The Centers for Medicare and Medicaid Services (CMS) and U.S. Department of Justice (DOJ) are scrutinizing health care providers’ Medicare billings for amniotic injections. These injections are only eligible for Medicare reimbursement in limited circumstances, and providers that bill Medicare for non-reimbursable amniotic injections are at risk for facing allegations of Medicare fraud.

Among other means of enforcement, the DOJ has begun sending civil investigative demands (CIDs) to health care providers suspected of improperly billing Medicare for amniotic injections. These are administrative subpoenas that do not require judicial approval, but are subject to judicial enforcement. CMS is also instructing its fee-for-service auditors to pay attention to providers’ amniotic injection billings; and, due to the limited purposes for which these injections are eligible for Medicare reimbursement, many providers that have high volumes of these billings are at risk for facing substantial recoupment liability (in addition to other civil or criminal penalties).

“While amniotic injections have shown significant potential both as a form of treatment and as a tool for pain management, they remain largely ineligible for Medicare reimbursement at this time. As a result, providers that offer injections must be extremely careful to avoid running afoul of the Medicare billing guidelines and violating the False Claims Act.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Medicare Billing Fraud and Amniotic Injections

Amniotic injections have significant potential from both treatment and pain management perspectives. However, to date, their efficacy remains largely unproven (at least according to CMS); and, for this reason, Medicare eligibility remains limited. Pain, arthritis, and ligament and tendon issues are among the numerous issues for which amniotic injections currently are not eligible for Medicare reimbursement.

However, many providers still choose to use amniotic injections as a means of treatment and for pain management purposes. Minimally, there is anecdotal evidence to suggest that amniotic injections can be effective in a broad range of applications, and many doctors are comfortable recommending these injections to their patients.

But, as is often the case, at present there is a disconnect between the practicalities of modern medicine and the strictures of Medicare billing compliance. So, while providers can provide amniotic injections in appropriate circumstances if they choose to do so, whether they can bill Medicare is another matter entirely.

In order to minimize their risk of noncompliance, health care providers should currently be treating Medicare eligibility as the exception rather than the rule. As of now, the ineligible uses of amniotic injections far outnumber the eligible ones. Health care providers must also be extremely careful when entering into relationships with amniotic product suppliers, as these relationships are fraught with potential compliance issues as well.

Understanding the Legal Compliance Risks Associated with Amniotic Injections

The legal compliance risks associated with amniotic injections broadly fall into two categories: (i) those related to billing Medicare, and (ii) those related to financial relationships between providers and suppliers. Both sets of risks require equal consideration, and providers that offer amniotic injections to their patients must implement a comprehensive set of policies and procedures focused on addressing the specific risks this entails. Here is a closer look at each set of these sets of risks:

1. Violations of the False Claims Act and Health Care Fraud Statute

Improperly billing Medicare for non-reimbursable services is a violation of the False Claims Act. The False Claims Act prohibits providers from submitting “false or fraudulent” claims for Medicare reimbursement, and this includes submitting claims for ineligible services. A service can be ineligible if: (i) the specific service itself is excluded from Medicare eligibility, or (ii) the service as provided does not meet Medicare’s requirement for medical necessity.

With regard to amniotic injections, Medicare billing practices that can be prosecuted as violations of the False Claims Act include:

• Billing for Non-Reimbursable Amniotic Injections – Billing Medicare for non-reimbursable amniotic injections is prohibited. Providers can face prosecution for submitting non-reimbursable claims regardless of whether these claims result in payment. If a provider receives payment for a non-reimbursable claim, the provider must proactively address the issue (i.e. by refunding the payment to Medicare). However, providers should consult with legal counsel prior to notifying CMS that they have submitted fraudulent billings.
• Billing for Otherwise Reimbursable Amniotic Injections that Aren’t Medically Necessary – Even if a service qualifies for Medicare reimbursement generally, billing for the service still constitutes a violation of the False Claims Act if the service is not medically necessary within the context in which it is provided. Thus, when performing amniotic injections that qualify for Medicare reimbursement, providers must take the time to both determine and document the medical necessity of the procedure.
• Bill Amniotic Injections as Other Reimbursable Services – Health care providers cannot seek Medicare reimbursement for amniotic injections by billing them as other reimbursable services. This is another form of fraud that constitutes a violation of the False Claims Act, and mischaracterizing non-reimbursable services presents a high risk for allegations of intentional Medicare fraud.

