Not Following the Rules Costs Chiropractor $5 Million

September 1st, 2020 - Wyn Staheli, Director of Research
Categories:   Chiropractic   Audits/Auditing   Compliance   DME|Supplies|Equipment   HCPCS Coding  
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Every healthcare office needs to know and understand the rules that apply to billing services and supplies. According to the false claims lawsuit, code L8679 “Implantable neurostimulator, pulse generator, any type” was billed for a device which was really P-stim, a form of acupuncture. According to court documents, a P-Stim is an electric acupuncture device that is attached to the ears of the patient using two small pads whereas code L8679 describes a product surgically implanted into a patient.

This is not the first time that the OIG has gone after healthcare providers and organizations for inappropriately billing this particular device. In September 2019, another doctor was ordered to pay $178,000 for inappropriately billing for P-stim using the same code (L8679). In fact, the OIG press release stated that “[t]he investigation into others involved in this scheme remains ongoing.” There are several key points that providers need to understand.

A Scheme is a Scheme

Currently, Medicare will only reimburse a chiropractor for chiropractic manipulative treatment. This particular doctor, in order to get around that rule, worked with a consulting company to basically ‘rent’ a medical director and Family Nurse Practitioner from them in order to bill services/supplies which Medicare does not allow a chiropractor to bill. While integrated medical practices are a great way to promote chiropractic care, this is an example of the entirely wrong way to integrate. Integration should be more about ensuring that patients receive the appropriate care needed instead of a way to simply get around the rules.

According to court documents, “On March 27, 2017, Defendants, in consultation with Company-1, rolled out a bonus program to incentivize the improper billing of HCPCS L8679. Under the bonus program, Defendants paid NP’s, through Company-1, $100 per P-Stim “treatment.” When money is being transferred between businesses this way and bonuses are being offered for non-work, that is a kick-back scheme.

Reimbursement Rates As a Guide

Another red flag is that third-party payers, including Medicare, do not pay far above the value of a service or supply. According to court documents, “While the P-Stim devices typically cost between $300 and $500, Medicare typically reimburses between $5,000 and $6,500 for HCPCS L8679.” In fact, the current Medicare national unadjusted allowed amount for this service is $7,917.79. Does that really sound like a disposable throw away device that costs less than $500 to purchase from the manufacturer? 

Review Manufacturer Information

While HCPCS codes generally cover more than a single device, manufacturers generally know how they should be categorized or coded. It should be noted that in this case, the device manufacturer’s website stated “... [i]t is our understanding that Medicare and some commercial insurance companies are not covering electroacupuncture or auricular vagus nerve stimulation devices…” This should have been another red flag.

Summary

When you file a claim, you are certifying that you understand the rules and that you have followed them. It is your responsibility to know payer policies and follow the rules. Be sure you are conducting regular self-audits. See the ChiroCode DeskBook for a self-audit template.

Court documents identify the p-stim devices as “Stivax, NeuroStim, ANSiStim, E-Pulse, and NSS-2 Bridge.”  If you have billed code L8679 for any of these products, contact a healthcare attorney immediately about how to self-disclose and mitigate penalties for filing false claims.

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