Stimwave: A Piece of Plastic With a Medicare Billing Code

In the Stimwave White Stylet False Claims Act settlement announced in March 2023, Stimwave agreed to pay $8.6 million and admitted responsibility for presenting an inert plastic component as a functioning receiver to support additional Medicare billing. Doctors implanted it believing it did something. The people who knew its design, taught the procedure or explained the reimbursement could see the gap between the product and the claim.

Stimwave made implantable neurostimulation devices for chronic pain. Its StimQ PNS system targeted peripheral nerves outside the spinal cord. The Justice Department’s account of the criminal trial described a White Stylet scheme running from about 2017 through 2020. Its supposed function gave doctors a reason to claim payment for implanting a receiver. The company had turned a piece of plastic into a reason for another bill.

The White Stylet Had a Billing Purpose

The White Stylet could be cut to fit inside a patient because it was plastic. It had none of the receiver function Stimwave claimed for it.

The Justice Department’s account of the criminal trial describes the product’s working components. A lead containing electrodes delivered stimulation, while the Pink Stylet acted as an antenna, transmitting energy from an external power source to the lead. The earlier indictment announcement described the Pink Stylet as approximately 23 centimeters long. Doctors reported that it was too long for some patients. Cutting it shorter would interfere with its function.

The government’s evidence at the criminal trial showed the former chief executive’s response: have the company make a plastic alternative and tell doctors it was a receiver. The White Stylet could be trimmed to fit smaller anatomical spaces. The executive oversaw training that presented it as functional and directed employees to vouch for it, even though it contained no copper and could not function as a receiver.

The original whistleblower complaint supplied a different view of the same part. It described a receiver microchip inside the lead and a copper stylet that could act as an extension when that receiver sat too deep. For peripheral nerve stimulation, the whistleblower alleged, the receiver was already close enough to the skin to receive the signal without that extension. The plastic stylet’s purpose was to satisfy the billing criteria.

A component can have an important place in the sales explanation while doing nothing in the patient’s body.

How CPT 64590 Entered the Procedure

The extra reimbursement code made the device’s price workable for doctors. The Justice Department’s account of the criminal trial put the purchase price at approximately $16,000. Implanting the lead brought approximately $4,000 to $6,000 in reimbursement, while implanting a receiver brought approximately $16,000 to $18,000. Without the receiver payment, the doctor faced a loss on the device purchase.

The whistleblower’s complaint put names to those codes. It alleged that Stimwave trained physicians to bill CPT 64590 for the generator in addition to CPT 64555 for the lead, and used reimbursement calculators to show physicians how to increase revenue with its products.

The alleged instruction reached into the procedure itself. The complaint said Stimwave designed and taught a second incision for placement of the receiver stylet to justify the generator code. The white plastic part supplied the explanation for that additional procedure.

Then the complaint described what happened at a training lab:

The part supposedly justifying the additional reimbursement could be thrown away during instruction on how to perform the procedure. The complaint also alleged that a company representative told the whistleblower the second incision existed to satisfy the billing code.

Can a Whistleblower Take Legal Action Against a Medical Device Company?

A whistleblower can bring a False Claims Act case against a device manufacturer for knowingly causing false claims submitted by its customers. Stimwave’s case followed that chain: the manufacturer represented the plastic component as a receiver, doctors implanted it, and providers sought Medicare reimbursement for that implantation.

A whistleblower brought the original qui tam case. The complaint described firsthand knowledge of Stimwave’s training and alleged that sales representatives and physicians had raised concerns inside the company. The government later brought its own civil complaint, and Stimwave admitted and accepted responsibility for the conduct alleged in that complaint as part of its civil settlement.

The nearest parallel is Jet Medical’s Allevio case. The government alleged that the company promoted a headache procedure that lacked coverage and coached providers to use improper billing codes. The shared mechanism is the manufacturer’s role in telling a customer how to obtain reimbursement. At Stimwave, that instruction depended on the claimed function of the part inside the patient.

The reimbursement calculator, the training demonstration and the explanation given to a practice’s billing staff belong in the same account of how the device was sold.

What Evidence Is Needed to Prove Fraud?

For a case built around a falsely described implant, the evidence connects what the part could do, what the manufacturer told the doctor, what went into the patient and what Medicare was billed. The Stimwave complaint makes those connections concrete through product descriptions, reimbursement calculators, training demonstrations and conversations about the extra incision.

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 false reimbursement request built on an inaccurate listing of the goods or services provided. Applied to the White Stylet, that puts the physical part and the billed procedure side by side. The payment request described a receiver. The product contained plastic.

A product employee may understand why the component could not receive a signal. A clinical specialist may have heard the explanation for the second incision. A reimbursement employee may know how the code entered the sales presentation.

We work with insiders to connect those views of the same transaction, including who knew the component’s limits when it was being sold as a receiver. That is where knowledge of the device business becomes useful in a healthcare fraud case: it explains how the claim came to describe something the product did not do.

How Much Does Medicare Fraud Whistleblower Pay?

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

You Know What the Part Was Built to Do

If you saw a component’s function rewritten in training or reimbursement instructions, speak to one of our whistleblower experts about how the product was sold. We build the case with you and bring in medical device fraud whistleblower lawyers who understand the connection between product claims and Medicare billing. We stay beside you as your knowledge of the device becomes the evidence behind the case.