P-hony Medicare Billing

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Corrupt doctor with money in his pocket

For more than a year, a Pennsylvania physician and medical group billed Medicare thousands of dollars for surgically implanting neurostimulator electrodes – a procedure that typically requires an operating room. Instead, they allegedly performed outpatient Medicare fraud by affixing “P-Stim” acupuncture devices behind the patients’ ears using adhesive. (Why yes, gluing on a device with no anesthesia sounds exactly like performing surgery.)

Keep in mind that Medicare does not reimburse for acupuncture or acupuncture devices like P-Stim. Nor is the P-Stim device considered reimbursable by Medicare as a neurostimulator or neurostimulator implantation.

Richard P. Frey, D.O. and Physicians Alliance Ltd., agreed to pay nearly $180,000 to resolve liability under the False Claims Act for the alleged improper billing, without admitting any wrongdoing. (Of course, it’s never the alleged fraudster’s fault.)

Lawyers representing the Pennsylvania practitioner released a statement that, “The device was used in full compliance with manufacturer and distributor instructions (which has nothing to do with the allegations) and in conjunction with the advice of professional medical billers and coders.” (That’s it… throw those (purported) billers and coders right under the bus!) The statement further explained that the settlement was reached “To permit Dr. Frey to remain focused on the highest quality medical care and to avoid the time and cost of litigation.” (But certainly not to avoid a stiffer penalty.)

Today’s Fraud of the Day comes from a media release from the U.S. Attorney’s Office, Eastern District of Pennsylvania, “Doctor and Physician Practice to Pay $178,000 to Resolve False Claims Act Liability Arising from Billing of “P-Stim” Devices,” published Sep. 17, 2019.

PHILADELPHIA, PA – First Assistant U.S. Attorney Jennifer Arbittier Williams announced that Richard P. Frey, D.O., and Physicians Alliance Ltd. (“PAL”) have agreed to pay $178,398.35 to resolve liability under the False Claims Act for the alleged improper billing of “P-Stim” devices.

From May 2013 through June 2014, Frey and PAL billed Medicare for the implantation of neurostimulator electrodes, a surgical procedure typically necessitating an operating room for which Medicare reimburses thousands of dollars. Frey did not conduct surgery, however. Instead, he applied a “P-Stim” device in an office setting without surgery or anesthesia.

P-Stim is an electric acupuncture device that, pursuant to manufacturer’s instructions, is affixed behind a patient’s ear using an adhesive. Needles are inserted into the patient’s ear and affixed using another adhesive. Once activated, the device then provides intermittent stimulation by electrical pulses. It is a single-use, battery-powered device designed to be worn for approximately four days until its battery runs out, at which time the device is thrown away. Other brand names for this device include Stivax, NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.

Additional information is from a Lancaster Online article, “Doctor & former physician group will pay $178,000 to resolve Medicare billing dispute,” published Sep. 20, 2019

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.