallel shows why a device distributor’s reimbursement representations can matter alongside the provider’s bill.

The provider side appeared in the case against Spinal Decompression Clinic of Texas, which settled allegations that office P-Stim applications were billed as surgical implantation. Across these cases, the recurring allegation was a mismatch between the physical treatment and the procedure represented to Medicare.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know What the Billing Pitch Promised

If you saw device applications billed as surgery or a profit arrangement tied to that billing, speak to one of our Whistleblower Experts about how that billing worked. We build your strongest medical device whistleblower case around what the practice did, what it billed and who sold it the reimbursement story, and bring in medical device fraud whistleblower lawyers who understand provider billing. We stay beside you as your partners throughout the case.