The False Claims Act establishes both civil and criminal penalties for violations. The federal health care fraud statute, 18 U.S.C. Section 1347, also imposes criminal penalties for fraudulently billing Medicare. Under the False Claims Act and the federal health care fraud statute, evidence of knowledge or intent is required in order to substantiate criminal charges. However, providers can face civil penalties under the False Claims Act for inadvertent billing mistakes—including mistakes that result from unfamiliarity with the pertinent Medicare billing rules and regulations. Civil penalties under the False Claims Act can include recoupments, treble damages, fines, other forms of financial liability, and Medicare exclusion. In criminal health care fraud cases, providers can face financial liability and federal imprisonment.

2. Violations of the Anti-Kickback Statute and Eliminating Kickbacks in Recovery Act

CMS and the DOJ are also using audits and CIDs to target providers for violations of the Anti-Kickback Statute (AKS) and Eliminating Kickbacks in Recovery Act (EKRA) in relation to amniotic injections. These statutes prohibit health care providers from offering, paying, accepting, or receiving any prohibited form of “remuneration” for referrals of Medicare beneficiaries. They also prohibit payment of compensation for using or promoting particular services covered by Medicare.

In the context of amniotic injections, the primary issue on which CMS and the DOJ are focusing is whether physicians are accepting unlawful payments from amniotic product suppliers. Accepting payments in exchange for recommending certain products to Medicare beneficiaries can lead to liability under both the AKS and the EKRA.

The AKS includes provisions for both civil and criminal enforcement (depending upon evidence of intent), while the EKRA is a criminal statute. Notably, however, even if a prohibited transaction does not establish criminal culpability under the EKRA (and falls outside of the scope of the AKS), there is still a very good chance that the transaction will trigger civil liability under the False Claims Act.

Although there are exceptions under the AKS and EKRA that allow certain forms of remuneration in certain circumstances, (i) providers must generally structure their financial relationships with a particular exception in mind, and (ii) few, if any, of these exceptions are likely to be relevant when a provider receives compensation for recommending amniotic injections (and particularly non-reimbursable amniotic injections) to Medicare beneficiaries.

As a result, if a provider receives compensation from an amniotic product supplier, it should promptly review the terms of the relationship to determine whether the compensation violates the AKS, the EKRA, or both.

What Should Providers Do to Avoid Liability for Medicare Fraud Related to Amniotic Injections?

Given the risks associated with billing Medicare for amniotic injections and entering into financial relationships with amniotic product suppliers, what do providers need to do to protect themselves? Here are some examples of steps that providers can, and generally should, take in order to mitigate their risk of civil or criminal liability:

• Make Their Own Independent Determinations of Medicare Reimbursement Eligibility – Providers cannot rely on amniotic product suppliers’ representations regarding Medicare reimbursement eligibility. Instead, they must make their own independent determinations, ideally based on the advice of experienced federal health care compliance counsel.
• Implement Amniotic Injection-Specific Medicare Compliance Policies and Procedures – Due to the unique issues surrounding amniotic injections, providers that offer these injections should implement specific Medicare compliance policies and procedures. These policies and procedures should clearly establish the circumstances in which the practice will bill Medicare, and they should call for generation of adequate substantiating documentation prior to billing.
• Review Their Medicare Billing Histories for Amniotic Injections – Providers that have previously billed Medicare for amniotic injections should review their billing histories in order to assess their compliance. If a provider has improperly billed Medicare for amniotic injections, it will need to engage federal health care defense counsel to outline and execute its next steps.
• Review Their Financial Relationships with Amniotic Product Suppliers – Providers that offer amniotic injections also need to review their financial relationships with their product suppliers. If a provider receives any form of compensation for using or recommending a supplier’s products, the supplier should engage counsel to evaluate the relationship and determine if it violates the Anti-Kickback Statute and/or the Eliminating Kickbacks in Recovery Act.