U.S. Attorney Announces Two Additional Civil Settlements as Part of National Effort to Combat Electronic Stimulation Fraudulent Billing Scheme and Recover Millions, and Enforcement Action of One of the Settlements

PHILADELPHIA – U.S. Attorney Jacqueline C. Romero announced two civil settlements, nearing a total of $2 million, which are the latest actions in the national investigation into the improper billing involving the RST Sanexas neoGEN-Series device (“Sanexas”).

The settlements announced today involve chiropractic clinics that principally used Sanexas treatment for patients suffering from diabetic neuropathy. Sanexas is an electric stimulation device marketed by RST Sanexas, Inc. (“RST”) to treat various forms of pain and other medical conditions. It consists of a large central unit and electrical leads that are temporarily affixed to the area being treated.

Patients typically received treatment on an outpatient basis and received two treatments per week for twelve weeks, for a total of approximately 24 treatments. Treatment times generally lasted approximately 30 to 40 minutes. In conjunction with Sanexas treatment, the clinics injected patients with a vitamin blend.

The settlements are pursuant to DOJ’s inability to pay policy:

1. Joseph M. Childs, DC, Charles H. Durr, DC, and Active Integrated Medical Centers, PC (collectively, “Active Integrated”) agreed to pay $1,900,000 to resolve liability under the False Claims Act for the alleged improper billing of “Sanexas” and “TM Flow” devices, as well as epidermal nerve fiber density (“ENFD”) testing.

2. Taylor Vanden Wynboom, DC and Nova Integrated Health, PC (collectively, “Nova”) agreed to pay $52,000 to resolve liability under the False Claims Act for the alleged improper billing of the Sanexas device and ENFD testing.

Childs and Durr are chiropractors and co-owners of Active Integrated, with office locations in Downingtown and Hershey, Pennsylvania. From approximately February 5, 2020, through April 14, 2022, Active Integrated submitted over 67,000 claims for payment to Medicare involving application of the Sanexas device, often billed with accompanying vitamin injections under various procedure codes (97012, 97014, 97016, 97032, 97112, 97150, 99202, 99203, 99204, 99211,99212, 99213, and G0283) and injection codes (96372, J1955, J3411, J3415, J3420, and J3490).

Because Active Integrated refused to make its required settlement payments, yesterday the United States filed a complaint in the Eastern District of Pennsylvania to enforce the settlement agreement.

Wynboom is a chiropractor and owner of Nova, with an office location in Ankeny, Iowa. From approximately March 20, 2019, through November 5, 2020, Nova submitted approximately 33,000 claims for payment to Medicare involving application of the Sanexas device, often billed with accompanying vitamin injections under various procedure codes (97016, 97032, 97112, 97150, 99203, 99212, 99213, 99214, and G0283) and injection codes (96372, J1955, J3411, J3415, J3420, and J3490).

The United States Attorney’s Offices for the Eastern District of Pennsylvania and Southern District of Iowa worked closely to file a complaint and ultimately finalize a settlement in the matter of Wynboom, who had declared Chapter 7 bankruptcy.

The United States contends that Medicare did not permit reimbursement of Sanexas or vitamin injections used in conjunction with Sanexas in the way in which Active Integrated and Nova administered them. In particular, National Coverage Determination 160.7.1 states: “Electrical nerve stimulation treatments furnished by a physician in his/her office, by a physical therapist or outpatient clinic are excluded from coverage by § 1862(a)(1) of the Act.”

Similarly, Local Coverage Determination (“LCD”) 35222 reinforces that “[t]he use of electrostimulation alone for the treatment of multiple neuropathies or peripheral neuropathies caused by underlying systemic diseases is not medically reasonable and necessary.” Other LCDs contain the same or similar statements, such as L35456, L35457, L37642, L35222, and L36850.

The United States Food and Drug Administration cleared Sanexas as substantially equivalent to a transcutaneous electrical nerve stimulator (“TENS”) on or around January 24, 2003. Sanexas treatment was not FDA-cleared for use in combination with vitamin injections, the vitamin blend was not FDA-approved, and the vitamin blend was produced in bulk, rather than prescribed for individual patients.

