For much of the past decade, peripheral neurostimulator devices have been used liberally by some practitioners to treat chronic pain. In addition to pain relief, any manufacturers also promise providers that these devices are reimbursable by Medicare.
This combination of relief and reimbursement has proven irresistible. Why not use a device that gives patients relief from chronic pain? The fact that Medicare reimburses roughly $6500 for a device that only costs $250 – $700 makes it even more attractive.
The problem is that this simply is not true. Medicare rules do not allow for reimbursement of these devices and never have. Providers who submit these neurostim claims to the Centers for Medicare and Medicaid Services (CMS) are submitting false claims to the government.
The government has taken notice and is cracking down.
If you have billed Medicare for electro-acupuncture devices, such as P-Stim, ANSiStim, or Stivax, you will be audited by CMS or prosecuted by the OIG. If you have not yet been contacted by the government, there are proactive steps you can take to try to minimize your exposure. If you have been contacted by the government, you need experienced counsel. Contact Wade Emmert at firstname.lastname@example.org or (214) 855-3040 for experienced advice.
Types of Nerve Stimulation
Using mild electrical current to treat nerve pain is not new. There are several treatment modalities designed to focus electrical signals at pain-causing nerves to interfere with the way nerves relay information about pain to the brain.
One method is called TENS, which has been in use for decades and is well-proven. TENS stands for Transcutaneous Electrical Nerve Stimulation. Transcutaneous simply means that the electrical pulse is transferred across the depth of the skin.
Another modality is PENS, or Percutaneous Electrical Nerve Stimulation, which combines the concept of TENS with acupuncture. Percutaneous means that the electrical pulse is transferred through or into the skin by way of a needle. Instead of transferring the electrical pulse across the skin, PENS uses small needles to penetrate into the skin and deliver current closer to the nerves or the muscles beneath the skin, making the nerves less sensitive to pain. PENS is less proven and many insurance companies consider percutaneous neuromodulation therapy (PNT), to be investigational.
Auricular Peripheral Nerve Stimulation (APNS) takes the concept of PENS a step farther. With APNS, acupuncture needle electrodes are inserted into the patient’s ear to direct electric pulses to the nerve cluster in the ear.
Unlike PENS, where the needle electrodes are placed in proximity to the nerve serving the area of chronic pain, in APNS the placement of the needles is based on the flow of the person’s life-giving force called ‘qi’ (pronounced ‘chee’).
In concept, the ear has different zones and the placement of the needle electrodes in a particular combination of zones can treat conditions such as migraines, neck pain, occipital neuralgia, pelvic pain, insomnia, knee pain, tinnitus, TMJ pain, low back pain, mid back pain, post-surgical pain and edema, complex regional pain syndrome, shoulder pain, sphenopalatine ganglion neuralgia, chemical-induced peripheral neuropathy, chest wall / intercostal pain, foot pain, fibromyalgia, elbow pain, chronic fatigue, depression, and smoking cessation.
The device is designed to be worn by the patient for several days. It is affixed by an adhesive behind the ear, on the neck, or shoulder. Electrodes run from the device to the patient’s ear where they are placed into the skin and secured by an adhesive covering. The protocols vary, but each device remains affixed for 4-14 days and patients can receive multiple devices in sequence over time.
APNS devices are sold under brand names like P-Stim™, ANSiStim®, and Stivax.1 Many of these devices are considered investigational, though a few have received marketing clearance by the U.S. Food and Drug Administration’s (FDA) for use in treating acute or chronic pain by a qualified practitioner of acupuncture.
That does not mean, however, that they are reimbursable by Medicare.
Obfuscation and Deception
The FDA classifies PENS and APNS devices as electro-acupuncture devices. Medicare does not cover acupuncture for any condition other than chronic low back pain.2 But that did not stop manufacturers from implying, or outright misrepresenting to providers, that these devices were legally reimbursable.
Providers were encouraged to use certain codes to report APNS to Medicare:3
- CPT 64555
- CPT 63663
- CPT 95970-95972
- HCPCS L8679
Unfortunately, none of these codes properly describe APNS because none of these procedures or devices involve implantation and because Medicare does not reimburse for electro-acupuncture.
CPT Code 64555
CPT Code 64555 is the procedure code for percutaneous implantation of the neurostimulator electrode array. This is the code to claim reimbursement for the physician to perform the procedure. Practitioners would bill around $1,000 per procedure using this code.
