How some doctors fraudulently made millions on electroacupuncture

By Jules Murtha
Published December 20, 2021

Key Takeaways

The failure of mainstream medicine to sufficiently care for patients of color in the 1970s paved the way for groups like the Black Panther Party to implement their own healthcare practices, which, few may know, included acupuncture. The same was true of Lincoln Detox, a South Bronx-based alliance of Black, Latinx, and White members who practiced acupuncture as a means of safely detoxing from methadone.

Regardless of how those efforts turned out, the efficacy of acupuncture and electroacupuncture is still largely debated in the medical community. Auricular electroacupuncture devices (AEDs) are particularly subject to criticism as they’ve yet to receive FDA approval.

But some physicians in the United States are accused of fraudulently billing federal healthcare programs for the use of AEDs for patients with chronic pain. Now, at least three of these doctors are facing major financial and legal repercussions.

A weak body of evidence

What is the consensus for auricular electroacupuncture in the United States? 

One study published in the Journal of the American Medical Association yielded hopeful findings. The study looked at Personalized Electroacupuncture compared with Auricular Acupuncture Comparative Effectiveness (PEACE), a randomized clinical trial featuring 360 cancer survivors between 2017 and 2019 in New Jersey and New York. The participants reported musculoskeletal pain for at least 3 months while in remission, and recorded their pain using the Brief Pain Inventory (BPI). Some patients were exposed to 10 weekly sessions of electroacupuncture or auricular acupuncture, while others received usual care to manage pain. 

Patients who underwent electroacupuncture reported reduced pain by an average of 1.9 points compared with those who received usual care. Participants who underwent auricular acupuncture reported reduced pain by an average of 1.6 points. Still, about 10.5% of patients discontinued electroacupuncture, and 0.7% discontinued auricular acupuncture, both due to adverse events during treatment.

Another study published in the Journal of the American Medical Association looked at the efficacy of electroacupuncture for chronic lower back pain. In California, 121 patients were randomly selected to receive legitimate electroacupuncture or a sham treatment between 2016 and 2018. After 2 weeks of treatments, pain scores registered no significant difference between patients who received electroacupuncture and those who received the placebo treatment. However, after adjusting for the Roland Morris Disability Questionnaire, researchers saw a greater level of pain reduction in patients with back pain-specific disabilities who received electroacupuncture compared with the placebo group.

Perhaps the lack of consistent evidence supporting the efficacy of AEDs is the reason they remain unapproved by the FDA—and why some doctors have ulterior motives to use them.

Exposing the scheme

The star of the controversy is the P-Stim device and similar instruments. P-Stims are battery-powered, electroacupuncture devices that clinicians attach to patients’ ears to ease pain. They do not qualify as implantable neurostimulators, which require surgery. But some providers are billing for the use of P-Stim, ANSiStim, Stivax, and similar instruments as though they are neurostimulator implants, according to an article published on MedPage Today. 

Some providers allegedly billed inappropriately at the advice of Timothy Warren, a chiropractor who also acts as a billing consultant to physicians. In a US Department of Justice (DOJ) complaint filed in October 2021, Warren is accused of violating the False Claims Act by wrongfully allegedly advising providers to bill for P-stim services with HCPCS code L8679—the code intended for neurostimulator implants—and to do so twice each time, resulting in up to $16,000 of reimbursement from federal healthcare programs per treatment.

He also allegedly told providers to bill CPT code 63650 for P-Stim procedures—even though that code is delegated to percutaneously implanted neurostimulators—up to five times per treatment, totaling approximately $7,000 per patient. Warren was aware of the fact that CMS does not reimburse for P-Stim devices when advising his clients, the department of justice alleges. 

After some physicians made millions in reimbursements as a result of this fraudulent activity, the feds are cracking down. The DOJ is requesting a jury trial.  The government also filed a complaint against Timothy Warren for

Facing legal repercussions

Also in October 2021, three settlements regarding fraudulent billings came through the Eastern District of Pennsylvania. According to the DOJ, Mark Kaiser and his company, Doc Solutions, LLC, paid $1.15 million, James Carpenter and his company, Solace Advancement Institute, paid $150,000, and Aaron Oxenrider and his company, Baron, Inc., paid $54,150. They all are barred from participating in federal healthcare programs for certain periods of time.

These settlements represent a small fraction of the magnitude of this legal battle. The DOJ prosecuted more than 12 cases involving fraudulent activity around P-Stim devices in the last 2 years. Meanwhile, the DOJ is working to apply analytics to healthcare claims data in order to continue identifying providers who may be engaging in fraudulent billing.

The bottom line

While some patients may benefit from AEDs, physicians and patients alike must follow FDA guidelines to avoid fraud schemes—it's clear the DOJ is cracking down.

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