The United States contends that vitamin injections used in conjunction with Sanexas treatment as Active Integrated and Nova administered them do not fall under the limited coverage available for prescription drugs under Medicare Part B. The LCDs noted above reinforce that vitamin injections that act as nerve blocks are not medically reasonable and necessary.

In addition, the United States contends that the various billing codes that Active Integrated and/or Nova used are improper for the way in which it administered Sanexas treatment and vitamin injections. For example, CPT Code 97012 requires application of mechanical traction and patient supervision, 97016 applies to lymphedema treatment and requires patient supervision, and 97032 and 97112 require one-on-one patient contact.

Active Integrated and Nova also submitted Medicare claims for testing used in conjunction with electric stimulation treatment – ENFD testing and/or TM Flow testing. ENFD testing involves performing a punch biopsy on patients to purportedly evaluate nerve damage that could be treated with the Sanexas device. ENFD testing was also conducted after Sanexas treatment purportedly to evaluate whether there has been an improvement to nerve health. The Sanexas device, however, is not FDA-cleared for healing or regrowing nerves. In addition, it was not medically reasonable or necessary to conduct additional testing related to electrical stimulation treatment, which was not covered by Medicare in the way in which Active Integrated and Nova administered it. Patients experienced pain while undergoing the punch biopsy used for ENFD testing.

In addition, Active Integrated offered “TM Flow” testing to screen new patients for various diseases, which, if identified, could purportedly support the need for electric stimulation treatment using the Sanexas device. The TM Flow device conducts various autonomic nervous system (“ANS”) and vascular function assessments. The applicable LCD includes ten limitations that render ANS testing not medically reasonable and necessary and not covered, including “patient screenings without signs or symptoms of autonomic dysfunction,” testing where “results are not used in clinical decision-making and patient management,” and testing without the competence in the Autonomic Disorders medical subspecialty. See L35395. LCDs L23236, L33609, and L35124 contain similar limitations.

Contrary to these limitations, however, Active Integrated used ANS testing to screen patients during an initial visit, offered treatment with the Sanexas device regardless of the results of TM flow testing, and lacked the necessary training to perform and interpret ANS testing.

During the time period in question, Active Integrated submitted to Medicare approximately 1,500 claims for TM Flow testing under codes 93922, 95921, 95923, and 95943, as well as nearly 70 claims for ENFD testing under codes 11104 and 11105. Active Integrated also submitted approximately 2,500 claims for Sanexas treatment and TM Flow testing to TRICARE, a federal health care insurance system for members of the military services and their families. Meanwhile, Nova submitted approximately 16 claims for ENFD testing and approximately 1,200 claims for Sanexas treatment to TRICARE.

“Before billing Medicare, providers must conduct their own due diligence, including reviewing applicable coverage determinations; they cannot blindly rely on the advice of device manufacturers, distributors, or billing companies,” said U.S. Attorney Romero. “We will continue working closely with our partners at CMS’s Center for Program Integrity, the Department of Health and Human Services Office of the Inspector General, and sister U.S. Attorney’s Offices around the country to hold accountable any other providers who inappropriately billed for these devices and caused false claims to be submitted.”

“Every dollar saved is critical to the sustainability of the Medicare program and the needs of the people who depend on it,” said Centers for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure. “We thank our partners at the Department of Justice and Department of Health and Human Services Office of Inspector General for working closely with us to identify, investigate, and eliminate waste, fraud and abuse in our federal health care programs.”

“Accurately billing for services provided to Medicare beneficiaries is required of all health care providers,” said Maureen R. Dixon, Special Agent in Charge for the U.S. Department of Health and Human Services, Office of the Inspector General. “HHS-OIG, CMS’s Center for Program Integrity, and the U.S. Attorney’s Office will continue to evaluate and pursue inaccurate billings of Sanexas and similar devices.”

The settled civil claims are allegations only. There has been no determination of civil liability. This matter was investigated by the U.S. Department of Health and Human Services Office of the Inspector General. The investigations and settlements were handled by Special Assistant U.S. Attorney Eric S. Wolfish, Civil Division Chief Gregory B. David, and Auditors Dawn Wiggins and Andrew Schobert. The Nova settlement was also handled by Civil Division Chief Rachel Scherle of the United States Attorney’s Office for the Southern District of Iowa.