The American Medical Association (AMA) defines Code 64555 as a “percutaneous implantation of neurostimulator electrode array, peripheral nerve (excludes sacral nerve).” A percutaneous procedure is any procedure or method where access to inner organs or other tissue is performed via needle-puncture of the skin, rather than by using an “open” approach where inner organs or tissue are exposed (typically with the use of a scalpel.4
This code is used for neurostimulator treatments with electrodes implanted below the skin, not placed into the skin. National Coverage Determination (NCD) for Assessing Patient’s Suitability for Electrical Nerve Stimulation Therapy (160.7.1) states:
This diagnostic procedure which involves stimulation of peripheral nerves by a needle electrode inserted through the skin is performed only in a physician’s office, clinic, or hospital outpatient department. Therefore, it is covered only when performed by a physician or incident to physician’s service. If pain is effectively controlled by percutaneous stimulation, implantation of electrodes is warranted.
A similar description was provided in Local Coverage Determination (LCD): Peripheral Nerve and Peripheral Nerve Field Stimulation (L34328):
PNS refers to the placement of a lead by a physician (via open surgical or percutaneous approach) near the known anatomic location of a peripheral nerve. … It is preferable that the physicians performing the PNS trials will also perform the permanent implant. If the physician implanting the trial PNS does not or cannot implant the permanent neurostimulator(s), the patient should be informed of this in writing and given the name of the referral surgeon who will implant the permanent neurostimulator(s).
Neurostim treatments are recoverable only when the electrodes are implanted percutaneously by a physician, typically performed in an outpatient setting at an ambulatory surgical center. Even then, such procedures are recoverable only when other, less invasive procedures have failed.
APNS devices are never percutaneously implanted and therefore do not meet the definition for CPT 64555.
CPT Code 63663 is the procedure code for the revision or replacement of percutaneous spinal neurostimulator electrodes. With spinal cord stimulation (SCS), mild electrical stimulation is delivered to nerves along the spinal column, modifying or blocking nerve activity to minimize the sensation of pain reaching the brain.
The pulse generator for SCS is a small device that is implanted near the spine in the same way a cardiac pacemaker might be implanted to treat abnormal heart rhythms.
As we discussed regarding CPT 64555, electro-acupuncture devices are not implanted and have little involvement with the spine. They do not meet the description for CPT 63663.
These procedure codes allow for the electronic analysis of implanted neurostimulator pulse generators/transmitters. As we discussed regarding CPT 64555, electro-acupuncture devices are not implanted. Since they are not implanted, providers cannot bill for analysis of the devices as if they were. These codes are not appropriate for electro-acupuncture devices.
HCPCS Code L8679 is the device code for an “implantable neurostimulator, pulse generator.”5 This is the code to claim reimbursement for the device itself. The device was priced at $10,000 for which Medicare reimbursed around $6,500.
Incidentally, these devices cost the provider only $250-$700 per device.
Similar to CPT 64555, to be reimbursable, the neurostimulator must be “implantable.” Again, neither the electro-acupuncture device nor the electrodes are implanted.
Some providers would also add Modifier 25 to Code L8679 procedures to increase reimbursement even more. Modifier 25 is defined as “a significant, separately identifiable Evaluation and Management (E/M) service by the same physician or other qualified health care professional on the same day of the procedure or other service.”6 It allows a provider to capture a separate, significant procedure performed on the same day as another procedure that would not otherwise be reimbursed.
Even if electro-acupuncture was properly coded as L8679, Modifier 25 would not be appropriate.
Providers in the Dark
Sales representatives for these electro-acupuncture devices knew they could sell more devices if the providers thought they could get reimbursed. When the providers started asking questions, some manufacturers doubled-down. They brought in consultants to coach providers on how to document the procedure in the medical records and code the treatment so that Medicare would pay the claim.
One sales representative, in response to “several inquiries recently from clients across the country regarding Stivax coding” offered a memo as “a way to proceed forward.” He stated:
After working closely with our compliance team over the past few weeks we are very happy to announce a new coding set that is to be used effective immediately.
The memo, entitled, “Coding for the Stivax Stimulator,” suggested tracts for Medicare billing using the codes previously debunked: L8679, 95970-95972, and 63663.
Other sales representatives suggested billing for the implantation of the electrodes rather than the device, by using CPT code 63650 and supply code E1399. Those codes require implantation too, which the APNS electrodes are not.
