Patients going to see a chiropractor or a medical doctor for an electrical acupuncture treatment may have thought they were just getting a dose of relief from devices designed to deliver pulses around a person’s ear.
But the U.S. Attorney’s office in Philadelphia says some health care providers and marketers bilked millions from federal insurance programs by claiming the treatments were surgical procedures. The fraud allegations are the subject of a growing list of enforcement actions brought by federal prosecutors using data analytics to inform their investigations.
The approach is a departure from more traditional methods of detecting fraud and means prosecutors don’t have to rely as heavily on whistleblowers with inside knowledge coming forward.
“If you are somebody who’s participating in a federal program, you have to know now that your billing is highly visible to the watchdogs who are out there,” said Gregory David, chief of the civil division for the U.S. Attorney’s office for the Eastern District of Pennsylvania.
Medicare claims data, for example, is a trove of information for auditors and lawyers to parse.
“In many areas we have incredibly robust data sets ... that allow us to do our own proactive analysis,” David said.
The electrical acupuncture device cases center on billing codes submitted to Medicare and other federal insurers.
Federal prosecutors in four states — Texas, Tennessee, Georgia and Pennsylvania — have reached more than a dozen False Act Settlements involving so-called P-Stim devices — among them eight settlements, worth $3 million, by the U.S. Attorney’s office in Philadelphia. The settlements do not include admissions of wrongdoing.
In addition to five settlements with providers, the Pennsylvania enforcement actions include three settlements with individuals accused of selling or promoting the devices as treatments that could be billed to Medicare.
Separately, the U.S. Attorney’s office filed a lawsuit last month against a Kansas chiropractor, accused of giving fraudulent advice to providers on how to bill Medicare for the treatments. The chiropractor declined to comment on the allegation.
Acting U.S. Attorney Jennifer Arbittier Williams has warned providers that they need to do their own due diligence on billing codes, and that “if a marketer pushes a health-care scheme like P-Stim that sounds too good to be true, it likely is.”
Medicare doesn’t cover treatment with the battery-powered devices — which are typically applied to a patient in an office setting, using adhesive tape and the insertion of a small number of needles around the ear.
But Medicare does reimburse thousands of dollars for “implantable neurostimulators” — a device for pain relief that’s implanted through surgery. Prosecutors say health-care practitioners used the code for that procedure to collect fraudulent insurance payments.
“It’s millions and millions of dollars that went out the door,” David said.
The Centers for Medicare and Medicaid Services (CMS) works with contractors — known as uniform program integrity contractors — to run audits. Some of the contractors initially noticed “this weird billing” for the electro-acupuncture devices, David said.
Analyzing claims data enabled prosecutors to broaden the picture. “There was a massive spike for reimbursement of that code around 2017,” David said.
Investigators could also check for other clues about how the procedure was billed: Was it accompanied by charges for other services associated with surgery? Was it taking place at a hospital?
”We want to send the message there’s no under-the-radar level of fraud,” David said