Ovation: Stivax Claims Under an Uninvolved Physician’s Number

In the Ovation Stivax settlement, the practice and its chiropractor agreed to pay $98,498 to resolve allegations that they billed Medicare for surgery when a nurse practitioner had applied an acupuncture device in the practice’s office. For many of the claims, the government alleged, the physician identified on the bill had neither performed nor supervised the procedure.

The Justice Department announced the False Claims Act settlement with Ovation Center of Integrative Medicine on October 8, 2019. The alleged mismatch reached both the service and the person providing it: Medicare received a bill describing surgical implantation, carrying a physician’s number, for an office application without surgery or anesthesia.

An Office Application Billed as Surgery

The announcement identified Stivax as an electric acupuncture device and listed P-Stim, NeuroStim, ANSiStim, E-Pulse and NSS-2 Bridge as other brand names.

The government alleged that Ovation billed Medicare for implantation of neurostimulator electrodes from July 13, 2016 through August 21, 2017. That surgical procedure usually required an operating room and brought Medicare reimbursement of thousands of dollars. At Ovation, according to the announcement, a nurse practitioner was applying Stivax in the office instead.

As the government described the manufacturer’s instructions, Stivax attached 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. It was a single-use, battery-powered device designed to be worn for several days and thrown away when the battery ran out.

For the claims at issue, Medicare did not reimburse Stivax as an acupuncture device, as a neurostimulator or as implantation of neurostimulator electrodes. The alleged billing substituted a reimbursable surgical procedure for the office treatment the patient received.

An operating-room procedure on the bill. An adhesive device destined for the trash on the patient. That is the gap the government alleged.

The Physician’s Number on the Claim

Many of Ovation’s disputed claims used the provider number of a physician who did not perform or supervise the procedure, the government alleged.

The allegation turns on what the physician actually did. The government identified a nurse practitioner as the person applying the device and said the physician whose number appeared on many claims had neither performed nor supervised it. For someone who knew the practice’s staffing, the name attached to the bill could tell a different story from the treatment room.

The 2020 Journal of Forensic and Investigative Accounting paper A Forensic Accountant’s Guide to the Most Potent Federal Laws Used Against Healthcare Fraud describes a recurring pattern in healthcare False Claims Act cases: requests for payment for more expensive care than patients received, or services never provided. Ovation’s alleged surgery billing fits that pattern. The physician-number allegation gives an insider another concrete part of the claim to connect to the care.

How Is Medicare Fraud Detected?

Medicare can review claims after paying them, as it did with Ovation’s Stivax claims. On May 17, 2018, SafeGuard Services, Medicare’s Northeastern Unified Program Integrity Contractor, notified Ovation that it was initiating a post-payment medical review of certain Stivax services.

According to the Justice Department’s announcement, Ovation responded by conceding that the identified Stivax claims were inappropriate and agreeing to make voluntary repayment to Medicare for those claims.

Other Office Treatments Billed as Surgery

Ovation was the second electro-acupuncture device settlement announced in the Eastern District of Pennsylvania’s investigation. The earlier Physicians Alliance settlement, announced on September 17, 2019, likewise concerned allegations that P-Stim office treatment had been billed as surgically implanted electrodes.

Both settlements addressed alleged billing that turned an office treatment into a surgical claim. Ovation’s account adds the allegation about an uninvolved physician’s number.

In announcing the Ovation settlement, the government said its investigation extended to providers who improperly billed the devices and distributors or marketers who may have designed or carried out such billing schemes.

From the Treatment Chair to the Medicare Claim

A clinical employee may know the device used, the office setting and who performed the application. A billing employee may know which procedure and provider number went onto the claim. Someone involved in responding to a Medicare review may know how the practice explained the discrepancy. Each perspective connects to a different part of the alleged Ovation mechanism.

The forensic accounting paper explains why that inside knowledge matters to detection. It identifies the flow of inside information and the ability of knowledgeable whistleblowers to supplement government resources as reasons the False Claims Act works.

For a health care employee, that is the value of knowing the work behind the paperwork. A surgical description gives Medicare an account of a visit. A colleague who saw an ear device applied in the office can explain where that account departs from what happened. That firsthand perspective gives the billing discrepancy a clinical meaning, beyond the words on the claim.

Our work starts with those specific connections. We assess the account of the treatment alongside the procedure billed, the physician identity and the response to any claims review. The case becomes concrete when the same patient visit can be followed from the office to the payment request.

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

You Saw the Treatment and the Bill

If you know how an office device application became a surgical claim, or whose physician number went onto the bill, speak to one of our Whistleblower Experts about how the surgery claims were billed. We build your strongest medical device whistleblower case with you, bring in medical device whistleblower lawyers who understand Medicare billing, and remain your partners through the pursuit of a recovery.