I have represented several providers who were duped into believing that these devices were legally reimbursable. While they were enticed by the opportunity to make money, none of them understood that these codes were improper. Some went as far as to hire a “compliance consultant” who was to make sure that everything they were doing was legal. Unbeknownst to them, this “compliance consultant” was also working with the manufacturer.
Based on these “stealth coding” practices advocated by some manufacturers, Medicare reimbursed many providers as if they had performed an implantation procedure of an implanted device.
CMS was slow to recognize the improper coding but responded early enough that manufacturers and sales representatives knew that these procedures and devices were not reimbursable by Medicare.
In August 2016, Novitas Solutions (a Medicare Administrative Contractor) issued Local Coverage Article: Auricular Peripheral Nerve Stimulation (Electro-Acupuncture Device) (A55240) specifically targeted at NeuroStim, P-Stim, ANSiStim, and E-Pulse. Novitas listed these brand names specifically and stated that these devices were not covered.
The CPT code 64555, does not describe the procedure of auricular acupuncture stimulation and it should be coded using the NOC CPT code 64999 – unlisted procedure, nervous system.
Novitas noted that the FDA classifies APNS as “electro-acupuncture devices” because they stimulate auricular acupuncture points. As such, they “are non-covered by Medicare in that Acupuncture is not a covered Medicare benefit[.]”
The article directs providers to bill these devices only with the CPT procedure code 64999, which describes an unlisted procedure for the nervous system. Using this CPT code properly conveys to Medicare that the service provided is not otherwise classified (NOC). In practice, this means that the procedure will not be reimbursed.
More recent CMS publications have warned against claims based on the other codes.
In January 2020, CMS published a Medicare Learning Network article entitled, Incorrect Billing of HCPCS L8679 – Implantable Neurostimulator, Pulse Generator, Any Type. Again, they call out P-Stim® devices specifically, but address all brands of electro-acupuncture devices:
The Centers for Medicare & Medicaid Services (CMS) is aware that some providers are submitting claims incorrectly to Medicare using HCPCS code L8679. This article reminds providers of Medicare policy regarding these devices. Make sure your billing staff are aware of the correct policy. …
Providers are inappropriately coding electro-acupuncture devices as implantable neurostimulators (HCPCS L8679 – implantable neurostimulator, pulse generator, any type), which are Medicare-covered devices that require surgical implantation into the central nervous system or targeted peripheral nerve, and are usually implanted via procedures performed in operating rooms (see CMS Publication 100-03, National Coverage Determination (NCD) Manual, Section 160.7). While both devices can be used to treat chronic pain, the electro-acupuncture devices are non-invasive (that is, do not require surgical implantation and/or an incision), and have an external battery source. Electro-acupuncture devices and implantable neurostimulators are two separate devices, and coding electro-acupuncture devices as implantable neurostimulators is incorrect.
And again in July 2020, Nordidian (a Medicare Administrative Contractor), published Implantable Neurostimulator, Pulse Generator, Any Type, HCPCS L8679 – Widespread Service Specific Targeted Review:
This article is to notify providers of the initiation of a widespread service specific targeted review for Healthcare Common Procedure Coding System (HCPCS) L8679, implantable neurostimulator, pulse generator, any type. The article further provides instruction on the use of the Noridian Medical Review website to facilitate proper submission of appropriate records and Medical Review contact information.
Recoveries by the Department of Justice and Office of Inspector General
CMS, the Department of Justice (DOJ), and the Office of Inspector General (OIG) have initiated False Claims Act prosecutions to recoup payments for electro-acupuncture treatments. The number and frequency of these actions are increasing.
In most cases, recoupment starts with a CMS audit of medical and billing records for claims involving CPT 64555 and HCPCS L8679. At the conclusion of the audit, CMS will either request recoupment of funds or turn the matter over to the OIG who, with the assistance of the DOJ, will prosecute a civil action (though sometimes criminal action) against the provider.
An Assistant United States Attorney assigned to the matter will issue one or more Civil Investigative Demands (CID) to the provider. A CID is a discovery device used to obtain written answers and documents relevant to their investigation or prosecution. These CIDs are often hand-delivered by OIG or FBI agents directly to the provider in the provider’s office.
The provider will need to hire competent legal counsel if they have not already done so. The provider’s attorney will either work to resolve the matter as cost-effectively as possible or prepare the case for trial.
In False Claims Act cases, the government can seek three times the amount of the Medicare reimbursement plus penalties per claim. For example, if the provider was reimbursed $500,000 for 80 devices, damages at trial could be:
|Damages||$500,000 x 3||$1,500,000|
|Penalties||80 claims x $23,000 per claim7||$1,840,000|
Depending on the facts of the case, the government will usually start settlement discussions at double damages with little or no penalties. With the specter of trial and significant damages, many providers are motivated to resolve the matter prior to trial.
The reported number of settlements over the past two years is steadily increasing and Texas has become fertile ground for recoveries. These types of cases have proven irresistible to politically motivated U.S. Attorneys as the cases involve significant recoveries and public opinion is on the government’s side.
- February 2021, U.S. Attorney’s Office for the Southern District of Texas. Chiropractor in an integrated practice agreed to pay $273,000 to settle allegations that he improperly billed. Medicare for implantation of ANSiStim and Stivax devices.
- January 2021, U.S. Attorney’s Office for the Northern District of Texas. Chiropractor in an integrated practice agreed to pay $90,000 to settle allegations that he improperly billed Medicare for implantation of ANSiStim and Stivax devices.
- January 2021, U.S. Attorney’s Office for the Eastern District of Texas. Clinic agreed to pay $330,898 to settle allegations that it improperly billed Medicare for the implantation of 41 neurostimulator devices in an office setting.
- January 2021, U.S. Attorney’s Office for the Middle District of Tennessee. Three healthcare providers agreed to pay $1.72 million to settle allegations that they improperly billed Medicare using the HCPCS Code L8649.
- September 2020, U.S. Attorney’s Office for the Eastern District of Pennsylvania. A neurosurgery practice, its surgeon and director agreed to pay more than $1 million to resolve allegations that the practice, among other things, billed Medicare for the implantation of the P-Stim and Stivax devices. The neurosurgeon has since sued the marketers who allegedly pushed him to bill federal healthcare programs for the use of these devices.
- August 2020, U.S. Attorney’s Office for the Southern District of Texas. A pain management physician had agreed to pay $530,000 to settle allegations that he improperly billed for the application of electro-acupuncture devices.
- August 2020, U.S. Attorney’s Office for the Southern District of Georgia. A medical practice had been ordered to pay more than $4.3 million, and the practice’s owner and chiropractor ordered to pay $700,000, to resolve claims that they billed Medicare for implantation of hundreds of P-Stim devices.
- June 30, 2020, U.S. Attorney’s Office for the Southern District of Texas. An anesthesiologist had agreed to pay $100,000 to resolve claims that he improperly billed Medicare for the application of electro-acupuncture devices.
Medicare rules do not allow for reimbursement of electro-acupuncture devices and never have. Providers who file these claims with CMS under the guise of implanted neurostimulators are submitting false claims to the government. The government has taken notice and is actively targeting providers to recoup payments. The number of False Claims Act settlements has increased and there is no reason to believe they will slow down.
If you have billed Medicare for electro-acupuncture devices, such as P-Stim, ANSiStim, or Stivax, you will be audited by CMS or prosecuted by the OIG. If you have not yet been contacted by the government, there are proactive steps you can take to try to minimize your exposure. If you have been contacted by the government, you need experienced counsel.
Contact Wade Emmert at email@example.com or (214) 855-3040 for experienced advice.
- Similar devices are marketed under various brand names: AcuStim (S.H.P. International); P-Stim™ System (NeuroScience Therapy); E-pulse® (AMM Marketing); Electro Auricular Device – EAD (Key Electronics); P-Stim (Biegler Gmbh); ANSiStim® (DyAnsys); Stivax System (Biegler Gmbh).
- Medicare.gov – Acupuncture.
- Current Procedural Terminology (CPT) is a coding system published by the American Medical Association (AMA). CPT codes are used to describe tests, surgeries, evaluations, and any other medical procedure performed by a healthcare provider on a patient. HCPCS (pronounced “hicks-picks”) is the Healthcare Common Procedure Coding System developed by the Centers for Medicare and Medicaid Services (CMS) to report medical procedures and services to CMS. All Medicare claims are reported using HCPCS, but HCPCS has adopted many of the CPT codes.
- Wikipedia – Percutaneous.
- HCPCS Code L8679 is a Level II code that represents non-physician services, including durable medical equipment, that do not fit into any Level I codes. Level II codes are grouped alphanumerically. The “L-codes” represent “Orthotic/prosthetic services.”
- Novitas – Modifier 25 Tips.
- The maximum penalty per claim as of 06/19/2020 was $23,331.